Everyone’s milestones are different. For some people, they involve graduation, following a single career (e.g. in the police force) and getting married with children. Others may go straight from school into business, or devote their lives to a cause or charity.
Whatever your milestones, it helps to plan how you will achieve them. This is not to say that you need every year of your life planned in advance. However, by reflecting on your values and life goals, you put yourself in a better position to maximise the time you have.
In this guide, our Carlisle financial advisers share some tips on planning effectively for life’s various milestones. We hope these insights are helpful for you and your family. Please get in touch to discuss your own strategy with us over a free, no-commitment consultation.
University and Graduation
Does university feature in your vision for the future? If so, how can you prepare financially to achieve this goal?
Home students in the UK can typically apply for student loans to cover their course fees (in Scotland, many students have access to free tuition). Maintenance grants are also available to help with living costs.
However, the latter may not be enough to cover your university expenses. So, you may need to save ahead of time to ensure you can live comfortably.
One idea could be to use a Junior ISA to build up some funds. In 2024-25, up to £9,000 can be contributed to your account – e.g. from part-time work or gifts from family members – and any interest, dividends and capital gains will be tax-free.
Starting a Career
After finishing school or university, many young adults start their careers. This might involve moving out of the family home – e.g. to rent somewhere with friends as you apply for jobs.
This is a key time of life transition. Suddenly, you are receiving a monthly salary and need to pay bills. Parent allowances may stop, and you need to keep track of your income and expenses.
Having a financial plan beforehand can minimise costly mistakes during this time of “finding your feet”. For instance, drawing up an estimated monthly budget can help reduce overspending risk.
You will enjoy a greater sense of purpose if you also have a plan for professional growth and career progression. If you are going into a trade, for instance, how will you develop your skills and experience?
Which career directions and opportunities do you envisage, and how can you put yourself in the best position to take hold of them when they arrive?
Marriage or Committed Relationships
Many people eventually choose to share their life with someone, building a home with a spouse or committed partner. This involves a big mindset shift.
No longer are you simply making financial decisions for yourself. Now, you share responsibilities and mutual goals. You begin to think about a shared future with a team vision.
Your finances become more intertwined, possibly involving joint bank accounts (e.g. to manage shared bills, like the mortgage).
This transition can present some fantastic opportunities to build your shared financial plan. With two incomes, for instance, you could significantly boost your savings and investments together.
One idea is to look at the Lifetime ISA. In 2024-25, you can put up to £4,000 into your LISA each tax year and get a 25% “bonus” from the government (up to £1,000).
This is available to both of you. So, working together, you could maximise this benefit to gain an extra £2,000 per tax year – even setting aside savings and investment growth! This could make it easier to make that first step onto the housing ladder.
Parenthood
Having children has a huge impact on your finances. Taking time off work to raise infants and toddlers can be very costly. Paying for childcare is also not cheap.
If you are open to having kids one day, you will create more options for yourself if you plan for this possibility ahead of time. For instance, which person will look after the children when they are little? Will you share the responsibility? How might your finances be affected?
In particular, would you still be able to afford your lifestyle if one (or both) of you took a career break during parenthood? What if your rent or mortgage payments go up – e.g. due to a possible rise in future interest rates?
What kind of safety net would you fall back on if things went wrong – e.g. one of you suddenly had a bad accident and could not work for a while? Here, financial protection policies, such as life insurance or income protection, could be invaluable.
Retirement
There are many other possible milestones we could mention. However, due to limited time, let us finish with a crucial one that many people eventually face – retirement.
What might retirement “look like” to you? How might your values, goals and spending habits change as you get older? How can you prepare for a comfortable lifestyle when you stop work or wind it down?
The earlier you plan for retirement, the more time your savings/investments can benefit from the power of compound interest (“interest on interest”).
For instance, at the start of your career, consider developing a healthy habit of contributing to your pension. You will thank yourself later since there will be less need to make up potential shortfalls as you near retirement..
We hope this content gave you more clarity on how to plan financial for different life milestones. To discuss your own financial plan, please get in touch to arrange a free, no-commitment consultation with an adviser here in Cumbria, County Durham, or across the North of England.
This content is for information purposes only. It should not be taken as financial or investment advice. To receive personalised, regulated financial advice regarding your affairs please consult your Financial Planner here at Vesta Wealth in Cumbria, Teesside and across the North of England.