Most financial advice you read can be applied to anyone regardless of age, but it’s typically up to you to prioritize that advice. For example, someone in their 20s may want to learn more about retirement planning, but it’s probably more beneficial for them to focus on establishing savings.
To help you know what you should focus on, this post will cover financial pitfalls, goals and savings for different ages.
20s: Getting a job after school isn’t always easy, so your bank account may be pretty low. Unfortunately, many 20-somethings turn to credit cards to maintain the lifestyle they want, but credit cards should be treated as a last resort.
Keep a budget and live frugally until finances are more secure.
30s: Are you ready for upcoming milestones such as purchasing a home or having a baby? Put a good chunk of your income into savings for these life events – you may need them soon!
40s: How’s your home equity? By now, you should have a decent amount in your home. If not, you may want to look into ways you can refinance for lower rates or allocate more money to your mortgage every month.
50s+: Do you have a retirement plan? It’s never too early to start, but if you want to retire within the next 10 years, you need to take a serious look at where you’re at now.
20s: Building your credit is essential for your financial independence. If you have no credit, look into things like:
- Secured loans
- Having your parents co-sign a loan for you
- Applying for a store credit card
As long as you make payments on time, you can start creating a stellar credit history.
30s: Saving money for your children should be your #1 priority. Get a college fund going right away; even a small contribution each week will make a huge difference in 18 years. If you don’t have children, you should focus on getting rid of all non-mortgage debt.
40s: If you haven’t already, it’s time to start looking into life insurance policies. This will help protect your family should anything happen.
50s+: Now’s the time to increase your retirement contributions. Once you hit your 60s, you should also start planning your estate and selling any unneeded assets. De-clutter now so you can relax later!
20s: Aim to save about 15-25% of your income, but debt repayment can count towards this percentage.
30s through 50s: If you have children, it’s going to be hard to save in general. Make sure you’re contributing enough to your 401(k) to get the full employer match and avoid additional loans.
60s: Save 24-35% of your income for retirement.
These are suggestions, so do whatever is manageable and makes sense for your lifestyle.