20 August 2019

What are your priorities?

10 min read

 
Melanie Wright

Melanie Wright

Personal Finance Journalist

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Your financial priorities tend to change in line with your life stage. With a little planning you can be better equipped to manage those priorities.

When you’re a child, for example, your priority might be persuading your parents to give you more pocket money, or saving up to buy that toy you’ve had your eye on for ages.

By the time you reach your late teens or 20s, however, it’d be a little odd if either of these was still your focus.

Although you’re bound to have your own specific goals, here are some common priorities many of us have at each life stage.

 

Your late teens and 20s

Your late teens or early twenties is usually the age you’ll flee the nest, becoming financially independent – and often having to do your own washing - for the first time.

If you’ve gone straight into work following school, you might be trying to build up some savings for a property deposit, or you may be using your income to pay rent.

Those who go to university or college after school will usually find paying down student debts is top of their priority list once they leave. Often the amount you owe can seem horribly daunting but trying to stick to a spending budget can make it easier to clear what you owe more quickly.

 

Your 30s and 40s

By the time you reach your 30s and 40s, you’ll usually have been working for several years. You might be moving up the career ladder, leaving you with a bit more cash to play with.

You may now be in a position to buy your first home, or to move up the property ladder if you’re already a homeowner.

This might also be the stage in life you decide to move in with a partner or get married, in which case you’ll probably need to save up a lump sum to cover your wedding costs – unless you’re lucky enough to have generous loved ones footing the bill.

You might also be thinking about starting a family, in which case you’ll need to consider how you’ll cover childcare costs if both parents are working.  Once you have dependants, you’ll also need think about having a financial safety net in place, so that you’d be able to cope financially if you suddenly lost your income or were unable to work.   

 

Your 50s and 60s

Once you reach your 50s and 60s, you may be starting to think more about retirement, and whether your pension is on track to provide you with the sort of lifestyle you want when you stop work. 

Not everyone wants to stop work completely, so you may be considering reducing your hours gradually, or perhaps continuing part-time for as long as you can.

You might still have big outgoings to cover, especially if you’re helping children to make ends meet at university. Or, if your kids now fend for themselves financially you might find you’ve got a bit more of your income free each month.

This period is often a time to reflect about the sort of legacy you might leave, not just financially, but also in terms of the difference you’ve made and can still make to others lives.

 

Your 70s and beyond

Health is a priority at every stage of life, but in your 70s and beyond, it often becomes even more of a focus thanks to age-related ailments.

Of course, not everyone suffers ill health as they get older. Many people are hale and hearty long into their eighties and nineties, but it’s worth thinking about what you might do if perhaps in future you aren’t able to be as independent as you are now.

You might think about downsizing, for example, or making changes to your home to make it easier to live in as you get older.

And it might not be the cheeriest of subjects but this may also be the time you’re thinking about inheritance tax planning, covering funeral costs and making sure your will is up to date, so that you can be certain your loved ones will be looked after when you die.

 

Planning matters

Everyone’s priorities change over the years, depending on our personal circumstances at the time.

Why does this matter? Well, understanding our priorities can help us work out what we need to do to achieve them.

Just remember to take stock every few years and think about what’s changed and the things you now need to focus on. That way, hopefully you’ll be prepared for what’s to come.

Biography

Melanie Wright is an award-winning freelance financial journalist, who has written about personal finance and consumer issues for the past 22 years. She is a former Deputy Editor of The Daily Telegraph's Your Money section, and wrote the Sunday Mirror’s Money section for more than a decade. She contributes to a wide range of publications and websites, including The Sunday Times, The Daily Telegraph, The Observer and the Radio Times.