How to build a financial plan for every stage of life

Graduation, marriage, and landing that dream job. When thinking of life’s major milestones, financial planning is rarely the first thing to come to mind - yet it is one of the greatest shapers of our successes, stresses, and future.  

Financial planning is ultimately about helping people reach their goals, says Nicholas Donovan, wealth advisor and associate portfolio manager at PWL Capital, which offers free podcasts on a range of topics. Money, he adds, is simply a tool; the real objective is using it effectively to support the life you want to build. 

Hardly as exciting as life’s achievements, understanding financial systems and planning ahead can nevertheless create enormous freedom down the road. No matter what life stage you're in, from cashing your first cheque to drafting your final will, investing time in your financial literacy can pay dividends for years to come.  

Build your financial foundation early 

Young professionals may not treat financial planning as their first priority, but the truth is that early foundations yield the richest results.  

"It's always good to have a slight roadmap,” Donovan advises. “Let's have a really rough idea of where we're headed and let's set things up appropriately."  

Families, homeownership, and retirement may feel like lofty goals for those early in their careers, but the benefits of building a foundation are huge. Even the roughest of plans can provide the security to move once your vision is clearer.  

Financially, priorities should be paying off high-interest debt while also creating a realistic budget that slots into your lifestyle and needs. Once these basics are covered, even modest investments can compound into major assets over time. Meanwhile, building an emergency fund can provide valuable peace of mind, giving young professionals the space and time to reflect seriously on their goals.  

"Rules of thumb are nice, but everybody's different and wants different things,” Donovan remarks. “What we want to do is understand our clients' unique circumstances and goals and tailor to them.”  

Give yourself the gift of financial literacy 

Fundamentals of financial education, despite being relatively simple, are often overlooked, making it all too easy to miss out on key tools. Registered accounts like Tax-Free Savings Accounts (TFSAs), Registered Retirement Savings Plans (RRSPs), and First Home Savings Accounts (FHSAs) can help to save, invest, and in some cases, even reduce your taxable income.  

For taxes themselves, learning the basics of how the system works, what deductions you are eligible for, how you might be able to split income with a spouse, and how to plan your taxes efficiently can pay off significantly each spring. Women in particular should explore financial literacy, because while they are often disciplined and patient investors, fewer women than men feel confident about their knowledge. 

Homes, family planning, and insurance  

As you progress in your career and develop a clearer sense of what you want your life to be, new financial challenges can emerge.  

Buying a home, for example, means planning for more than just a mortgage payment. Prospective homeowners need to account for down payments, closing costs, fluctuating interest rates, property taxes, maintenance costs, and the broader impact that home ownership can have on other financial goals like travel.  

Planning a family also comes with its own share of challenges. Just as building a budget early in your career is essential, so too is carefully preparing for the costs associated with raising a child. Beyond day-to-day expenses and childcare, new families must think long-term by making educational investments, such as a Registered Education Savings Plan (RESP), to help set their child up for success.  

Family planning also means preparing for the worst. Income changes, major illnesses, and even death should be accounted for ahead of time - a burden that can be helped with strategic insurance plans.  

“If something were to happen to your ability to earn income,” Donovan says, “you need to ensure your family can still maintain their standard of living.” 

Midlife planning and retirement  

“As you approach retirement, that's when we really want to drill down and say, 'What needs to be done today to get you to a good spot?'" Donovan explains.  

For those approaching their golden years, financial planning becomes less about growth and more about laying the foundation of a future lifestyle. Donovan says investors should evaluate whether they're prioritizing the right accounts, including RRSPs and TFSAs, while considering future government benefits and tax implications. Taking a ‘big picture’ look at your standing becomes vital.  

Before retiring, it is important to understand not just how much money you have saved, but what that money needs to do once you leave the workforce. "Are you saving enough, and are you saving in the right areas?" Donovan emphasizes.  

Downsizing and estate planning for your golden years 

Once that final work day ends, a new world of financial considerations opens up. With grown children, set budgets, and ample time, many retirees find themselves with more options than they expect. For some, downsizing becomes an attractive route, both to simplify their lives and open new possibilities.  

"Some clients never want to downsize, and sometimes that works,” Donovan remarks. “Other times…  [downsizing] could be a lever to pull in the financial plan to increase sustainability." 

As the years advance, it becomes important to start planning for your departure and to consider your estate, though, in truth, it’s never too early to start. “It’s better to make these decisions ahead of time,” he says, “rather than leaving them for difficult moments later.” 

Facing our own mortality is both emotionally challenging and bureaucratically complex. Still, effective estate planning can help ease the burden on loved ones and ensure your final wishes are carried out after your time. Drafting a will, assigning powers of attorney, and designating beneficiaries are all manageable steps that provide valuable peace of mind. 

“You never know what life holds,” he adds. “It’s always better to have a plan.” 

To boost your financial confidence and start investing smarter for your future, get in touch with PWL Capital today.