Financial Advice for Every Stage of Life

Photo (cc) by kona99

The following guest post comes from partner site LowCards.com

April is tax time as well as National Financial Literacy Month: two good reasons to look at where you’ve been and where you’re going with your finances.

“Unlike weeds or government debt, money does not grow on its own,” says Bill Hardekopf, CEO of LowCards.com and author of The Credit Card Guidebook. “Building financial security through all stages of life requires a plan and plenty of attention.”

Here are some tips for managing money at different stages of life:

Teenagers

  • Pay yourself first. Teenagers receive money for birthdays, allowance, and jobs. Learn at this early age to pay yourself first and put some money into a savings or investment account. This is one of the best habits you can develop. Stick to this, and you will be surprised how even small sums of money can grow. You can even collect loose change and add to this. Every little bit adds up.
  • Make a budget. If you don’t keep track of your spending, you will not understand where your money goes. Keep a list of every expense, no matter how small. This will make you think twice about the importance of each purchase.

Young adults

  • Save money. If you are single or married without kids, this is the least expensive time of your life. You finally have control of your own money, and it may even feel like a lot of money. You can spend it all on clothes, cars, furniture, and entertainment, or you can spend smartly and save for the future. You may have just graduated from school, but this is best time to plan for retirement. Maximize your retirement accounts because even though the stock market is volatile, time and compounding growth are on your side.
  • Build up your credit score. Test scores are behind you, and now is the time to focus on your credit score. This score is more important than any exam because it is how lenders judge you. Your credit score affects the terms and interest rates for all loans – credit card, mortgage, and auto. The higher your credit score, the lower your interest rates, resulting in more money you can keep. Your payment history and how you handle money is so important that employers may even look at your credit report during the interview process to help screen applicants who may be unreliable or a risk of theft.

Newlyweds

  • Full disclosure of debt and financial obligations. Tell your partner before the wedding about all of your debt. It is not fair to wait until the first bills come in. Make a list of all student loans, car loans, credit card debt, even loans to friends and parents. Get copies of credit reports to verify all open accounts. One or both of you may enter the partnership with debt, but debt payments drain away money you could be saving to help you reach financial goals. If either partner has problems with credit, your rental or mortgage application may be denied, or you may have to pay more money on loans with higher rates.
  • Joint or individual bank accounts
    Will you have one bank account for all income and expenses, or will you start with three accounts–yours, mine, and ours? A joint account is easier to manage and will prevent some disagreements over dividing bills, but decisions need to be shared. It gives each partner some control over their own spending. Couples tend to gravitate toward joint accounts once they add children and major expenses. If you choose to have separate accounts, develop a plan outlining which account pays each bill before the first bills arrive.

Midlife

  • Save for college. The best time to begin saving for college is the day you bring the baby home. There are college savings plans with tax benefits. Look at state-sponsored 529 plans and educational savings accounts.
  • Inheritance and windfalls. You may receive money from a home sale, inheritance, or insurance payment. This is a great chance to pay off high-interest debt, like credit cards or auto loans. It is also a good time to fully fund an emergency fund (six months of household income), and put more money into your retirement account.
  • Teach children about finances. You can set a good example for your kids of saving, spending wisely, and charitable giving. It is easier for them to understand when they watch you do it. Take them shopping with you and show them how to compare prices and find good deals. Let them see you put something back because it cost too much. Open a bank account for them and let them make deposits into their own account. Show them the interest and balance growing on their monthly statement. Give them an allowance and let them make their own decisions about this money. Let them save and pay for the toys and games they really want. This also gives them a chance to make mistakes with money and experience the emotions and understanding that once money is spent, it is gone.

