Skip to main content

Money Management throughout Life Stages

February 24, 2014

Almost everyone wants to stay on top of their finances, but money management isn't always straightforward. Priorities shift over time - and often you're faced with unplanned expenses. It's important to have a flexible investment strategy that can change as your life changes.

Starting Out: Early Earning Years
As a young adult you may be thinking about paying off college loans and buying your first home. Before jumping into a big purchase, it's recommended that you have enough money saved to cover your living expenses for six months - should you lose your job. If your employer offers benefits such as a 401(k) plan, it's wise to take advantage of these types of opportunities because the sooner you can begin to save for retirement, the better off you will be.

Starting a family may also be on your mind at this stage in your life. Aside from the sleepless nights, babies also make a big financial impact on their parents. Preparing for these changes and considering where your finances fit into the new family picture is an important step. There are many factors to think about. Some are shorter-term, such as budgeting for daily necessities. Some are longer-term, such as establishing a 529 plan to save for college.

Wealth Building Years: Retiring Soon
The average American is at their peak earning years and is accumulating the most retirement assets when they are in their late forties and early fifties. As you begin to reach this stage in your life, you should meet with a financial advisor if you have not already started so that you can take advantage of these peak earning years. With the right preparation, retirement goals can be achieved sooner rather than later. It's also very important to remember that a mistake with your money at this point in life can make for a financially limited retirement.

In Retirement
You've made it to retirement! Now you need to make your savings last. Try to stick to the budget you have established, but be prepared for unexpected expenses. Adjust your investment strategy as your needs and goals change.

Some retirees choose to hold a part-time job after retirement. Many see it as an opportunity to have less responsibility, do something new, and stay socially engaged. Some do it because they need the money. Working part-time allows you to reduce the amount withdrawn from your nest egg.

Insurance Matters
An untimely illness or accident can be devastating, and the loss of income you could suffer can make it much worse. Health insurance provides coverage when you need medical assistance. Disability insurance can replace a percentage of your wages if you are unable to work, and life insurance can help to ensure your loved ones are covered financially in the event of a tragedy. Insurance needs change throughout life, so it's important to ensure you always have adequate coverage.

There are many considerations when planning for the future. The best advice is to seek out professional guidance. Consider a financial advisor. Managing money is their full time job. Financial advisors can help you stay disciplined about your financial strategies - from your early earning years, to retirement, to transferring wealth.

James Oosterman is the Vice President of Melrose Bank. He can be reached by telephone 781-665-2500, online at or on Facebook at

« Back to Articles

View More Articles

Discover everything we can offer.