Money Read Time: 10 min

Planning, Saving, and Spending Over a Lifetime

Trying to save over a lifetime can sometimes feel a bit like a tug-of-war between the present and the future. You have immediate needs now. But, you have long-term goals, too. The challenge is to find a healthy balance. The good news is, it is possible to save, plan, and spend in a way that positions you to provide for a lifetime of needs.

Spending might sound rather more exciting than saving, but it's all about perspective. Don’t think of a savings account just as an "in case of emergency" wallet. Instead, think of it in terms of the opportunities it represents. Setting aside money each month can feel much easier when you focus on saving for the things you’re excited about. When you systematically save over the course of your lifetime, you’re creating future opportunities for yourself and your family that might not otherwise be possible—at least, not without debt.

Three Strategies to Help Make It Happen

Careful planning, proactive saving and strategic spending form a three-pronged strategy that can help you save for a lifetime.

While it can be tempting to start with spending, planning is paramount and should be your first step, as it sets the stage for saving and spending.

Planning Your Finances
The only sure way to gain control over your spending and saving is by planning. Planning requires intentionality, proactivity and agency on your part. It means figuring out your finances for the immediate, while also setting goals and making preparations for all the major life events you’ll face in the future. This is where the help of a financial professional is especially key, as they can help you prioritize your immediate and long term goals—and deploy strategies to help you pursue them.

Saving Money
The second strategy is all about saving money—and also investing. Perhaps you already set money aside each month. This is an important first step. When you dig into this strategy, however, you’ll begin to see a need to save and invest for various purposes. You’ll likely identify both short-term and long-term goals, ranging from holiday shopping, to an emergency fund, to retirement, and more.

Working with a financial professional to form a strategy for your savings and investments can help you get your money to work for you over time, and they can help you find a balance between short-term and long-term goals.

Controlling Your Spending
Perhaps your first inclination concerning money is to spend it on the goods and services your family needs and wants. Without planning, many people end up spending money as a reaction to circumstances and pressures. But with planning, spending becomes an intentional, strategic action toward your goals. Planning can also take the stress out of spending because, if you stick to that plan, you can spend with confidence.

Practices to Help You Spend and Save Intentionally

When you plan how you will save and spend for major life events, there are three specific practices you can employ to help you pursue the goals you set. These practices are typically relevant to any age and stage of life.

Mapping Your Income
First, you need to identify your income streams. You may have different income streams beyond your salary or retirement benefits, such as income from investments or other assets, income from RMDs (required minimum distributions), or even side hustles. The key is to know your income streams so you know what you have to work with.

Setting Your Budget
The second practice is all about budgeting—an essential component of planning. As you work out your income and expenses, be sure to include saving in your budget, although your savings goals will vary over time. If you’re new to budgeting, something like the 50/30/20 budget rule could be a good guide to get you started.1

Identifying Your Risks
Another key practice is to identify critical costs and risks. These will differ depending on your life stage and any major life events (expected or otherwise) that you may face in the future. Someone living in retirement, for instance, faces different risks than a young family that’s just starting out. Examples of risks are changes in cost of living, loss of job or income, and the need for long-term care.

You can leverage different insurance policies to mitigate risk. Insurance needs vary by life stage as well. An experienced, knowledgeable financial professional can help you assess your risks and secure appropriate coverage.

Navigating Major Life Events

Although this is not an exhaustive list, the following are some common major life events. All of these events necessitate an effective strategy around planning, saving, and spending in order to navigate them successfully.

Buying a House
Other than, perhaps a first car, buying a house is often the first major life event that requires long-term planning, intentional saving—and significant spending. Lenders are more likely to approve you for a mortgage loan with favorable terms if you have a regular income, a good debt-to-income ratio, and a good credit score.

In order to secure a best-scenario mortgage loan, you might have to save up for your down payment or take the time to improve your credit score. Depending on your financial situation, preparing to purchase a home can take years. The key is to plan ahead, setting goals and working steadily toward them to create the future you want.

