Financial Maintenance: A Lifelong Journey

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Just like our bodies need regular check-ups, our finances also require ongoing attention and maintenance. Financial maintenance involves more than just paying bills – it's about proactively managing your money to ensure long-term financial well-being.

Financial Maintenance Throughout Life

Financial maintenance will need to occur throughout your entire life and at every stage it will look a little different, so today we're going to be breaking down some of those stages.

Early Career

When you're early in your career it is crucial to focus on building a strong foundation. This includes actions like establishing a budgeting, and starting to save for things like retirement. It may seem like you have years to save for something like that, but the years pass fast, and you can not gain back the power of compound interest. You need to build an emergency fund, because right now, chances are things and money are good. But once life starts going, and you begin to look at buying a new car or a house, or even starting a family, emergencies are going to come up. You need to be prepared. And of course, set yourself up early and do everything you can to minimize debt and debt accumulation.

Family Building Years

If you want to build a family, or are in the midst of it, first congratulations! Families are expensive, and kids cost a lot. So we encourage you during this time to adjust to those increased expenses, which can include things like planning for childcare, or saving for future expenses. Schooling, sports, or other. But don't stop saving for retirement. Like we said, you cannot get back the power of compound interest. 

With the cost of a family, you need to review and adjust your budget. The cost of bills will rise, new expenses will come in and they need to be worked in. We encourage you to look at family friendly insurance programs, to again prepare for the unexpected, but the inevitable. Also, consider college savings plans.

Mid-Career

Once you move into your more mid-career stage, your focus is probably going to switch again. In this stage you're likely in the peak of your career, working as hard as you can. So we encourage you to do everything you can to maximize your income. This compensates for the larger life costs, but also accelerates your retirement savings. This way you can increase your retirement contributions, preparing for the coming years. We also encourage you at this time to really explore professional development options. Really try to grow and push yourself right now, this is the time to do it. Of course, if you have kids, continue to either look into or continue contributing to a university or college fund. Really in this stage, you're in the maintain and seek growth stage.

Approaching Retirement

Your focus here is making sure everything is ready and in order for the retirement that is just around the corner. If you have been preparing all your life for this, we hope that this stage is easy and filled with the least amount of stress possible. If not, that is okay. It is not over yet. If you are not financially prepared for retirement, right now your goal is to maximize every amount of savings that you can put aside. The white knight will not come to save you, so I encourage you to get going, like right now. 

Continue to consistently review your savings plan, and investments if any. This may also be the time to explore long term care options, or just open that possibility even if that won't be for a while.

Retirement

Congratulations! You have made it to retirement!  In this stage, if you are here or are working your way here, we hope it is peaceful and happy. On the financial side, your new focus is to be managing your retirement income. Adjusting to your new lifestyle, and ensuring your financial security in retirement. You still have to budget and think about your money, because this money is yours to survive on for the rest of your life. 

So, monitor your expenses, monitor any investments you have, and if worst comes to worst, do not be ashamed to explore options for generating additional income if that is what is necessary. 

Key Principles of Financial Maintenance

To sum up everything we have talked about today, we can boil it down to three key principles. One is Regular Review. Conduct regular check-ups on your finances, reviewing your budget, investment portfolio, and insurance coverage. Two, is Proactive Adjustments. Make necessary adjustments to your financial plan as your life circumstances change. And three is Continuous Learning. Stay informed about financial matters and seek professional guidance when needed.

By embracing a proactive approach to financial maintenance, you can navigate life's transitions with confidence and achieve long-term financial security.

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Best regards,

The Debt-U-Cation Team