Do you know the purpose of your financial plan in your current life stage?

At different stages in your life the list of things that provide a sense of (financial) security & satisfaction keeps changing and the purpose of your financial plan keeps evolving.

The different purposes a financial plan can serve are–

1. Growth of money

2. Tax saving 

3. Protection (of savings & assets)

4. Regular income

5. Creating a legacy

6. Lumpsum funding

   
   

Purpose of your financial plan, based on your life stage-

Below are most common factors you need to consider and also what they mean for your financial planning purpose. 

Young & single –

• Healthy, low financial responsibilities

• Purpose of plan – growth + tax saving

Just married –

• Healthy, slightly higher financial responsibilities

• Purpose of plan – growth + protection

Parents with toddlers –

• Physical and emotional stress increasing, financial responsibilities increasing everyday

• Purpose of plan – growth, protection, emergency fund

Parents with pre-teen kids –

• Middle age affecting health, high financial responsibilities

• Purpose of financial plan – growth, protection, emergency fund, funding

Parents with college going kids –

• Need to invest time/ money to stay healthy, financial responsibilities at peak

• Purpose of financial plan – lumpsum funding for kids, growth, protection, emergency fund, retirement income planning

Retirees

• Health needs constant attention, financial responsibilities decline significantly

• Purpose of financial plan – regular income, protection, legacy creation

To address the overall purpose of your financial plan based on your life stage you will need a combination of investments (growth & income), insurance, emergency fund, etc. Ensuring that your financial plan addresses all your needs based on your particular life stage will bring a feeling of security and satisfaction.

The more secure and satisfied your feel, better will be your efforts and results in all fields of your life. And you will be able to life a good life from today while preparing for your desired future.

Therefore, do spend good time to determine the full purpose of your plan, whenever you make a financial plan for yourself (with or without a financial planner). Also, whenever you move from one life stage to another, remember to adapt your financial plan too.