As we approach the end of 2025, many of us are probably thinking about what we want to start, stop, or continue doing in the upcoming year. There are certain times in all our financial lives when the choices we make have a big effect on everything else that happens. Every stage has its opportunities, risks, and things that we can't see.
If you are working on your own financial resolutions for 2026, here is a short, simple framework for every life stage, based on my 30+ years in the financial advice world. I have learned from my experiences as well as those of many others that I’ve had the benefit of working with, both colleagues and clients.
Stage 1: Ages 18 to 30—Get the Big Levers Right
It may not seem like it at the time, but your finances are most affected by your 20s. Small choices made here add up over the course of 40 years. Big mistakes add up too.
Start investing early because time is more important than anything else.
The easiest and most reliable way to become financially independent is to start saving early, even if it's just a little bit. Compounding is a powerful, silent, and non-linear process.
For example, using the S&P 500’s long-term average annual total return of about 10.3% since 1926.
If you invest $1,000 a year from age 22 to 31 (10 years) and never add another dollar, your money could grow to around $410,000 by age 65.
If you wait until age 32 and then invest $1,000 a year until age 65 (34 years of saving), you end up with only about $260,000.
Same annual contribution, more years of saving—but starting 10 years later costs you roughly $150,000 in this example.
In the beginning, small amounts of money are more important than larger amounts later. Take advantage of your 401(k) match; it's free money that you don't have to pay back.
Your top priority should be to get any employer match. It is a sure thing. You can get it in both Roth and traditional forms. It often doubles your contribution right away. It depends on your tax bracket whether you should use Roth or pre-tax, but the most important thing is to take part.
Make a real emergency fund
Three to six months' worth of basic expenses is a sensible goal, but the right amount is "however much lets you sleep at night." This buffer keeps you safe from losing your job, having to pay for car repairs, getting sick, or moving to a better job.
Invest in a smart and aggressive way
For retirement savings over a long period of time, a stock allocation that is 100% globally diversified is often the best choice.
Keep costs down by using Exchange Traded Funds (ETFs) and index funds.
Don’t pay attention to headlines.
Avoid making decisions based on your feelings.
A target-date fund with the longest date is often a simple and smart choice.
Favor tax-free growth (Roth IRAs, Roth 401(k)s) when you are in lower tax brackets, e.g., < 24%.
Stay away from the big landmines in the early years of life
Some common mistakes can hurt you for a long time:
The credit card debt is increasing at an interest rate of 20% or more.
Cars and toys for lifestyle are expensive, lose value over time, and are often out of reach.
Day trading, options, and crypto speculation are all forms of gambling that look like investing.
Spending on subscriptions and "small leaks." Small spending that happens repeatedly will slowly eat away at your wealth, just as small investments can build it.
If you make these early decisions right, you’ll set yourself up to be financially secure later in life.
Stage 2: Ages 30 to 50—Dealing with Complexity Without Losing the Plot
This is when people usually get married, have kids, buy a house, make more money, and have to deal with many other things at the same time. The stakes get higher, and so do the chances of drifting off course.
Homeownership: an asset, a place to live, and a duty
A house isn't always an investment. Costs like maintenance, taxes, insurance, and transaction fees are important.
Over time, you should expect to spend 1–3% of the value of your home on maintenance each year.
If you buy with a minimal down payment and sell within a few years, the costs of the sale may take away all your equity.
Renting is not "throwing money away." If you need to be flexible, it can be a smart choice.
Use the full power of 18 years with 529 plans for education savings
A 529 plan grows tax-free for qualified education expenses, and you can change beneficiaries within a wide range of "family" definitions.
As soon as your child gets a Social Security Number, open one and start putting money into it right away. Age-based portfolios invest more aggressively when they are young, gradually moving into more conservative investments as the beneficiary approaches college age.
There are three tax-free buckets, not two.
In addition to Roth accounts and 529s, Health Savings Accounts (HSAs) are the third powerful tool for those who use a high-deductible health plan (HDHP).
Going in, it's tax-deductible, potentially even pre-FICA. Then, the growth is not taxed if withdrawals are used for healthcare. Because you aren’t required to spend the funds in the same year the expenses are incurred, you potentially can allow your HSA to compound “triple tax free” for decades. Just remember to save all those health care receipts!
Insurance: keep it simple and protect it.
The biggest risk you face during your working years is a disability event that will interrupt your income. A good rule of thumb is to have ~70% of your income protected by a long-term disability policy.
For most families with kids, term life insurance is the best option for life insurance because it has a lot of coverage, is cheap, and doesn't have any “tricks” built into it that add expense.
In general, coverage should let a surviving spouse:
Pay off the loans (mortgage, vehicle, etc.)
Pay for kids' school
Stay stable for enough time to recover emotionally and practically
A full financial plan will help inform you what the right number is.
