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Taking life a step at a time

It can be hard to know if your life is on the right track. Should you move out? Change jobs? Buy a home or rent? Save for the future or spend now? You’ve never faced any of these big decisions before, and life doesn’t come with an instruction manual. Or does it?

The Unbiased Guide to Life is no instruction manual – but it might be the next best thing. Breaking down adult life into six distinct stages, it highlights the biggest decisions that you may face at each step, and how to approach them. With this guide you can find out what advice you need along the way, from saving and mortgage advice to retirement planning.

Ready? Let’s go.

Young adulthood: 18-25

Your independent life starts here! It’s time to get to know the adult you’ve become.

This part of life’s journey can be the bumpiest, so prepare for these twists and turns.

Higher education

College or university may be your first experience of living away from home. You’ll want to check out our guides to saving money and reducing student debt.

Also make sure you know how to manage and pay off your student loan, and save money for life after university.

Starting work

After graduating, your next big challenge is finding work and earning cash until you find a steady job. If you’re self-employed (or have several jobs) then you’ll need to learn about your self-assessment tax return.

This is also the time at which you should join a workplace pension scheme (or start your own self-employed pension). Don’t put this decision off – you’ll really thank yourself for it later.

Cash is at a premium during these early years, so be sure to follow our top money saving tips.

Getting a car

Buying a set of wheels counts as a big decision at any age, but especially when you’re young. Will a car be good value for you? Find out with our car-buying decision guide.

Leaving home

It’s time to find a place of your own. You’ll probably have to rent your home with friends at first – but if you want to get on the property ladder it’s possible to buy a home with friends too. Another option is shared ownership, which is a mixture of renting and buying.

Saving for the future

Although most of your income will go on daily living, you should start to build up some savings if you can. Lay down savings for emergencies as well as long-term goals like buying a home. Some kinds of accounts have special features to help you do this: find out about ISAs for long-term saving.

Adulthood: 26-35

By now you’re setting your overall direction in life, and perhaps finding your ideal travelling companion to share the following milestones.

Developing your career

This is the time for climbing the career ladder and maximising your potential – later on, family commitments may slow you down. Be proactive, seize all training opportunities and set your long-term career goals. If you’re an entrepreneur, follow our tips for starting a business.

Buying a home

You should have been saving up for a home in earnest for some time, and may soon be ready to buy your first home. Stay aware of all the help-to-buy schemes and build up your credit score in preparation.

Getting married

If you’ve been lucky enough to meet The One, marriage could be on the cards. Getting married is a huge commitment and has lots of wider implications. Even if you’re just cohabiting, combining your finances is a big issue in itself – and you may want to write a will to protect each other.

Starting a family

Having children is without a doubt the biggest decision you can make. From now on you’ll plan your finances around your family, and you may also want to think about finding the right insurance. Writing a will is now essential.

Planning ahead

Always try to ensure that a portion of your income goes into savings (for emergencies) and investments (for long-term goals). Read on through this guide to identify the future decisions that may require extra funds.

Prime: 36-45

Are you settled down, building on the progress you’ve made, or looking ahead to the next challenge? However you spend your prime, don’t forget to take time to enjoy it!

Upsizing your home

Perhaps you’re ready to consider buying your next home. Even if you’re staying put, don’t forget the value of regularly remortgaging to keep on the best deal. You might also look at home improvements or extensions.

Raising your family

If you have children, some of the future is already mapped out for you. Put savings in place for them and investments for their education – these are clear long-term goals so you can act with confidence. It may also be a good idea to protect your income.

Optimising your pension

As busy as you are, don’t forget about your pension. Take stock, look ahead and ask, ‘Am I saving enough for retirement?’ Now you have a higher income but still plenty of time ahead, you can make a major difference, so review your pension arrangements.

Building financial security

You may be in a position to take out some big investments for the long term, such as buy-to-let property. This can be a good source of current income as well as a nest-egg for the future.

