Rule 32: Understand That Your Financial Needs Change at Different Stages of Your Life

You’re likely to have a different focus, a different strategy, during different stages of your life. For instance, when you’re 20, you might be be young and foolish and getting an education. Ages 20 to 35 is when most people get married and raise a family. Ages 35 to 55 might be when you advance your career. Life after that is generally for retirement.

Essentially, your financial needs change over time, reflecting what is going on in your life at the respective stage, and the choices you make in your lifestyle at that time. This rule is not only about checking where you are and what you need. It’s also about anticipating your needs for the upcoming stage and about knowing that the conditions that influence your needs do and will change. You have to make allowances for differing circumstances.

You have to do a bit of foreshadowing; you have to anticipate your needs. For example, if you’re about to invest all your spare cash in a long-term investment, you’re gonna be screwed when you go on maternity leave, when you want to go on a vacation, or when you have an emergency. Anticipate your future needs and changes.

Where are you in your life? How much do you need? What is the next stage for you? How much are you going to need?