Financial advice rarely holds true throughout a person’s lifetime as there are different goals for each age group. Some want to buy their first home while others want to make sure they have saved enough to retire early. Others simply want to build wealth that they can pass down to their children. Every goal has a different strategy to help reach the goal depending on the person and a variety of other factors. Generally a person’s fiscal strategy becomes a bit more conservative as they age as they do not want to have to work beyond their planned retirement age. The following are tips for each age group that can improve your finances immensely.
20’s and 30’s
Many people think of their 20’s as survival mode but in fact a start to wealth can actually be accumulated. Those in their 20’s must not get behind on credit card bills as this debt can be crippling. Student debt should also be paid off ASAP so you can start saving without any debt. Those who received scholarships or had their parents pay for their college can now start saving for a home or putting money into their IRA. Buying a home is a much better investment than that of renting but too many people make the same mistake. Instead of a townhome or a smaller starter home people are putting themselves too far into debt. Paying off extra each month on a mortgage you can easily pay off in a matter of 5 to 10 years allows you to rent this out in the future if you choose to do so. Just because you can afford a home does not mean you should buy it especially if it is not a home you would consider staying in for decades. High risk stocks can be played with at these ages but make sure to invest in some stocks that consistently bring in a return. Even bonds or mutual funds can be bought with a small percentage of the money you are investing.
40’s and 50’s
Paying off homes and really beginning to save for retirement starts in your late 30’s to early 40’s. There is a hope that you contributed to your IRA and if there was employee match you will be in great shape. Investments should be moved into more conservative options as you do not want a crash of a certain industry to lose your nest egg for you. Seeking the advice of a financial advisor can be wise as well as they can help you figure out how much you need to save before you retire. Some people start to consider selling their home later in their 50’s as kids have moved and they do not need all of the extra space. This can allow them to invest in their future instead of putting money into a home way too large.
60’s and 70’s
You can start collecting social security checks during this time which puts many people on a fixed income. Budgeting is more important now than ever as you do not want to run out of money and have a home foreclosed upon or anything of that nature. All of your investments should be of a conservative nature at this point as most of the money you make yearly will go into your living costs. Some people have a hard time as they want to spend money like they are still working a full-time job.
80’s and 90’s
You have made it this far and with medical technology more people than ever will reach these ages. If you have invested and saved wisely you should be quite comfortable financially. You will continue to receive social security checks and it is time to look at end-of-life planning. This will allow you to distribute your estate as well as make arrangements for healthcare if you no longer can make the decisions on your own. Failure to do this could lead to that reckless nephew getting the estate so tie up any loose areas of your estate.
Each age range of life has different goals and strategies to get there. Take the time to write down your goals so you can begin taking steps to achieving them financially.