Mid-life: 46-55

There’s no need for a crisis. Mid-life is often a time a reflection, a time for reinventing yourself, or for exploring more of life’s possibilities.

Settling down

Round about this time you may find your ‘forever home’ – the house you plan to live in at least until you retire. If you have the resources, you may also wish to buy additional properties such as a holiday home.

Children in higher education

If you have children, university or college may be beckoning. If so, it’s time to access those investments that you hopefully put aside for the purpose. You can also remind yourself of the many other options for funding education and managing finances as an undergraduate.

Children leaving home

Whether for higher education or for work, children living away from home for the first time is always a huge wrench and a source of worry. Put your mind at ease and help them with our practical guide to leaving home.

A career change?

Is it time to rethink how you earn a living? Maybe you’ve spent years thinking about how to set up in business yourself – and now you have the resources and confidence to do it. Alternatively, it’s not too late to retrain to do something completely different.

Taking a career break

If it’s too long to wait for retirement, you can escape the rat race for a while by taking several months off work, to do the things that really inspire you such as travel, creative projects or charity work. Find out more about career breaks.

Emigrating

Another way to revitalise your life is to start afresh somewhere else. Who might you become and what might you achieve by moving to another country? You might do this at any age, but wanderlust often strikes around this time.

Divorce

It’s sad but true that this period of life sees the largest number of divorces. If you are getting divorced, a good solicitor on both sides can minimise the stress and ensure a fair outcome for all – including any children.

Helping elderly relatives

If you have elderly parents, you may find they are increasingly reliant on you for help and support. It may be up to you to arrange care for them or set up power of attorney so you can manage their affairs if it becomes necessary. They may also need help with estate planning, and you should familiarise yourself with what to do in the event of their death.

Maturity: 56-65

As you enter the home stretch of your working life, it’s time to secure your long-term future and finish on a high – or prepare to start afresh!

Many of the key steps of mid-life can equality apply to this decade, but there are a few extra milestones to consider.

Helping your children buy a home

Your children may now be of an age where they are leaving home and may even be ready to buy their own place. See how the bank of Mum and Dad can help them out.

Maximising your pension

Assuming you’ll retire around 65 or later, it’s time to start planning the retirement you want. Now is your last good opportunity to check your retirement income and see if it will be enough. There are several ways you can boost your pension pot in these crucial final years.

Accessing your pension

From the age of 55 you can also start drawing your pension – though you shouldn’t do this unless a financial adviser has assured you it will last you through retirement.

Updating your will

Being still healthy and fit is no reason to have an out-of-date will. Writing your will is vital at any age – so get it done.

Seniority: 66+

This stage of life usually means retirement – but it doesn’t have to. Since you no longer depend on work for your income, you have more freedom than ever before. Enjoy!

Accessing your pension

This is a popular time to start drawing your pension. There are several ways you can do this, so talk to a financial adviser about the risks and benefits of each. What’s more, you will soon reach the age at which you can take your State Pension – so factor this into your calculations.

Retirement (or not!)

Retirement could be up to a third of your life, so you won’t just be putting your feet up. You might consider retiring abroad, or taking the opportunity to travel and explore. Equally you may decide to retire gradually, working part-time for a while (perhaps in a new field) or even start your own business in retirement.

Downsizing

In retirement you may want to move to a smaller property – both to making life simpler, save time on housework and free up money for more exciting things. Find out about the pros and cons of downsizing.

Equity release

Another way to free up money from your home – without having to move house – is equity release. This can provide much-needed income in retirement, but there are downsides too, so talk to a financial adviser before contacting any providers.

Inheritance planning

If you have a lot of assets, then your loved ones may have to pay inheritance tax (IHT) on your death. Find out how to reduce IHT or even eliminate it altogether with some advance planning.

Later life

Retirement has many stages, and in your later years you may not be so active. Our guide to later life planning shows you how to manage the challenges of this life stage and enjoy it to the full.

Now you know how to plan your life – so get out there and live it!