Foundation Stage: Ages 18-30

Financial planning is typically based on the individual’s stage of life. The services and strategies used by someone starting out in their career may be vastly different to someone approaching retirement. Financial planners can use a framework of life stages to inform their service, but it’s important to treat clients as an individual and make recommendations based on their own life events and goals.

In early adulthood between the ages of 18 and 30, individuals are usually leaving education and entering the workforce. They may have finished college or university qualifications, or they may have graduated from apprenticeships. In any case, this is usually known as the foundation stage and the beginning of the wealth accumulation period.

Milestones within the foundation stage

During this stage, individuals are starting to earn amounts of money that they have never had access to before, and they are therefore starting to develop spending and savings habits that will be pivotal in their relationship with money in the future. Individuals are establishing their financial independence, but some of the other milestones within this period include:

• Starting a savings or emergency fund
• Paying off student debts they might have
• Beginning their investment journey
• Considering a private pension

Getting people within this age group to engage in financial planning can be more challenging than later age groups. This can be due to a wide variety of reasons, such as individuals spending more money due to fewer immediate financial responsibilities or even due to the economy and high costs of living. However, there can be significant benefits in starting financial planning at these early ages as it creates more time for pension pots and investments to grow.

The Growth in Young Entrepreneurs

There has been a meteoric rise in the number of younger people starting businesses or creating second streams of income from self-employment. Starting and operating businesses can create financial challenges for young people, such as securing business investment, managing business cash flow and even working out how to manage business growth. For these reasons, financial planning services in the younger age groups may now demand more entrepreneurial and business-focused strategies.

For further information on financial planning services for young adults, don’t hesitate to contact our team.