Shakespeare wrote of the Seven Ages Of Man, here is the updated version from a financial aspect, we have created, to try and provide you with some idea of the age you may be at in your financial planning:
Nothing for self, all provided by parents and grandparents.
Mum and dad provide comfort/food/cleaning and are the “wallets” who know their places!
Gifts from family and friends into funds identified for children. Gifts made into bare trusts Grandparents and Parents make stakeholder pension contributions Or buy Premium Bonds Regular savings habits created
2nd
First part-time/school jobs
Spending on self CD's/DVD's/Clothes/Food/Stuff Try to save, but don't succeed. Maybe unable to save from first employment.
3rd
First of possibly many jobs
Yes, you have passed a number of exams, and think that a career in metallurgy is for you. Buy transport/bike/motorcycle/car.
3 years later change job
Metallurgy not exciting enough, but dealing with people preferred.
Choice of advisers -solicitors/banks/building societies
First real love - will you/he pop the question?.
Holidays.
Need to stop paying rent - borrow money from parents for deposit on house - why pay rent, when mortgage costs less?
Also your employer suggests you join the pension fund - yet more costs and less for you to spend. First introduction to the complexities of financial choice in mortgages/protection/ etc.; hard earned savings go on stuff for house, in colours which are to match everything else.
Employer says that the cover in respect of loss of income is now too expensive and you have to buy yourself.
If no income - unhappy. If income covers expenses - content. If income exceeds expenses - happy, and getting wealthier.
4th
Family
Known Certainties
1. Things always cost twice as much as you want to pay.
Yes, the patter of tiny feet, means you and your spouse live in 6 months expectant anticipation - then it happens, your child is born, and for 6 months you have three concerns: How do you keep your child happy -your spouse going ,when you are knackered.
2. Asking someone to do something for you takes twice as long as originally told.
Review finances, as children cost lots, and it's always more than you first thought, or budgeted for.
3. You 'fritter away £33/week on necessities'.
Check out Child Benefit; Working Families Tax Credit and Child tax Credit; Nursery Nursing costs; plus Child Trust.
4. You will probably move employments 3-7 times by the time you are 60.
Parents help when they can with babysitting/childcare duties - while you both get on working/possibly part-time.
5. Income is key to happiness
Money tight, but need to review life assurance - income protection and medical insurance - oh and make sure pension contributions kept up. Can you afford a holiday? Yes, somehow as you all need one.
Then along comes child no.2 and even 3,4 or more - How do you cope?
A trip to the shops is almost like planning for a trip to Everest, as everyone needs 2 hours notice and they are still not ready.
The dreaded pocket money, how do you cope with it? Choice of method.
Time for further education costs -how do you cope, but you do.
Unfortunately relatives die and leave an inheritance for you and children -what do you do - choices/options. You feel wealthy enough to ask for advice other than the banks customer adviser. Not sure what to expect.
You should ask friends for advice. A friend asks if you wouldn't mind being an executor - you say yes, as you think it wouldn't take time!!
Education fees seem to continue into middle age, even though the kids are aged up to 30, and still at home!
5th
Middle age, family and work
Kids have their own homes - but need some financial help from you.
You can concentrate on holidays, maybe visiting places that do not cater for all ages, especially children.
The company you are currently working for decides to downsize, but you cannot lose more weight, then stress - redundancy beckons, yet you have 15-20 more years working life left - what happens to everything -only 5 more years and mortgage paid off - but need to look at finances carefully.
At the same time, the other love of your life, becomes your only solace - buy your Harley Davidson motorbike does not know how to cook your food back to self-catering - bloody good these takeaways.
Redundancy payment needs investing - perhaps for a business -you have always wanted to run. Not sure what to do.
Needs support from family - bank to get you through.
Keep going, it does get better.
Keep saving - holidays - Health becomes important - go to gym.
6th
Retirement at last
It's here, the time you can say I'll do it next week and only your spouse will suggest an alternative timescale.
Tension in the house, you and your spouse are in the same space for most of time - last time this occurred was pk - pre-kids: need to do something as a leisure pursuit.
Clubs become important - joint activities enjoyable.
Grand kids arrive - need to set up trust fund or investments for them -how.
Consider moving abroad.
Downsize to smaller house to release capital from house, to pay for health bills.
Use of trusts
Inheritance Tax
7th Age
Care
Reduced to childish state again,
relying upon others to provide all you need to survive.
Enduring Power of Attorney should have been set up
8th Age
Who cares?
The Will - time to let those who you
love and know to benefit from your assets from beyond the grave
