The Game of Life – Key Financial Challenges for Each Life Stage

Financial stress is rife at the moment, but it is not unique to the present day and the immediate challenges we face. There are challenges to face at every step of our journey through life; what are they, and how can they meet them?

Young Adulthood

Young adulthood is the most devil-may-care time that most people will ever experience. Even potentially stressful financial situations tend to bounce off us at a younger age when large overdrafts and debts are incurred through university, social lives and the beginnings of an independent life.

This time also happens to be the best possible time in which to form good financial habits and set yourself up for the long term. Investigating savings options here enables you to make the most of the money that you do save, with the early opening of a tax-free ISA leading the way to emergency funds and healthy levels of untrammelled interest.

Early Career

Those first furtive steps into a career can be extremely daunting, but also extremely affirming. For those enough lucky to find the right mentors early, this can be a highly engaging time for upskilling and getting comfortable within a given career track; for others, the journey is much less linear, but there are few ‘wrong ways’ to begin.

The financial challenges come from balancing the relatively low rates of income afforded by junior roles with the rapid onset of major financial demands, which include the payment of debts and student loans. Indeed, this is a point where financial stress can reach a major boiling point for people.

First Home

With time, and with some hard financial lessons, stability soon arrives. In moving up the career ladder to a more comfortable annual income, family planning becomes much more viable – as does the possibility of buying onto the property ladder. Still, with property values having risen at a much quicker and steeper rate than annual salaries, it has become much harder for the average first-time buyer to actually buy property. To this end, many are forced to rely on the unfortunate boon provided in inheritance money in order to make that first step into homeownership.

Family Planning

With the first home in hand, family planning can begin in earnest. Starting a family is one of the most beautiful things a person can do, but it is also a shockingly expensive endeavour. Family assistance again can be vital here, as can careful budgeting of food, other supplies and services like childcare. Depending on your income, government schemes may be able to help offset some of the stress.

Retirement

The next great financial challenge – at least, after the heavyweight that a teenage child can place on your wallet – is retirement. Later life needs to be budgeted for, and doing so is not easy. Pension plans are not guaranteed to stretch far, making long-term savings plans essential for maintaining a quality of life after leaving work.

No two life stories are the same, and what might make sense for one financially does not necessarily make sense for another. Still, basic considerations with respect to emergency funds and long-term savings planning can make all the difference on our journey through life.