While you begin creating the foundations of your life, you might ask yourself – should I be living for today or planning for tomorrow?
As you journey through your career, purchase your first home, start a family, fund your children’s education, or begin your investment journey, it’s crucial to set the right foundations that service your long-term goals.
During these early stages in life, you will be accumulating wealth. The key to success lies in finding a balance that allows you to confidently manage competing priorities, navigate financial ups and downs, and adjust to life's inevitable twists and turns.
Setting goals to a better financial future
Taking control of your financial destiny starts with setting clear goals towards achieving the life you envision. By breaking down your aspirations into short, medium, and long-term objectives, and adopting a comprehensive approach, you can create a roadmap to success.
What would you like to accomplish within the next 2, 5, and 10 years? Are you planning to move in with your partner, start a family, change your career, travel, throw the wedding of the century, buy a house, or something else?
Short-term: Focusing on now
Over the next two years, you might focus on adopting budgeting strategies, set clear savings goals, dabble in investing, and focus on the aspects of your immediate environment that you can control—will professional development help you with that promotion? Is it worth traveling before buying a property? Use your commitment-free time wisely to enjoy but ensure you are saving for your future goals and keeping “bad debt” to a minimum. Setting a budget and building a savings buffer is a good place to start.
Medium-term: What's next?
Wherever you see yourself in the next 5 years, you’ll likely see great change. Perhaps your career is taking off and you aren’t sure how to manage your increased income without succumbing to lifestyle creep. As you accumulate wealth, you may be considering how you invest that wealth - such as purchasing your first home or an investment property, or perhaps investing in the share-market or managed funds. Educating yourself on the fundamentals of investing can help you make informed decisions at this stage.
Long-term: Preparing for the future
Your career, family, and wealth will look different in 10 years. Setting goals for the future lifestyle you desire for you, your partner and/or kids, and putting plans in place now to achieve those goals, should be a top priority. You may build strategies around worst-case scenarios such as losing a family member, getting a divorce, losing your income, or illness within the family. Working with an experienced financial advisor can help you plan effectively for whatever challenges and opportunities come your way.
Building a solid financial plan and understanding how a financial advisor can help will assist you in reaching goals, investing with confidence, and setting up the right contingencies to feel secure in these early stages of building wealth.