Getty Images If you were a smart kid and started saving your allowance in a piggy bank or sneakily kept the change from a $20 when you bought milk for your mom, you probably already realize that your financial priorities change over time. A handful of quarters or fistful of dollar bills served you well as a preteen, but as we age, so should our money management goals.
Feeling pulled in different directions when it comes to saving money for an emergency, a house, tuition, and retirement? For help on how to establish priorities based on age, we asked financial advisors to weigh in. Naturally, you’ll have some very specific individual goals. But these guidelines will help you rank what’s important to you right now.
20s: “With a trend toward marrying later in life, most of your 20s are spent with little to no obligation to other people,” says Brandon Moss, managing director at United Capital in Dallas. “This is prime time to lay a sound financial foundation and develop key habits that will help you for the rest of your life. You can’t win or lose your financial life in your 20s, but just getting started gives you a tremendous leg up.” 30s: For those who have kids, your 30s are the time to take steps to instill financial responsibility in your children, suggests Suzanna de Baca, vice president of wealth strategies at Ameriprise in Minneapolis. “Guiding them on a path to financial independence is positive for them, but also good for your own financial future. Teach your kids to spend and save responsibly, and lead by being a positive influence,” she says. Also, especially now that you have kids, be sure to establish a will and guardianship plan. 40s: “It’s gut-check time,” says Moss. “Real decisions need to be considered, and it’s more important than ever to be on the same page as your significant other.” 50s: “These are typically your peak earning years and your peak savings years,” says Jeremy Kisner, author of “A Good Financial Advisor Will Tell You…” and a certified financial planner and president of Surevest Wealth Management in Phoenix. “Your kids are typically grown and on their own. Child care and related expenses disappear. Mortgage payments that were a stretch when you first bought your home have become more affordable because the payments remain level but your household income has increased.” 60s: “These should also be peak saving years,” says Kisner. “However, it should be pointed out that more than 40 percent of workers are forced to retire earlier than planned due to medical reasons, corporate downsizing or layoffs, or the necessity of taking care of elderly parents.” “Regardless of age, one thing I always like to tell people is, “It’s OK to not be OK,'” says Moss. “Money is tough, but it doesn’t have to be all-consuming. No matter where you are, it’s never too late or too difficult to right the ship.”
Michele Lerner is a Motley Fool contributing writer.