It’s never too early – or late – to become a better financial steward. The benefit of growing as a money manager throughout every stage of your life is that you have plenty of opportunities to take charge with each new transition.
Ideally, you picked up some solid money skills as a child or teen or at least entered your 20s with the basics in place. If not, take heart. You have the chance to not only catch up but also get ahead. And every decade provides the opportunity to steward your financial resources in Christ-like ways focused on what matters most.
In Your 20s:
If you don’t have one already, this is the time to build a solid financial foundation. Some tips from Dave Ramsey include:
- Get on the same page about money if you’re married or in a relationship heading toward marriage. The decision of “if,” “when” and “how” to combine finances is as unique as couples are themselves. You’ll want to discuss these topics together and come to agreement. And while you’re at it, check out the most-common money mistakes couples make – and how to avoid them.
- Avoid getting into debt and get out of debt quickly. This is a sure way toward financial security.
- Buy good medical insurance. Medical expenses are the top reason people go into bankruptcy.
In Your 30s:
As you are raising your family and making plans for your future, take these savings steps:
- Build up your emergency savings. Life is going to throw you curveballs. You can’t avoid them, but you can be prepared by having several months’ worth of living expenses in a Savings account.
- Save for retirement. Think of it this way: $1 saved in your 20s may be worth $16 during retirement, whereas that same dollar saved in your 30s may only be worth $9 during retirement. In your 30s, consider allocating at least 10 percent of your gross income toward retirement investments.
- Save for a home. Especially if you have children or plan to start a family soon, your mind may be on buying a home or upgrading to a larger one. It’s tempting – but may not be worth it until you make a significant down payment. At least 20 percent is advised.
In Your 40s:
You’re likely well into your career and hitting your income-earning stride.
- Be realistic about kids’ college costs. A college education is an important pursuit; however, parents shouldn’t jeopardize their financial futures to subsidize their children’s education. Talk with your kids about options, including the availability of scholarships or federal loans.
- Whittle down your mortgage. Wouldn’t it be nice to own your home free and clear before retirement? It’s possible. Try making additional payments every month or several times a year.
- Don’t take on more debt. Although home improvements are tempting, or a big-ticket vacation seems well-deserved, neither is worth the financial risk. And don’t get fooled into a home equity line of credit or borrowing on credit for unnecessary luxuries.
In Your 50s:
Your 50s may be the most-important decade for retirement savings.
- Make savings a priority. You can take advantage of compounding interest as well as money market savings accounts, high-yield certificates, and traditional and Roth individual retirement accounts.
- Get professional help. Many tax laws or investment strategies are complex and practically indecipherable for most ordinary investors.
In Your 60s:
You’ve worked hard, but it’s not time to coast yet.
- Cut your living expenses. You can look at ways to scale down, such as moving to a smaller home, or even relocating to a more affordable city or state.
- Sign up for Medicare. Unless you’re working full time, you’re required to start receiving benefits. And after all, you’ve earned it.
- Finalize your estate plan. If you don’t have a will, get one in place – or review what you have to ensure it’s up to date, especially if you’ve moved.
In Your 70s and Beyond:
- Consider continuing to work. Americans are living longer and leading better quality lives. Many people choose to work or give back to the community. It’s also a way to add to your savings.
- Enjoy yourself. Without a house payment or a growing family to support, you can focus on fun: Travel abroad, visit the grandkids, and give generously to your community.
- Look at long-term care insurance. It provides a multigenerational benefit: The policyholder is covered, while adult children are free to spend more of their income on their own kids.
Finally, every decade is the right time to flex your healthy money habits. Be sure to review your progress regularly, at least annually. And remember, any step toward financial wellness is beneficial.
These tips are provided by ECCU—offering convenient digital banking services to more than 10,000 members around the world. But that’s just the beginning. ECCU also provides trusted financial resources for strengthening Christ-centered families, ministries and missionaries.