How to Be Your Financial Best at All Stages of Life

Tuesday, December 5, 2017

Family high fiving.

It doesn't matter what age you are, there's always something you can do to stay financially healthy. Here are some guidelines to get you started. 

Teenage Years

The teenage years are when most people are starting their first jobs. Start good habits: Earning a paycheck feels pretty good. It seems like you have limitless possibilities for going out, buying new clothes, and generally have fun. But now is the time to start building good financial habits that you can take with you for the rest of your life. 

Learn How to Budget

As a teenager, you don't have a ton of expenses, which makes this the perfect time to start learning the fundamentals of budgeting. Feel free to ask us any questions you have when you open your youth account. We can also help you find some great resources to help you learn about your finances

Save Your Money

Did you know that about 34 percent of Americans have no savings? The good news is you can get started with good habits. Try putting about 20 percent of your paycheck in your savings account or the college fund your parents set up for you. When you graduate debt free, you're able to take that awesome spring break trip, or buy a new car after you graduate. You'll be happy you did. 

20's

Even if you got a late start in your 20's, that's still okay. These are the years where you're slowly building up more financial responsibility, but you're also slowly building up your income. This is the decade where you'll go from a struggling student, to having a full-time job, to getting a promotion. It's an exciting time! 

Build Credit Responsibly

You'll probably get your first credit card in your 20s. It'll come with some big benefits and some big responsibilities. Credit cards get a lot of young people in trouble by allowing them to spend more than they have. This is where the budgeting skills you learned as a teen can come in. And if you didn't learn, then there's no time like the present! Be sure you're able to pay your balance off every month and that you're keeping careful track of what you're spending. Remember, if you don't think you can handle using credit a credit card, then don't! 

Start Saving for Retirement

When it comes to saving for retirement, time is your best friend. If you can't contribute to your company's 401(k) yet, try opening an IRA. This will help you start saving for retirement until you can contribute to your company's program. As you start to make more money, you can contribute to both your company plan and your IRA, which will increase the overall amount you're saving. 

Build an Emergency Fund

It's easy to feel like you don't have enough money to be saving a lot in your 20s. And it's easy to put an emergency fund on the back burner because you're young and healthy. But emergencies do happen, so it's best to have the money set aside to protect yourself if it happens to you. Your emergency fund should cover at least three to six months of living expenses. That would include things like your rent or mortgage, utilities, any debt payments you have, and money for food. You can set up a separate savings account just for your emergency fund so you don't accidentally spend it. 

30's

You're out of your 20's and your career is on a fast track. 

Pay Off Student Loans 

You've been living with student loans for about a decade. Now's the time to really focus on paying those loans off so you can focus that money elsewhere. 

Max Out Your Retirement Investments

The goal is to put the maximum allowed toward your retirement. If that's not feasible for you right now, put the maximum you're able to. If you changed jobs a lot in your 20s, now's a good time to make sure you have ownership of all those old company 401(k) contributions. If you haven't already, contact your old job and ask for help rolling your vested contributions over into an account you manage. 

Buy the Right Home

Most people start thinking about buying a home in their early 30s. Now's the time to be sure you don't overextend yourself when you buy a home. Think carefully about how much space you need and how much you can afford to spend each month on a mortgage. You can also consider a buying a foreclosure, which may get you a bigger home for less money. 

40's

You're likely more financially stable in your 40's than you were in any other decade. Enjoy this time! 

Keep Up the Good Work

You're doing great! Make sure you maintain all your good habits like saving, budgeting, and thinking about retirement. 

Get Serious about Saving for Your Children's College

If you have kids, now's the time to start thinking more seriously about their future and what your financial role is. For many, that means increasing college savings contributions. If you have questions, you can always schedule a financial counseling session

50's

You're coming to the end of your career and you can tell all those good habits you developed while you were young are starting to pay off. 

Make a Plan for Retirement Income 

You've almost made it to retirement! Now's the time to start thinking about how much you have saved, whether or not you need to make catch up contributions, and how you'll spend your money once you retire. 

Retirement

You did it! Welcome to the golden years. With a little planning, you can make these some of the most enjoyable yet. 

Create a New Budget

Now that you're in a new stage of life, you need a new budget. Take some time to understand your social security benefits and your minimum required withdrawals from your retirement accounts. You can use this number to decide if you need to withdrawal more than the minimum each month and how you'll use that money to pay for all your expenses. 

Think about where you're going to get your healthcare coverage and how you're going to pay for it. 

Consider Downsizing

Now that you're an empty nester, chances are you have more space than you need. Retirement is the perfect time to consider downsizing to a smaller home. Not only will you save money on your mortgage if you still have one, you'll also save on other expenses like heating and cooling bills.

So, what are you waiting for? Be your financial best today!