Financial Lifecycles – Priorities for Every Stage

As we get older and life circumstances change so do our financial needs. Here are some helpful tips to get you thinking about your financial priorities, no matter what financial life stage you are in.

New graduates and young adults entering the workforce
This is an exciting time, but the reality is that income levels are at the low end of the job scale. Since new graduates and young employees are just getting started expenses can be very high. What to focus on:

• Paying back student loans
• Establishing credit through a car loan or low balance credit cards
• Starting your Registered Retirement Savings Plan (RRSP). It seems way too soon to be talking about retirement, but the sooner you start the better off you will be. Not only will you be set up in a savings plan your RRSP funds could be used in the future towards a down payment on a home, or for furthering your education later on

Newly weds
Starting a life together also means that your income can be combined to pay everyday expenses. That can mean more room to save. What to focus on:

• Saving for your first home
• Contributing to your RRSP
• Using your RRSP funds towards purchasing a home
• Setting up your savings plan for purchases and your emergency fund so you can avoid using credit cards

Young families
Your income has improved, but with the addition of a family your expenses have increased as well. It is more difficult to save, but that still needs to remain a priority. What to focus on:

• Paying down debt accumulated when you first started out
• Paying off your mortgage
• Contributing to your RRSP
• Starting a Registered Education Savings Plan (RESP) for your children’s education

Empty nesters
With daily child related expenses becoming a thing of the past and your income at its’ highest level, cash flow begins to improve. Your mortgage is nearly or completely paid off. What to focus on:

• If you do not have a RESP you may now be faced with post secondary school expenses or may need to top up your RESP
• Continuing to save for your retirement during the remaining time before you retire
• Diversifying your portfolio – to minimize risk and maximize return
• Understanding your pension options
• Planning for retirement – not only your income, but how your income will be used

Retirement
With your work years behind you, you are finally in the position to put those retirement plans in action. What to focus on:

• Retaining and maximizing your savings
• Estate planning