How we manage our money naturally changes as we move from our 20s into our 30s, our 40s, our 50s and beyond. So, what should our top financial priorities be, decade by decade? There is no one-size-fits-all answer and of course each goal does not in reality fit nicely into each ten year period, but here’s what I think are the key common themes.
In your 20s
– Your first focus post education will be to build a career and maximise your income
– Surplus income should then give you a chance to pay off debt
– After which you can establish an emergency cash fund
– This period will hopefully also see you start a pension
In your 30s
– You’ll probably want to put down roots and buy your first home
– Which of course means you’ll need to save for a deposit
– If you have a family, you’ll want to insure yourselves appropriately
– And don’t forget to make a will
In your 40s
– This is often our first time to really engage in financial planning
– A full and busy life means it’s a good time to manage your spending
– As your earnings increase you might be able to invest surplus income
– And as part of that you should aim to increase pension contributions
In your 50s
– Now is the time to really prepare and plan your retirement
– For which you should be aiming to get debt and mortgage free
– You may then be ready to set a retirement date
– And also plan and set retirement lifestyle goals
In your 60s
– After retirement you will begin to use savings for everyday spending
– You’ll also need to make sure you manage pension drawdown carefully
– If you’re short of income but still in a large home you may consider downsizing
– By which stage you will be thinking of the next generation in your estate planning
For more detail on all of these financial goals, please click on Further Insights below and have a read through some of my other blogs.
For example, if you like this article, you might like this one: How to Beat Inflation