Are You Planning For The Right Season In Your Life?

January 05, 2018

Just like the seasons change (and pretty much everyone on the East coast is being reminded exactly how bad winter can be right now),we all know that we go through different seasons of life. You wouldn’t wear shorts in January – at least not in the Midwest – nor would you enjoy the fall colors in spring time. To enjoy the season you have to adapt your activities (and your wardrobe). The same is true of your financial plan.

Are you planning for the right season?

Spring – Most people in the spring of their financial lives are in their early career and just getting started on their financial journey. It’s a time of learning and discovery and creating new habits and money mindsets.

Financial focus for this season: 

  • Establish a budget
  • Work to save up to the match on your 401k
  • Build an emergency savings
  • Pay off student loans
  • Work to be more aggressive toward other short and intermediate goals such as buying a home

Summer – Hopefully by about 10 years into your working life you’ll start to feel the sun peeking out from under those student loans and other debt. Just like summertime is busy, there’s usually a lot going on in the summer of your financial life — you’ll have many competing priorities. It’s important to enjoy this time of life while also making the most of the summer season.

Financial focus for this season:

  • Keep increasing retirement savings using the Contribution Rate Escalator, if you have it
  • Increase life insurance as your family grows
  • Make a will and establish other estate planning documents in case of tragedy
  • Start saving for kids’ education

Fall – As you head toward the last 10 years or so of your working life, you’ll be getting read for the harvest. Hopefully the kids are closer to being on their own and you’ll be looking to slow down with your spending.

Financial focus for this season:

  • Max out any and all retirement accounts
  • Pay off the house and do any work to get it the way you want it
  • Check your investment allocation to make sure it fits your actual retirement time horizon
  • Consider long-term care insurance coverage
  • Update your estate plan as your kids reach the age of majority

Winter – I’d consider the winter of your financial life to be retirement, when you’ll be living off the fruits of the previous seasons and enjoying a time of rest and turning inward toward family, friends and the things you hold dear.

Financial focus for this season:

  • Find your niche with family, friends, hobbies, etc.
  • Maybe work part-time to stay busy
  • Travel earlier in the “winter” while your health allows

I know it’s a bit of a cheesy way to look at it, but what can I say? My daughters would say I can be a cheesy guy. But my real goal is to point out that we sometimes get into ruts where we continue with old financial habits that may not be serving us anymore. Every once in awhile it’s a good idea to re-evaluate where we are in life to ensure that our finances are evolving and maturing along with our careers and lives.

Want more helpful financial guidance, delivered every day? Sign up to receive the Financial Finesse Tip of the Day, written by financial planners who work with people like you every day. No sales pitch EVER (being unbiased is the foundation of what we do), just the best our awesome planners have to offer. Click here to join.