At What Age Do You Think About The Future?

(The following is a guest post on behalf of Compare The Market.)

The first major decision a person has to make about their future probably begins with selecting a college or deciding to get a job right after high school. However, this decision is one that is often reversed for different reasons, and while it may have life-altering consequences, it is not really planning for the future with a purpose.

When to Start Planning for the Future

A person should begin thinking about future goals and responsibilities once they are in their early to mid-20s. This is when all the irresponsible behaviors and party-life should be ending and the person is settling down. Marriage and a family could be on the horizon, and planning for retirement should start at this time. It could also be a time when the person is thinking about purchasing a home and securing their financial portfolio.

Purchasing a Home – Mortgage

In the 1960s the average age for a first time home buyer was 23. Today, the average age is 34. The recent home crisis is not helping this situation, as lenders are looking for more money down and a stable financial background before writing mortgages. However, starting to plan for the purchase of a home should begin in the early 20s. A person should start saving for the mortgage that they will assume one day as well as protecting their credit rating to make the process financially advantageous.

A home is probably the largest investment a person will make. Even with the fluctuations in the market, real estate is still a good investment vehicle. Some entrepreneurial 20-somethings even start purchasing properties that need to be remodeled. They can purchase them at a cheaper price, do the renovations themselves, and either flip the home or use it as a rental property that generates income.

Raising a Family – Life Insurance

While couples are also marrying later, planning for a future that includes a wife and children should start early. First, a person has to determine the important attributes they are looking for in a spouse, and dating for a few years helps solidify those decisions. Finding a partner with shared values and goals is not easily accomplished.

Many couples wait until they have children before thinking about life insurance, but it is something a person should have even if they are single. Purchasing a basic life insurance policy when a person is in their early 20s is a way of starting on an investment vehicle. It can be converted to a more meaningful income-replacement policy if children are involved, but the earlier the person starts saving money into a whole-life policy, the sooner it will be paid off if there is a need to borrow from the policy for any reason.

Planning for Retirement – Pension

The retirement age is getting higher and higher, especially in a down-turn economy. Yet, some people still are able to retire at an early age and live a life full of travel and leisure. That is because they started investing in their retirement fund in their early 20s. There are so many ways to start investing money even if the person is not employed by a large company. Determine what percent of income should be banked for retirement, and always put aside that amount no matter what level of employment. As income increases, the same percentage should be faithfully put into some type of investment vehicle.

As soon as a person becomes employed, whether at age 15 or 23, they should be thinking about their pension. Once money begins to accumulate in the bank, consult a financial advisor and start formulating pension planning.

Education

A person may have to enter the workforce and forgo college due to financial concerns, but it is never too late to get an education. A decision made at age 18 does not have to define the future. Many people enter schools of higher education in their 30s or 40s. Never close the door on reaching education goals as part of planning for the future.

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26 Responses

  1. Ariana Lemarr says:

    Honestly, I felt I didnt have enough savings for my future. I guess I have a lot of steps to go, including a house and pension plans. But I am trying to be optimistic since I already have a job. Thanks for sharing the insights about thinking of the future.

  2. krantcents says:

    Retirement has changed the most since some will never retire. <ostly due to no savings although some will work because they want to. How will this affect the job market?

  3. I’m already thinking about it. 😉

  4. i think a lot depends not only on you as a person but also your upbringing. I know I have seen some families start showing their children the importance of savings before age 10. Some end up learning on their own and may never really focus. I started thinking about the future at age 16. I know more so what I didnt want or how I didn’t want to end up and went from there.

  5. I think it is always a good time to think about the future. Too often we wait until a big life event before we deal with important issues pertaining to our future. Often that’s the very time when we need to focus on other things!

  6. FG says:

    Prepare to live a very long time… i.e., 100 and beyond. And prepare for a world in which there are not a lot of government handouts.

  7. I don’t think you can ever start to early when it comes to thinking about the future. At every age and with every decision you are changing your future so it is important to keep it in the forefront of your mind.

  8. Dave Hilton says:

    I was trying to find a link to a study I read about some of this- but I couldnt find it.

    The study showed that the age of responsibility is starting to shift to early 30s because so many Millennials ( the younger Gen Xers) are living at home with their parents for years after graduating college. This shift is delaying their experience of paying bills on their own. Problem is, many of them arent saving that money- theyre just using it to fund their lifestyle.

    Ill keep looking for that study Ill post the link when I find it.

  9. Jai Catalano says:

    My mom made some mistakes early on and I learned quickly to NOT do what she did. She helped reinforce that which was very helpful. I think I am trying to instill it in my kids now. At least I hope I am.

  10. It is astonishing how has much changed in one generation. It seems kids these days (I use that to describe those under 30) are blossoming really late. Living with the parents, taking six years to get a bachelors degree and really not entering the workforce until their mid to late 20s puts them in a position where they’re inevitably pushing retirement back, unless they really kick butt with their career and are diligent about saving. I hope the Millennials realize this before they’re arthritic and continuing to slave away while collecting meager social security checks (if those will even be preserved for the next 40 years).

  11. Never too early to think of retirement as it is obvious public finances are in the gutter. Those who will be retiring at 60 or 65 will be luck in the years to come!

  12. Shilpan says:

    Having a loving and financially tuned spouse is must for 90% of you happiness.

  1. February 10, 2012

    […] 5. At What Age Do You Think About The Future? @ Buck Inspire. […]

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