Preparing for retirement

  • Max out your retirement savings. You may still be paying for your children’s college education, but it is just as important that you save all you can for your retirement. If you retire at 65, will your retirement savings sustain you for 20 years or more? It is a good idea to save 10 to 20 percent of your annual income for retirement. Max out your employer’s retirement plans, and your individual retirement accounts (IRAs).
  • Pay off your debt. It is easier to pay off credit card and other debt now while you have income. Start with the card with the highest interest rate and pay as much as you can above the minimum balance. You can even skip dinner at a restaurant and immediately log in to your account to apply that money to your credit card.
  • Have a plan to make your savings last. Today, seniors have a longer life and their retirement savings has to last longer. This may be difficult if your investments are still recovering from the recent financial turmoil. Developing a plan and a budget may require the help of a financial adviser. The FDIC provides some good information on how to help your money last after your last paycheck: Check it out at this page of their website.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
10 Ways Retailers Trick You Into Spending More
10 Ways Retailers Trick You Into Spending More

Think you’re a savvy shopper? Find out how retailers persuade you to dig more deeply into your wallet.

26 Things Everyone Should Keep in Their Car
26 Things Everyone Should Keep in Their Car

These tools and conveniences help protect drivers from hassles and calamities on the road.

8 Things You Should Rent Instead of Buying
8 Things You Should Rent Instead of Buying

You may think you’re looking at a must-have purchase. But do the numbers and think twice.

5 Memberships That Offer Car Insurance Discounts
5 Memberships That Offer Car Insurance Discounts

These discounts may save you hundreds — even thousands — of dollars a year.

12 Easy Ways To Make Make Money Online Without Leaving Home
12 Easy Ways To Make Make Money Online Without Leaving Home

If you’re hanging around the house a lot these days — and who isn’t? — use your time to make some extra cash.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

How to Buy Gas At Costco Without a Membership
How to Buy Gas At Costco Without a Membership

The warehouse club often has some of the cheapest gas in town. Here’s how you can get it as a nonmember.

10 Things to Stop Buying If You Want a Clutter-Free Home
10 Things to Stop Buying If You Want a Clutter-Free Home

If you like to keep things simple, avoid these purchases.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Vacuums from this brand can last a half-century, if not longer — and they’re hot on the resale market.

A Simple Way to Silence Robocalls Today
A Simple Way to Silence Robocalls Today

A few steps can keep your phone from ringing when a spammer calls.

This Company Makes the Best Tires in America
This Company Makes the Best Tires in America

Driver satisfaction with tires is at an all-time high, but one brand stands out.

Can I Switch to Spousal Social Security Benefits When My Ex Dies?
Can I Switch to Spousal Social Security Benefits When My Ex Dies?

Knowing when to claim can help you maximize benefits.

36 Things That Will Be Obsolete Soon
36 Things That Will Be Obsolete Soon

The writing is on the wall for dozens of things we have grown up with.

This Health Issue Can Hint at Dementia Years in Advance
This Health Issue Can Hint at Dementia Years in Advance

One type of pain is especially associated with cognitive decline.

8 Things You Should Always Buy on Amazon
8 Things You Should Always Buy on Amazon

The giant retailer shines when it comes to these things, from basics to hard-to-find specialty goods.

8 Federal Income Tax Breaks for Homeowners
8 Federal Income Tax Breaks for Homeowners

Some of these deductions and credits are available to a wide swath of homeowners.

10 Deep Discounts Available on Amazon This Friday
10 Deep Discounts Available on Amazon This Friday

These items are steeply discounted — but the deals won’t last long.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

17 Surprising Things You Can Sell for Extra Money
17 Surprising Things You Can Sell for Extra Money

You probably don’t realize these items are worth decent cash.

5 Ways to Fill Your Pantry With Free Food
5 Ways to Fill Your Pantry With Free Food

Anyone can take advantage of these resources.

10 Types of Retirement Income That Are Not Taxable
10 Types of Retirement Income That Are Not Taxable

There are lots of things Uncle Sam can’t touch — so long as you play by the rules.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

6 Reasons You Should Stop Hiding Cash at Home
6 Reasons You Should Stop Hiding Cash at Home

Stashing money around the house is anything but harmless.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.