Top Tips for Financial Success No Matter Your Age
With different stages in your life, diverse achievements and challenges await. But no matter what your age, being money-smart is always a wise choice. Curious how to meet your financial goals, no matter your age? Take a look at these tips.
In your 20s, life is changing fast – some people are in school, others are getting married, while some are starting careers. But the best thing to do at this age? Cultivate good money habits and get prepared.
Control and build:
Good money habits start with controlled spending. It’s a great time to start tracking purchases to see where your money is going – and how you can spend more wisely. Reducing impulse buys, expensive take-out meals, coffee runs, and shopping sprees may be easier to do if you see how much those habits could cost you in the long run.
This is also a great time to start building credit – the better your score, the lower interest rate you’ll receive on loans, car purchases, even your rent! Landlords frequently include a credit check before letting you move in. No credit yet? A secured credit card is a great way to start. And if you have credit cards, keeping their balances low and paying on time is crucial.
Save for now – and for later:
It may seem challenging to put money aside into savings at this point in your life, but it’s the best time to start. To start an emergency fund (usually three to six months’ worth of living expenses), have a part of your paycheck directly deposited into a savings account. It’s simpler, and when you don’t see it, it’s easier not to touch it.
Right now is also the perfect time to start saving for retirement – even though it seems a long time away. Through the magic of compound interest, you’ll be earning interest on the money you deposit, and the interest from that, infinitely. Also, if you work for a company that offers a 401(k) match (which means they’ll match your contributions to a certain point), max it out – it’s free money!
Nusenda Credit Union has a great series of tools to help you through your 20s – try our savings, college cost, and cash flow calculators.
If you follow the tips above, you’ll be ahead of the game when you’re in your 30s. And at this time, through mistakes and experiences, you’ll become more mature when it comes to money.
Milestones and money mismatches:
Many people in this age group are thinking of marriage, children, or purchasing a home. Most have an established career where higher credit scores can lure even the best savers into debt. People in your life – spouses, and children for example – all have different philosophies about money. This is the time to gather those in your life to set money goals that work – and are fair – for everyone.
Also remember that keeping up with your friends’ and neighbors’ assets is a step in the wrong direction. Stay true to yourself and to your budget – and remember the old saying, “the grass is not always greener on the other side.”
If you’ve been contributing to a company-sponsored 401(k), you’re starting to see how early investments pay handsomely, thanks to compound interest. Keep up the good work – if you’re making more money than before, consider upping your contributions, or start a 529 account specifically for your children’s educational costs.
To successfully maneuver through your 30s, try our auto, credit card, and mortgage calculators.
In your 40s, what’s happening around you – and your finances – could get interesting. It’s the time when you are appreciative if you’ve been smart with your savings strategies; but there is still time if you need to get back on track.
About half of marriages end in divorce, loved ones get older, and it’s about that time when kids are starting to talk about life after high school. Money habits, whether good or bad, are coming to fruition. Now would be a great time to take inventory of your finances – assets, investments, and debts so that you can ensure your financial independence.
Remember that it’s not too late to pull yourself out of debt, even if it seems overwhelming in your 40s. Technically, you’ve still got 20 – 30 years of working life ahead of you, so work on paying off those credit cards and start a savings account, even if you can only deposit small amounts of money at a time.
Kick Retirement into High Gear, and Cover Yourself:
Your 40s are the ideal time to start focusing on yourself and your financial future. Ensure that you are contributing the maximum to your company’s 401(k) or retirement plan. Talk to your children about reasonable amounts of student loans to borrow and affordable colleges, if they plan to attend. Also, be sure your life insurance policies financially match what your family’s needs would be if the unpredictable occurred; and update your medical and financial powers of attorney, and wills/trusts.
Our financial calculators can help with situations you may face in your 40s – try these cash flow, insurance, investment and retirement tools.
Those in their 50s are often called the “Sandwich Generation” – many in this age group are both raising children, and acting as caretaker for elderly parents. But this decade is also the most crucial in terms of financial stability.
Talk to Experts About Retirement Strategy and Play Catch Up:
As you get closer to retirement, many money questions come into play. Should I roll over my 401(k)? Where should I invest my money to keep it growing? Should I start taking out withdrawals from my retirement? This is the time to add financial pros to your lineup – they can set you up with the best plan for your unique financial future.
These peak earning years can also help you overcome what may have been a less-than-stellar savings history. For example, current IRS rules allow those 50 and older to put extra money into workplace retirement plans and IRAs.
Keep the End Game Top of Mind:
There may be financial assistance packages and scholarships for students, but remember that there’s no equivalent for funding your retirement. In short, it’s essential to keep your nest egg as secure and untouched as possible so you’ll be ready for your golden years. That means young people in your life may need to work part-time, apply for financial aid, or seek out more affordable education options, such as community or local colleges. Also, there are smart ways to support your adult children who may be staying at home while in school or looking for a job. They can contribute by paying rent and assisting with household responsibilities.
Nusenda’s retirement calculator can make sure you’re on the right track; plus we hold a series of complimentary online and in-person workshops on topics important to you, like mortgages, retirement income, and credit reports. Sign up today.
Whether you are just getting started with your first breeze checking account, or you have lots of life experience, Nusenda is here to help you on your financial journey. Stop by a branch, or contact us to make an appointment today.