If you have teenage drivers, a pool, dogs, or a lot of valuable things, you also need liability insurance. In addition to your homeowners and vehicle policies, it may make sense to purchase an umbrella policy. It doesn't cost much and keeps you safe from the unknown.
Marriage and money: being on the same page is better than being perfect.
One of the main reasons people get divorced is because of money problems. You don't have to have the same money personality, but you do need:
Shared money goals
Talk to each other openly
A way for both of you to keep track of your money and budget
When you both have a clear understanding of your financial situation, it will provide a solid foundation for navigating any challenges life may present.
The biggest issue I faced personally and see frequently with clients in this life stage is lifestyle creep.
The years when you make the most money can also be years when you spend the most. If every pay raise means a better way of life, it will be harder to save for retirement and cost more. Be purposeful about:
Housing
Vehicles
Travel
Costs for kids
Toys, subscriptions, and things you must do over and over again
Tip: Experiences usually make people happier for a longer time than things do.
Stage 3: Ages 50 to 65—Getting Ready for the Change
This is where retirement comes into play for most folks. It is during this stage that most realize that market volatility is not your biggest risk; now it's behavioral, emotional, and organizational.
If you haven’t already done so, now is the time to make sure your finances are really in order. This means:
A real, written financial plan for your money.
Current wills, powers of attorney, and health care instructions.
A clear picture of what you really spend.
Working with your spouse to set goals, face reality, and make assumptions.
People tend to think they spend less than they do. Get a handle on what you are spending so that you can plan accordingly. Additionally, plan for your aging parents before a crisis. This is a stage that not many families get ready for, and almost all are surprised by it:
Dementia and a decline in mental ability.
Living with help and memory care.
Accounts that are frozen and passwords that can't be accessed.
Changing IDs, beneficiaries, and titles.
Finding marriage licenses, deeds, and wills.
If you wait until "something happens," these things become a lot harder. Talk early. Make accounts easier. Put all the papers together. And make sure that someone can get to important information.
Don't just stop working, ease into retirement.
A job can shape who you are, what you want to do, and how you connect with others. Going from 100% to 0% work can make you feel like you're going crazy.
A business owner may step down responsibilities gradually instead of all at once.
Moving from full-time to part-time work can help make the transition smoother.
Volunteering can help fill the void that work once occupied.
Staying involved in something that matters and gives you purpose can greatly help fill the time that many retirees suddenly find themselves overwhelmed by.
Emotionally, retirees must deal with decumulation. It's nice to save and grow your wealth. It can be a major challenge to switch from accumulation to withdrawal, even if your plan is solid. Strategies to employ sooner than later:
Set up Roth, traditional retirement, and taxable accounts to work together.
Carefully time your withdrawals and conversions to lower your taxes. Many successful retirement account savers find themselves forced to pay higher taxes than they would have when they originally deferred income once Required Minimum Distributions (RMDs) begin.
Think carefully about when to apply for Social Security.
This is a place where professional planning really makes a difference.
Stage 4: After 65: Legacy, Purpose, and Stewardship
When retirement is secure, the question shifts from "Do we have enough?" to "What should we do with it?" Giving generally makes people happier than spending. Research after research shows:
It's more important to help adult children when they need it than to leave them a lump sum at age 60+ when they are likely to inherit it.
Real help during their high-stress years (mortgages, childcare, college savings) makes a difference.
Giving to charity, whether it's time or money, makes you happier than buying more things.
Donor-advised funds (DAFs) make it easier to give over time.
You can do the following with DAFs:
Give and get a tax break today.
Put the money away tax-free for future gifts.
Get kids and grandkids involved in giving to charity as a family.
Plan your charitable giving in line with Roth conversions or other tax planning.
DAFs are one of the most adaptable tools for making a giving plan that works for many generations.
Talk to your family openly before you have to make decisions for them.
The hardest talks are usually the ones that need to happen the most:
Healthcare directives (like "pull the plug?" situations).
Wishes for long-term care.
How assets will be passed on.
Who makes decisions if cognitive decline occurs.
There is no playbook. But waiting increases the likelihood of chaos.
Final Thoughts
Every stage of life has a handful of money decisions that matter far more than the rest. No stage is “more important” than another; each one builds on the last, and each one sets the stage for the next.
Across all stages, three themes show up repeatedly:
Start early—and stay consistent.
Use planning and structure to remove emotion and improve outcomes.
Focus on the people you love. Money used well is ultimately about relationships, not possessions.
Whether you’re just starting out, hitting your peak earning years, approaching retirement, or thinking about the legacy you’ll leave behind, the right planning and the right priorities can turn financial decision-making from a source of stress into a source of confidence.
If you want help with any of these at any stage, get in touch to build or review your plan.