Stage 2

designbythink 2017, Quarter 1 Newsletter 2017

Stage 2: Age of Responsibility (30 to 45)

TRACK YOUR SPENDING

During these years salaries usually increase, but personal responsibilities increase too.

For instance, you may get married, purchase your first home, or have children. It can be difficult at this point in life to make additional savings, but persevere as it will pay off in the end. Although other financial obligations may seem more pressing – a bigger home or nicer car can easily consume your increasing income.

This is also the time when the financial decisions you make will have the greatest impact on the financial lifestyle you will enjoy during retirement.

By now, you should have developed some savings and the expertise to make sound choices.

STAGE 2 tips:

  • Increase your retirement savings every time you get a salary increase.
  • Track your spending and adjust your budget.
  • Start early to save for your children’s schooling and university.
  • Invest wisely and as tax efficiently as possible. Choose investment savings vehicles that match your time horizon, risk tolerance and tax saving requirements. Don’t ignore the potential long-term returns of equities, but talk to a qualified adviser – we recommend Alexander Forbes as they are not product or commission driven.

  • Your emergency account should now contain six to nine months of living expenses safely saved.
  • Ensure that your insurance protection keeps pace with your needs. Adequate life insurance to protect your family, in case of your untimely death, is critical.
  • Prepare an estate plan to minimise taxes and to ensure that your custodial, financial and medical wishes are carried out.