Financial Goals-One Decade at a Time

It can be easy to overspend on everyday expenses if you haven’t made any financial plans for yourself. Debt has a way of creeping into all of our budgets causing us to feel like we’ll never have enough money to keep up with expenses. Planning can help—set both short-term and long-term financial goals to get on the path to financial security.

Budgeting and financial goals are not “set it and forget it” objectives. Life happens, things change. You need to constantly track, assess, adjust and refocus. Sounds like a lot? Maybe. That’s why we’re here to break it down for you by decade. Learn what may be coming your way in each life stage.

20’s—Explore
Your 20’s are all about learning. It’s a time to become financially independent and try out some different budgeting options. Although you can afford to make a few mistakes in your 20s, learning how to be financially responsible will benefit you for the rest of your life. Here are a few tips on setting financial goals in early adulthood:

• Be a saver, not a spender. This doesn’t mean you can’t ever spend. But training yourself to think saving first will serve you well. Your future self will thank the 20-year-old you for this one.




• Open an emergency fund. This should be a separate savings account. Make your goal three to six months’ worth of expenses to use in cases of job loss or an unexpected medical expense, for example.




• Stay on top of your credit score. Getting your first credit card can be exciting but remember that whatever you charge on this magic card must be paid back.




• Pay student loans and credit card debt. You may need to adjust some of your spending habits but now is the time to decrease or eliminate debt. Make payments on time to avoid lowering your credit score.




• Start saving for retirement. Does your employer offer a 401(k)? If so, start contributing now. If not, open your own Traditional or Roth IRA. This is the easiest way to begin saving for your future.




• Get a health insurance plan. Check with your employer to see if they offer one. Be sure you understand the different plan options available.

30’s—Build Your 30’s come with more financial experience (you’re no longer a beginner!) and it’s time to build your finances and your future. By this time, you may have a family, own a car—or even a home—and you’re probably starting to look at your retirement more closely.

An appropriate goal in your early 30s would be to have about one year’s salary saved for retirement. Another would be to have all your non–mortgage debt paid off. If you decide to start a family, it’s a good idea to start a savings account for your child’s college tuition. This is also the time to get life insurance and take steps to finalize your living will.

40’s—Strengthen
By now, you’re entering another phase of life. Focus on strengthening the foundation you have built. Now is the time to review your investments, savings and financial goals to make necessary adjustments.

Check in with your financial professional to ensure you’re where you want to be. Ideally, you should be nearing three times your annual salary in retirement savings. Try an online calculator to see if you’re on the right track.

If you’ve decided to help your kids pay for college, continue making contributions to their accounts. This is also a good time to start having conversations about your wishes for your later years. Assign beneficiaries to your estate, establish a power of attorney and finalize your will.

50’s—Recuperate and Adjust
Many people take a hard hit in their 40s—it’s expensive to raise a family! That’s why your 50s are all about recuperating and adjusting. Take the time to assess your retirement savings—again. By this point, you should have about five times your annual salary saved. Start thinking about how you want to spend your retirement years. Here are some things to put on your to-do list:

• Pay off your house.




• Look into long-term care.




• Make travel plans for that trip of a lifetime.




• Think about ways to capitalize on your income by doing something you enjoy.




• Review your insurance plan—make sure it provides adequate coverage for your lifestyle and stage of life.

60’s—Plan
By your 60’s, you’re in the home stretch, preparing to coast into retirement. Hopefully, you’ve been saving over the past four decades and you’re ready for it. But if you’re not quite there yet, it’s not too late. Start putting every spare penny into your retirement account.

Calculate your monthly expenses, put a post-retirement budget together and begin matching your spending to those levels.

Review your Social Security options. You can start claiming it at 62 (depending on your situation). Educate yourself on the options beforehand. Remember, the longer you wait to claim Social Security, the more money you’ll receive.

Having a life that’s financially stable is all about planning. Whether it’s marriage, kids, a home, retirement or planning for later life, it’s all important. The earlier you make a habit of setting goals, the better you’ll be. And, once you’ve established your goals, don’t forget to review and adjust them as needed.