Personal Financial Planning at Every Age

Personal Financial Planning at Every Age

When it comes to financial planning, there’s no such thing as too late or too early as everyone at their age could start planning their finances. The way to manage it might not be the same for everyone, as not all of us are at the same financial stage in life. Let’s take a look at how you can plan your finances at different life stages.

The 20s (Building Foundation)

Investing at a young age is not as easy as you are just starting to build your life and career. But remember, even though it is not easy, that is the most important part of your future. The earlier you invest in your future, the more time you have to grow your personal wealth. You definitely wouldn’t want to stay eating instant noodles during your retirement days.

At this age, the first thing you should do is to start saving. Build an emergency fund and savings that are easily accessible for you to access during an emergency. You might still be searching for a decent or better-paying job, but that shouldn’t be a barrier for you to start saving. Start with 10% if that is what you can afford, and then increase it to 20% or even 30% as your earning improves. Alternatively, take on side-gigs and freelancing work to supplement your day job.

Next, once you have at least 3 to 6 months worth of savings, it’s time to start investing. Those in their 20s have the biggest advantage over everyone if they start investing by now. Invest in a growth-oriented fund such as equity funds or retirement schemes. You can now open a PRS or Private Retirement Scheme account for your retirement plan, especially if you’re self-employed and not covered under the EPF.

The 30s (Career Minded)

This stage of life is when more people are focusing on building their careers and achieving a stable life. But before that, there are few things you should consider for your future as being in your 30s. You are most likely to be earning more and could probably afford the finer things in life.

If you’re still not insured by your 20s, don’t delay longer. Protect your life and income by making sure you’re sufficiently covered. There are many types of insurance policies that you can choose from but the two most important investments you should be involved in are life insurance and disability insurance. Insurance is important not just for yourself, but for your family as well. If something were to happen to you today, your family will undoubtedly bear the consequences as a result.

As you are earning money now, start to invest in stocks or real estate and becoming a homeowner. Real estate investment is also an important investment you could make. You have more years ahead of you to benefit from the investment market before retirement. Experiencing a loss in investment when you’re young won’t affect you much as you still have more years to cover the losses.

The 40s (Retirement Minded)

As you grow older, you’ll find that there are more commitments to fulfill. It doesn’t stop there. This stage of life is where family responsibilities take centre stage. You are most likely to be making a decent living and have developed particular occupational expertise.

Now it’s time for you to allocate some education funds for your children. Education doesn’t come cheap. Now with the trend of sending children to international schools in Malaysia, it can cost couples up to five-figures a year, per child. And this does not include tertiary education yet. True enough, we can hope for the best and groom our children to be eligible enough for a scholarship, but they’re not guaranteed. What happens then if they fail to receive one?

This is also a good time to relook at your investment portfolio. Asset allocation is one of the important things you should do to create and balance your investment portfolio. That’s the best strategy you could do to balance the risks and rewards of your investment. Set up an appointment with a financial advisor if you’re unsure on how to manage your assets and wealth. Learn to use your wealth in improving your returns too. Find out how to take advantage of your stocks dividend in order to beat inflation.

Remember to never stop saving and investing. As you’re saving for your children’s education, saving and investing for your retirement should always be prioritized in your financial planning.

The 50s (Near Retirement)

Your expenditure will become less burdensome as the children grow up. This stage of life is where you are at the top of your career and are now looking forward to retirement.

At this stage, remain invested but lower your risk tolerance. As you’re approaching retirement, avoid situations where you could lose a huge amount of your wealth overnight. By now, you should have amassed a substantial amount for your retirement based on your decades worth of saving and investing.


The bottom line is, always be prepared no matter how old you are. No one can predict their future and that is why preparation is the key. Everyone wants to live a worry-free retirement. Planning your finances could save you from unwanted stress in your old age.

Saving and investing at an early age requires sacrifice and diligence. But always remember the sweetness of the end goal. The sacrifice you’ve made today would let you enjoy the fruits of tomorrow. You surely do not want to still be working in your retirement just to make ends meet.

Don’t delay! Start planning and take action for your future today.

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Personal Financial Planning at Every Age is written by Amalin Razali for

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