Financial checklist for each generation

As you enter different stages of life, your financial plan and strategy should adapt to your changing circumstances. Here’s what to include in your financial plan during every life stage.

Gen Z: Starting out

If you’re in or approaching your 20s, you’re in a great position to set a solid financial foundation by getting into good financial habits that you can build on:

• Create a budget (and learn to stick to it). Developing this skill early when you’ve got less expenses makes it easier for you to be consistent at it and for it to become a habit. Prioritise 50% of your income for necessities (i.e. food and rent) and put 20% towards your savings and if you have debt repayments. The remaining 30% can go to having fun and getting the things you want. 
• Start saving; you have the advantage of time, and that means even small amounts can become significant with compound interest. The easiest way to do this is to open an account dedicated to your savings and automate your contributions.
• If you have a student loan or credit card debt, develop a plan to pay it off sooner because the longer you leave it, the more expensive it will become. Prioritise a portion of your budget towards getting rid of high-interest debt and avoid debt going forward.

Millennials: Building and developing

As your responsibilities and your ambitions start to grow in your 30s, you need to put certain financial measures in place to protect yourself and help you achieve your goals:

• Have a dedicated and robust emergency fund. This will create a financial safety net and help with unexpected expenses and going into debt.  
• Manage your high-interest debt strategically and pay it off. If you’re still carrying student debt or credit card debt, now is the time to prioritise getting rid of it because the money going towards paying that could be used more effectively elsewhere.
• Kickstart your retirement planning. It might still seem far away, but that counts in your favour to help you create a nest egg for your golden years without stress.
• Set up a tax-free savings account and start benefitting from growing your money without having to pay tax on it.
• Get life and disability insurance so that you and your loved ones will be protected financially if something unexpected happened.

Gen X: Established

• In your 40s–50s, your financial life becomes a bit more complicated, and you need to start making the most of your money and your financial planning: Update your estate planning so that you’ve got measures in place to protect your family, your assets and yourself. You should have a Will, a plan for taking care of your dependants, taking care of funerals and what your final wishes are.
• Ramp up your retirement planning by making sure you’re contributing as much as you can and that you’re taking advantage of tax-efficient saving.
• Reassess your risk and adjust your investment strategy so that your focus is on creating a solid source of income to take care of yourself during your retirement.
• Review your insurance, from life to medical and everything in between. Ensure you’ve got the right type of insurance and that the benefits, restrictions and terms still suit your lifestyle.
• Manage and reduce your debt because you don’t want to go into retirement with debt and use your savings to pay your debt.

Boomers: The golden years

If you’re retired or approaching retirement, it means a big shift in financial planning and responsibility, but whatever your financial situation, you can still build healthy habits and achieve your goals:

• Live within your means but also what your lifestyle needs are. If you don’t need a big house anymore, think about downscaling and the benefits thereof. You also need to manage your withdrawals so that your savings can last longer and manage your debt.
• Understand the tax implications of your withdrawals and how you use your money as this could influence how you spend your money.
• Get your estate in order so that your legacy is left in the way it should be and that your estate transfer goes smoothly.
• Adjust your healthcare planning so that you’ll be able to cover the costs of your long-term care.

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_{Disclaimer: This article is solely intended for information. It does not constitute financial, tax or investment advice or recommendation. Please speak to a financial advisor or registered financial professional before making any financial decision(s).}

_{Standard Bank, its subsidiaries or holding company, or any subsidiary of the holding company and all of its subsidiaries make no warranties or representations (implied or otherwise) as to the accuracy, completeness or fitness for purpose of the information provided in this article or that it is free from errors or omissions.}