Having a Child
Having a child can be one of the most joyous occasions of a lifetime. But it can also be one of the most expensive. The cost of raising a child in the US from birth to seventeen for the average middle-income family is approximately $310,600, excluding transport, recreational activities, and college.2 Child and dependent care tax credits can help offset these costs to some extent, but the arrival of a child makes strategic planning, spending, and saving all the more important.

Sending a Child to College
One of the biggest expenses many families face is higher education. One popular college savings vehicle is the 529 plan, which is a tax-advantaged college investment account. These funds can be used for education and other qualified expenses. Additionally, per legislation passed in January 2024, 529 plans now have greater flexibility as they can be rolled over into a Roth IRA.3 Whatever savings and investment vehicles you choose, you’ll need to plan for these contributions in your budget. A financial professional can help counsel you on how to balance saving and paying for your child’s college education without compromising your financial outlook for retirement.

Entering Retirement
Retirement is typically marked by a transition from living on an earned income to relying on a wealth drawdown strategy and other fixed sources of income. At this stage, you’ll likely see and enjoy, to a greater extent, the fruit of your long-term planning, saving, and mindful spending.

Making consistent contributions to your retirement savings and investment accounts from early on makes hitting your retirement goals much more probable. If you feel unsure about how much you’ll need, how much you should be saving, and if you’re on track, consult a financial professional who can help you work toward the retirement you want.

Estate Planning
Although many people associate estate planning with final life stages, it is important to make clear and comprehensive plans for the transfer of your estate at any life stage. Having an estate plan can reduce the administrative, financial, and tax burdens left on your loved ones and beneficiaries. Consider securing the services of an estate planning professional and legal counsel to help you develop an effective plan.

Enjoying Your Life Now and in Retirement

After decades of strategic planning, saving, and spending, retirement should present an opportunity to savor life and relish what you've achieved. Nonetheless, in order to form sustainable, healthy financial habits, it’s important to remember that you don't have to wait until retirement to enjoy the benefits of saving for a lifetime.

Saving at every stage and planning strategically can produce financial confidence and help create opportunities all throughout your life. Not only can you be better prepared to face emergencies, like car and home repairs or medical bills, but you’ll also be better positioned to pursue your goals and seize opportunities. When your child gets into their dream school, when your business partner has a new idea you want to invest in, or when you're ready to upgrade your vehicle for your growing family, then all your strategic planning, saving, and spending can pay off in the form of the opportunities you’ve afforded yourself.

Most importantly, when you can spend without worry because you’ve intentionally saved and prepared for major events, you can focus on, enjoy, and savor the good moments in life alongside the ones you love.

Contact the office if you’re ready to plan, save, and spend intentionally for a life you can enjoy. Let’s form a plan for whatever events and life stages you’ll face next.

1)Ryan, Kevin J. "What Is the 50/30/20 Rule?" The Wall Street Journal, Published Sept. 7, 2023. https://www.wsj.com/buyside/personal-finance/50-30-20-rule-budgeting-method-3d3ed0cf

2)Tim Parker. "How Much Does It Cost to Raise a Child in the U.S.?" Investopedia, Updated December 14, 2023. https://www.investopedia.com/articles/personal-finance/090415/cost-raising-child-america.asp

3)Brian Boswell. “How To Roll 529 Plan Assets Into A Roth IRA Account,” Forbes, March 4, 2024. https://www.forbes.com/sites/brianboswell/2024/03/04/how-to-roll-529-plan-assets-into-a-roth-ira-account/?sh=7fd2b82b6b62


This material was developed and prepared by a third party for use by your Registered Representative. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. The content is developed from sources believed to be providing accurate information.

For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera nor any of its representatives may give legal or tax advice.

Investors should consider the investment objectives, risks, charges and expenses associated with municipal fund securities before investing. This information is found in the issuer's official statement and should be read carefully before investing. Investors should also consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state’s 529 Plan. Any state-based benefit should be one of many appropriately weighted factors in making an investment decision. The investor should consult their financial or tax advisor before investment in any state's 529 Plan.

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