Financial planning

is often presented as a decade-by-decade checklist: save in your 20s, buy a house in your 30s, hit peak earnings in your 40s and 50s and retire in your 60s. But life trajectories have become less predictable.

Some Canadians retire in their 40s, while others start new careers in their 50s. Children are staying at home longer, families are forming later and careers are less linear than ever.

The real question is how we can prepare for the significant milestones in their lives, from earning our first paycheque to achieving

financial independence

.

Build good habits early

The first major milestone occurs when young adults begin earning their own income and are no longer financially dependent on their parents. At this stage, building good habits should be the primary focus to set a solid foundation for the rest of their lives.

Too often, younger individuals believe they can spend now and save later, expecting their future selves to catch up. But habits don’t automatically change with age. Good savers tend to remain disciplined, while poor saving patterns often persist unless deliberately addressed.

There are easy ways to start developing good habits, such as setting up automatic savings contributions and following the 50/30/20 rule. This involves putting 50 per cent of your income towards your needs, 30 per cent towards wants and 20 per cent towards

savings

.

Small, consistent contributions add up over time because of the power of compounding. For example, a $100 dinner at age 25 could be worth $1,600 by age 65, assuming an annual compounded return of roughly seven per cent per year.

Protecting those savings with a margin of safety is also a good habit to develop. Maintaining a buffer or emergency fund helps prevent short-term setbacks, such as a job loss or unexpected expenses, from derailing long-term plans.

The earlier you start building healthy habits, the greater the likelihood you will keep them and avoid bad habits in the future, though it’s never too late to start. The dollar amount you save isn’t as important as the mindset you build that will last you a lifetime.

Know who you’re partnering with

We all know that choosing a partner is one of the most significant decisions you can make, but not enough consideration is given to financial compatibility.

Financially, couples generally fall into three combinations: Saver + Saver, which tends to be the most stable; Spender + Spender, which may seem harmonious at first, but risks mounting debt and stress; and Saver + Spender, which tends to be the most contentious due to differing viewpoints on money management.

Regardless of the combination, communication is crucial. Having open conversations about goals, values and money habits is more important than the amount of money you both make, as it helps you align with your partner.

The partnering life stage also involves major financial decisions, such as buying a home. To avoid unnecessary financial strain, it helps to test drive big decisions.

For example, before upgrading to a larger home, couples can simulate the higher mortgage and expense payments for six months to see if the trade-offs are manageable.

Managing the sandwich years

Many individuals will eventually experience what are known as the “sandwich years,” a time when they may be supporting children, saving for their future and helping aging parents all at once. With numerous competing priorities, some may feel behind on their financial goals.

For some, reviewing lifestyle expenses and making modest adjustments to trim discretionary expenses may be enough. But in other cases, more drastic changes, such as downsizing a home, restructuring debt or changing lifestyle habits, may be necessary.

The key is to be honest about where you stand. The longer that hard choices are delayed, the harder they become to act on. It is never easy to make these decisions alone, and working with an adviser can help identify the best solutions, keep you accountable and adjust strategies as circumstances change.

Financial independence

Developing a comprehensive wealth plan is essential on the path to financial independence. As the goal draws nearer, tightening assumptions and stress-testing the plan become even more critical.

What if markets fall 20 per cent? What if a spouse stops working early? Running these scenarios can reveal gaps that need to be closed.

It is also the time to revisit risk. Holding a high-risk portfolio might feel fine while markets are rising and you’re still working, but it can be devastating if a correction hits just as you need withdrawals.

Building a margin of safety at this stage means holding cash reserves, diversifying investments and reducing exposure to downturns.

Financial independence is not just about what you’re walking away from; it’s about what you are walking toward. True success requires more than money; it demands a clear vision for how you will invest your time and energy once paid work becomes optional.

  • How can I reduce taxes on my estate so my children inherit more?
  • Do we need to take out a reverse mortgage to ensure our money outlasts us?

Once someone achieves financial independence, incorporating a cash wedge into the portfolio can prevent forced selling during downturns, thereby strengthening overall financial resilience and protecting capital.

Working with an adviser can provide the guidance and discipline needed to put these habits into practice, but, ultimately, building the right habits and maintaining a margin of safety are essential at every stage of life.

Lynn MacNeil is a senior wealth adviser and portfolio manager at Richardson Wealth Ltd.