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Life Stages & Financial Planning

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Do You Know what Stage You Are At In Your Financial Life?

1) Formative & Young Adult Phase

2) Asset Accumulation Phase

3) Conservation/Protection Phase

4) Distribution/Gifting Phase

We realize that financial planning is often looked at as being a difficult process for some. However, the process is not as complex as you might think.

It is not uncommon for you to feel that you can’t reach many of your financial goals and objectives, however with a solid blueprint of how successful financial planning is done—you too can succeed in reaching your financial planning goals and objectives. 

By not putting together a solid financial plan to help you reach your and your family’s goal(s)—you may miss the opportunity to do the things in life that you and your family enjoy and miss the opportunity to pass on generational wealth.

By gaining a keen understanding of the life stages of financial planning and going to the financial improvement page and other pages on this siteyou can put yourself and your family in a winning financial position that can  put you in position to possibly reach all of the goals and objectives that you desire for yourself and your family during your lifetime.

Our goal is to give you the information that you need
in a format that you can understand so that you and your family can meet your monthly expenses and have discretionary income left over for additional savings, take that vacation that you and your family know you deserve—or attain any other goal that you and your family may have.

Below we will go over various potential or actual stages in your financial life to help you get a "conceptual understanding" of the process of financial planning so that you can attack your future goals with the courage that you need to achieve lasting success.

You can then put yourself in position to apply financial advice in a manner that will benefit you and your family the most!

1) Formative & Young Adult Stage

The Formative & Young Adult stage begins at birth and continues until your early twenties. It starts with the financial education that you get from family, friends and the larger environment that you grow up and live in.

In the formative and young adult phase you may have just begun working and you may not have a deep understanding about financial planning and goal setting or finance in generaland that may lead to some confusion for some.

Although the formative years are not cited by most economist and financial planners as a life cycle stage or phase—we believe that the formative years are often the most crucial.

It is the stage when you are open to learning good money management habits and establishing goals and objectives that are more attainable due to the longer time horizon for investing and savings in general.

If you were fortunate enough to have parents with high discretionary income and they were able to set up an investment & education funding plan after your birth or during your childhood years—you would have an advantage over those who did not have this benefit.

In addition, if you began working early as a teen and started contributing to a savings plan such as an IRA or other savings tool—you too would be in a better financial position than others at this same stage.

Also, if you were able to graduate from college and obtain a job early and stay with your parents for a year or two—you too could be in great financial position—assuming you had no student loan debt and you invested properly.

2) Asset Accumulation Stage

The asset accumulation stage begins in your early twenties and goes on up until about age 50. At this stage you would probably not have a lot of funds for investing, however you would have a high degree of debt relative to your net worth. 

However, if you frequent this site on a regular basis and you are now at the asset accumulation stage of your life—you can get to a point where you have a lot of funds for investing and you will have highly manageable debt that would put you in position for long-term success in a more efficient manner.

As you mature into your 30's and 40's your debt would decline and your net worth would increase as you would then start investing more in your retirement accounts and other investments.

3) Conservation/Protection Stage

The conservation/protection stage begins when you have acquired some assets—usually in your late 30's or 40's and may last up until you retire or scale back on working full-time.

At the conservation/protection stage in your life you would normally have an increase in cash flow, assets and net worth and a corresponding decrease in outstanding debt. At this point you would more than likely be concerned about maintaining all that you have acquired.

Your life expectancy, unemployment, disability, umbrella insurance and lack of an adequate retirement plan would now be more of a concern to you. If you did not properly establish a retirement savings plan during your formative years and/or your asset accumulation years—you would be particularly concerned at this stage. 

4) Distribution/Gifting Stage

The distribution/gifting stage usually occurs after age 50 when you realize (particularly if you have started early with your financial planning) that you can afford to spend on things—you never thought possible.

If you did your planning right or even partially right during your formative years, your asset accumulation years, and your conservation/protection years—you would possibly be in position to:

* purchase that car for your child

* pay for your grandchild’s private school tuition

* take that expensive vacation that you always wanted

You could also possibly pursue any other desires that you always avoided due to finances and time constraints. Those desires would now possibly be attainable in this stage.

If you really did your planning right—you could still be acquiring assets (asset accumulation stage), conserving and protecting your assets (conservation/protection stage), and distributing gifts—during the distribution/gifting stage.

If you did your financial planning right this stage (distribution/gifting) could actually begin in your forties and continue for the rest of your life.

At this point (distribution/gifting stage) your finances would be in order and you would want to enjoy the rest of your life as you would begin to really see the clock ticking at this stage.

At the distribution/gifting stage you would feel that your finances were in balance and you could see your money outlasting your life expectancy. 

Closing Thoughts on Life Stages & Financial Planning

Remember that it is not uncommon for you to be in different life stages at the same time but at varying degrees in each stage.

Always keep in mind that the best time for you to obtain financial education is "prior to" the time that you will actually have to make a decision! 

By doing so you put yourself and your family in control—which decreases the likelihood that you could be manipulated or otherwise dealt with unfairly.

In other words, you want to make the financial decision that is best for you and your family—not what's best for the salesperson—or the company that they represent.

Now that you have a conceptual understanding of the Life Stages or Phases of Financial Planning—let’s go to the Finance Improvement Page to see if there are things that you can do now to improve your financial position!

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About This Article:


The above article was written by Thomas (TJ) UnderwoodThomas (TJ) Underwood is a former fee-only financial planner, a former top producing loan processor and is currently a licensed real estate broker in the state of Georgia. 

He is the writer behind The Real Estate & Finance 360 Degrees Series of Books that include The Wealth Increaser, Home Buyer 411 The Smart Guide to Buying Your Home, Home Seller 411 The Smart Guide to Selling Your Home, and  Managing & Improving Your Credit & Finances for this MILLENNIUM.

In addition he is also the writer who created The 3 Step Structured Approach to Managing Your Finances, and CREDIT & FINANCE IMPROVEMENT MADE EASY—NEW GUIDE that you can download right now "(at MIMIMAL cost $3.95)" to learn more about his writing style and how you can achieve "more" success in the current economy.

He is the creator of where he regularly blogs about helping consumers improve their credit, finance and real estate pursuits in an intelligent, consistent and proactive manner. 

He’s always looking for ways to make intelligent finance improvement happen for those who “sincerely desire” success in their future. He was the first financial planner to coin the phrase "financially alert mind"  and he consistently writes in a style that is designed to provide consumers the ability to take control of their lives and achieve great results.

You can contact him from a number of sources but the most direct way is to contact him through the contact us block that can be found at the bottom of this page.  You can also get highly relevant tips on "living your life more abundantly" and link to and possibly earn revenue by logging on to

He is also an IRS registered tax planning professional with over 30 years of tax experience and can be reached at:



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