Contributed by Credit Bureau Singapore
Our needs and wants change as we transition through different stages of our lives – from a student to an employee who is new to the workforce, to a seasoned worker all the way to a retiree. Not forgetting that we need to adjust our budget and spending habits as we take up more roles and responsibilities along the way.
As we progressively mature in the workforce and see a growth in our income, we may notice an increase in financial burden as we develop even higher expectations and ambitions for our standard of living.
Using the reference from the 5 stages of career development, this article sets out to give you a guide on how you can set your own financial goals in accordance to the different stages. This is also a good time to give yourself some space to think about where you see yourself in the coming years.
1. Exploration – early-20s
This is often referred to as a “trial phase” where you are probably very receptive to taking advice from the people around you.
These people can be your family, lecturers or even your friends. They might influence your final decision when you decide which field of study or industry you intend to venture into.
Some people might even try out temporary or intern positions during their school term break. This option might give you a clearer picture of your strengths and weaknesses before deciding what kind of role will suit you the most. This gives you a good head start to bulk out your resume and begin your first savings.
2. Establishment – mid-20s to 30s
The second phase begins with the search for your first full-time commitment job followed by your first paycheck.
As you take your first step into the working industry, you may experience many new situations and meet many new people who will help you settle into your role faster and develop new skills along the way.
However, do not feel disheartened if you have experienced challenges or setbacks along the way because this is all part of the process to help you grow as an individual. This is also the best period to start your first savings account to focus on growing a steady income of money.
3. Mid-career –30s to 40s
The third phase happens when you have progressed from a newbie to a seasoned worker.
Typically at this age, you would have experienced a career promotion and growth in your overall income. You should have a steady base of savings which gives you more assurance if you want to make big changes– for instance, wanting to settle down and start your own family.
During this period, you will notice a big shift in the prioritisation of your needs as most of your money will be spent on fulfilling your higher ambitions like buying a bigger house, purchasing a new car, planning your dream wedding as well as all the extra miscellaneous costs that comes along with a new member to the family!
4. Late-career –40s to 50s
The fourth phase is more relaxed as you would have established a firm position in the company and built up a steady reputation in the industry
You are more or less settled down in your current role and you remain both satisfied and fulfilled in your position. However, as our age starts to incline, unexpected costs can also be incurred during this phase. For instance, unforeseen circumstances like increasing health check-ups and increasing health issues which may indirectly increase your health insurance premium prices.
However, you have already built up a steady pot of wealth because you have already started on your pre-retirement plan.
5. Decline
The last stage is when you have decided that it is the best time for retirement.
You might switch to a less demanding part-time job or even participate in full-time volunteer events instead. Bearing in mind the loss of most of your income, you are well-prepared as you had already factored in the daily essential expenses and inflation in the years to come.
Check your credit report
Here is another piece of advice: remember to check your credit report from time to time.
Maintaining a good credit reputation is important especially when you have a need to purchase big ticket items for instance – moving houses or paying for your children’s school fees. Credit providers will check on your credit report before extending out a loan to you. The consequences of having a poor credit report can be dire. Should your loan application be rejected, you will have to seek alternative means for additional funds which might also mean that you will have to consider re-planning your finances, possibly delaying your future goals or even building your wealth.
All in all, we own our own timeline and our journey is unique to each and every one of us. The definition of happiness and success should be self-determined and not through comparison with others. Also, be sure to follow and like our Facebook page @creditbureausingapore for more useful content and tips to maintain a good credit reputation!
