Money Milestone?

Phil Hendry01/10/2021

(The most common money milestones and what to think about)

Financial planning tends to be individual to each person, since everyone follows their own path.
So trying to adopt a ‘one size fits all‘ approach to every client’s life would be naïve of us…

That said, there are common themes or milestones that we as an industry notice.
Ones which pop up time and time again.
Naturally, these run alongside age and the big life events we all hope to have.


Milestone: The Wonder Years…

How does this look?

You’ll look back and ‘wonder’ where they went. Childhood lives and experiences vary greatly, but on the whole, we have yet to suss out money.
Where it comes from.
How to earn it and its importance.
So until then, just enjoy playing with that Lego!

What should we be thinking about?

Responsibility for this lies with your parents. If you are lucky, they have begun saving for you, which can be done through a number of different accounts/vehicles. Up until they expect you to access these savings, they have hopefully made the decision to invest it (seeking help where they need it), so that compound interest does what cash certainly isn’t doing right now!
This all leads up to giving you a solid starting block to go from.

Consider this
  • Research shows our money habits are formed by the age of 7.
  • The Bank of Mum & Dad will hopefully start early, teaching you about how they earn it, how to save it and how to grow it.
  • This is usually the time when ‘character building skills’ such as self-discipline, self-control and delayed gratification are formed – to make sure that shiny new things don’t become a vice!


Milestone: Choose life, choose a job, choose a career, choose a family…

How does this look?

That school bell is about to ring for the last time. You might have decided to apply for university, or start working straight out of school. Some of us may even want to start a business, and work for ourselves. Everyone is different and there is no right or wrong answer.
You may even find someone who tolerates you enough to want to start a family, buy a home and get married!

What should we be thinking about?

You will likely have a good understanding of how money fits into the world and your life. There could be some good habits yet to develop (and some bad ones that need to be fixed!).
Start by learning the basics such as budgeting, and starting some sort of regular saving plan. This will begin to put solid financial foundations in place.

Consider this
  • An understanding of mortgages will be useful if you want to buy your first home. Your own savings, gifts from your parents or an inheritance will come in very handy here. (Definitely worth thinking about a Lifetime ISA at this point, if that is the case!).
  • This should also be the first time to seriously think about ill health and your own mortality. More importantly, how resilient you and your young family are financially, so personal protection/insurance should be next to sort.
  • Longer term savings like a pension plan should be thought about and started early. Even though the thought of retiring is difficult to ever imagine. Especially when! But the tax efficiency is great, and the sooner you start, the more your investments will do the heavy lifting. With the end result being the less you will actually need to save.



Milestone: Grab that cash and make a stash…

How does this look?

Look at you go. Making strides into your chosen career. But maybe you want to have a change or even start that business idea you always thought about. All the while you need to think about gradually paying down any longer term borrowing like a mortgage, and saving for a life after working.
Your children are getting older and might be thinking about their next steps such as higher education, or wanting to move out.

What should we be thinking about?

Start considering your protection requirements, as you have an increasingly important financial role in your family.
Assess if you are on the right tracks with what you are building up for life after work, balanced with things you may need to consider before then. (house renovation/moving, additional school fees, early retirement, etc.).  Getting this balance right is increasingly important as you getting closer to no longer working, particularly if you want a career change or to start a business.

Consider this
  • You will likely want to set aside savings specifically for your children if you have them, or plan for things like their weddings as they become increasingly expensive. As we previously stated, starting earlier and saving modest sums works wonders and reduces the impact of funding these potentially painful lump sums!

Don’t be afraid of going off the map


Milestone: Winding down, not slowing down…

How does this look?

That end goal lies just within sight – the point where you think you could stop working and relax. And preferably lying in a hammock on a beach somewhere tropical. Bear in mind that this isn’t right for everyone and you may want to remain engaged and sharp through some other activity which isn’t necessarily financially driven.
The children are older and you feel you have helped them with important life events as much as you intend to.
…which is a polite way of saying ‘the Bank of Mum & Dad is now closed‘.
The urge to travel or buy a holiday home now seems within grasp. But this may be offset by the fact that you may have elderly parents who require help and care if they are not as capable as they once were.

What should we be thinking about?

You have hopefully accumulated a diverse asset portfolio, which could provide you enough to live off in retirement.
But equally, you need to understand how you do this and what is possible.
Continuing to invest is potentially the right option to ensure longevity of your savings, but how?
And what will that give you?

Consider this
  • You need to look at your current outgoings and your plans for retirement.
    This will help you start to realise what income you need, and what lump sum expenditure you need to fund. Hopefully, having understood that if you are able to retire now, then you will need your retirement savings to work for you.


Milestone: Golden Years…

How does this look?

Fingers crossed that you have stopped working altogether. Although you might potentially do some volunteering or engage in some community activity. You spend time with your grandchildren if you have any and have done most of the travelling that you wanted to do.
The children are on the whole financially independent now and no longer need your assistance. Hurray!
We hope that we won’t have to, but we may have to consider health issues at this point so later-life care might be in the back of your mind at this point.

What should we be thinking about?

Managed your money closely and wisely?
Nice – you should have enough money to know that you will not run out.
Hopefully you’ve not held back in doing the things you want to do, and are still physically and mentally active.

Consider this
  • Some clients find that they are in a position where they have more money than they will ever need or spend, so want to start gifting some to family or charity. This has the added benefit of being able to see the difference made if gifting directly. Charity gifting ensures that HMRC and the Government don’t get to take a large chunk of the assets you have built up, in inheritance tax, when you are gone.
  • However you are somewhat concerned about care costs, so need to carefully weigh up what you need to retain in the scenario, without hoarding assets you won’t spend, that will be taxed heavily.



Not everyone’s path will be so linear.
And this is perhaps a slightly rose-tinted view of how your finances may evolve over time.

However it does highlight the natural progression of things you might need to consider and focus on as the role and meaning of money in your life evolves.