The following is a simple guide to money in your 20s, 30s and 40s.
Set goals and build a foundation.
No matter what age group you fall into, the following will be the three basic goals for building a financial foundation.
Top financial priorities for people in their 20s
- Eliminate credit card debt
- Establish and emergency fund
- Open (and contribute to) a retirement account
- Plan a budget and stick to it
Once you have started funding the above and feel confident with continuing to be disciplined about contributing to these goals, it’s time to plan for the future and as folks enter their thirties the following additional common goals usually come into focus.
Top financial priorities for people in their 30s
- Preparing to buy a house
- Paying off student loans
- Know your credit score
- Know your networth – This is the sum total of your assets (bank account balances,
- savings, investments, etc.) minus your debts (loans, mortgage, credit card debt, etc.)
- Insurance – life, disability, health benefits, etc
At this point you should begin increasing your retirement contributions to the max you can afford, but remember to stay within your budget.
Top financial priorities for people in their 40s
- Your will, health care proxy
- Parents finances – if you’re parents are still alive, you may need to begin thinking about their long term care as they age
- College tuition – if you have children it’s time to begin contributing to their college fund
- Define your retirement goals and adjust your contributions accordingly