William Shakespeare said “All the world’s a stage”. From the day a person is born till the day of their death, most of us go through various stages in life, during which we are expected to play a series of roles one after the another. Each role comes with its own set of responsibilities. Thus, each individual in life has to perform certain pre-defined duties towards themselves, their family and society for which they are held accountable as they progress in their life.

Most of us go through various life states with an expected role as listed below –

Life Stages Expected Role
Childhood We are a student or learner.
Young Adult We are just beginning to earn a livelihood and are single.
Young married We are just married to become a partner or spouse.
Married with young children We have become a parent and started a family.
Married with older children We are a provider who has to take care of education and other needs of children who are growing up.
Senior Adult Children are now independent and are moving forward in their lives.
Retirement stage When one enters into retirement years of life all we want a life of dignity without being dependent on others.

Similarly, an individual goes through three major phases during their financial life –

Phase Phase Expectations
Student During the student phase priority is developing one’s skillsets to build earning capability. It is a preparatory stage for taking up future responsibilities as a productive citizen.
Working During working phase, an individual begins working and soon starts earning more than what he consumes. He then begins to save and invest to builds assets which would provide funds for various needs in the future. This phase may last for 35 to 40 years.
Retirement During retirement phase, one may have stopped working. Living with independence and dignity is most important.

Why does one need to save?

Each individual needs to save to meet requirements associated with each role they perform during their lifetime. For example, When a person gets married and starts a family of his own, he may need to have his own house. As children grow older, funds are needed for their higher education and so on. Thus saving helps with required funding to meet the needs associated with each stage in life.

Savings is an outcome of two decisions.

i. Postponement of consumption: It is delaying current spending into future for later consumption.

ii. Parting with liquidity (or ready purchasing power) in exchange  for less liquid assets. For   instance,purchase of mutual fund which is less liquid. 

One needs to plan in order to save and then invest wisely to build assets which are appropriate for meeting various needs that will arise in future. Financial planning helps with both the decisions mentioned above. Since “financial planning is a process of identifying one’s life’s goals, translating these identified goals into financial goals and managing one’s finances in ways that will help one to achieve those goals.” 

Financial planning plays a crucial role in building a life with less worry. Careful financial planning can help set your priorities and work steadily to achieve your various goals. 

We will talk more about various needs of an individual, how these needs translate into financial goals and different types of financial products in part – II of this article. 


In this article, we have introduced you to various stages of individual’s life cycle, role of savings and financial planning. Hopefully this information should help you in building better understanding of financial planning process. For more information please feel free to reach out to us via email at – enquiry@taptoprosperity.com or by phone – 91-9515475381. 

Next Article – Financial Planning Part – II : An individual’s life cycle and financial planning.

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any entity prior to publication.

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