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Financial Guidance For Any Age

Anyone who's ever had a piggy bank has experienced firsthand just how difficult saving can be. Saving money takes time, while resisting the urge to first spend it requires discipline. At any age, being able to manage money wisely is key to future financial stability. Comparison shopping, keeping up with credit, and making a valiant effort to save more and spend less are solid financial practices that consumers can adopt at any age. However, not all practices are one-size-fits-all.

Topics like retirement planning and establishing a child's college fund are time-sensitive, and they should be addressed accordingly. Whether you're in your 20's or your 80's, here's some financial guidance to help keep your finances in order.

How to Save Money in Your 20s

  • Track your spending. Eating out a few times a week might not seem like much, but the expenses can add up quickly. While manually organizing receipts and categorizing the costs each week might not fit into a busy schedule, financial apps like Mint automate and simplify the process. If you're at least aware of how you're spending your money, you'll be able to identify spending habits and ultimately have more control over your financial behavior.
  • Plan ahead. Keeping track of your spending also makes it easier to plan ahead. Planning ahead for future expenditures means setting goals and following a following a budget in order to reach those goals, whether they be big or small or long-term or short-term. Like any skill, budgeting takes practice, so starting off with small, short-term goals may be best to keep you motivated.
  • Live within your means. If you can't afford to stop for a latte every morning, then don't stop for a latte every morning. It may be easier said than done, but making responsible purchase decisions means weighing the cost in terms of affordability, not just need or desire. Be realistic with your budget, first setting aside money for any expected expenses, and then calculate how much is left for discretionary items. It's important to track this discretionary spending, too, so that you don't go over budget or spend beyond your means.
  • Make saving a habit. Consumers encounter at least a dozen purchase decisions every day and each is an opportunity to either save money or to spend it. Make saving a habit by mindfully choosing to save rather than spend throughout the day, instead putting each amount in a savings account or rainy day fund. Regularly contributing to your savings should also be included in your budget, calculated after you allocate enough money for expected expenses but before you determine how much is left for discretionary items. The earlier you develop the habit, the better equipped you'll be to start saving for bigger, more long-term financial goals later on.
  • Establish credit. Building a solid credit history takes time, so it's important to establish credit early on. You aren't born with credit, nor is it automatically "given" to you once you reach a certain age. Credit is a responsibility, and banks and lenders aren't likely to do business with you until after you've proven that you can handle it. Just one way to do this is to secure a credit card. The card provides you with an opportunity to build credit history, but the key is to only spend in small increments and pay the balance in full each month. However, beware of getting too comfortable with credit cards, opening several new cards at once, spending more than 30 percent of the total credit limit or letting any balance fall past due.

How to Spend Money in Your 30s

  • Pay off debt. Now's the time to pay off any credit card bills, education loans or other outstanding debt from your financial past. The first and perhaps most important step to getting out of debt is to prioritize. Prioritizing by interest rate means paying off the debt with the highest interest rates first, which typically tends to be the most cost-effective method. You can also prioritize by amount. Starting with the largest amounts first promises satisfaction in big accomplishments, while starting with the smallest amounts first allows you to set small, short-term goals and provides motivation when you regularly reach them.
  • Build an emergency fund. Having an emergency fund is not the same thing as having an open savings account. An emergency fund is money specifically set aside in cases of emergencies, such as unexpected costs or events. Include contributions to the emergency fund in the budget as a non-negotiable expense until the fund contains at least three to six months of living expenses.
  • Put money aside for retirement. Although the average age of retirement is now 67, it isn't too early to start thinking about how and where you'd like to live after retiring. These are crucial elements to determine how much money you'll need to live during retirement and when you'll be able to retire. Explore a range of options, from a 401(k) to an Individual Retirement Account (IRA), and determine a saving strategy based on your financial needs, or seek the help of a professional financial planner who can guide you along.
  • Start a college fund. New studies show it costs the average family $235,000 to raise a child to the age of 18, and that figure doesn't even include college costs. These expected expenses may seem overwhelming at first; however, breaking them up into smaller periodical amounts makes the costs seem much more manageable. For many, the preferred way to save over time is through a 529 savings plan. Any earnings in the plan are free of taxes as long as they are spent on tuition, room, board and other educational expenses.

How to Make Money in Your 40s and 50s

  • Get ahead. Don't just work hard; work harder. Consistently producing results is often the most tangible reflection of how valuable you are to a company. With the right attitude and work ethic, you can take these results to your boss and ask to be paid accordingly. According to a 2010 study, people who negotiate their salaries earn an average of $5,000 more per year than those who don't. If your current employer doesn't acknowledge how valuable you are, find one that will.
  • Make the most of your paychecks. Resist the urge to buy that brand new car. New cars tend to lose 20 percent of their value the moment they're driven off the lot and up to 65 percent in the following five years. However, purchasing a car that is only a few years old serves as an investment. Quick depreciation isn't a concern, and chances are the shine and "new car smell" can be restored. This logic doesn't just apply to cars; think critically about where your money is going for every purchase, and you'll be able to make the most of it.
  • Develop a plan. In order to stretch money through a long retirement, you'll need a plan. This means determining where your money will come from once you retire based on how and where you'll be living, your current investments and your future returns. Develop a plan with specific figures in mind, and set goals that will enable you to abide by the plan.

How to Manage Money in Your 60s, 70s and 80s

  • Be careful with cards. Seniors make attractive identity theft targets for credit criminals. Seniors tend to be more trusting when giving out personal information, while their extensive credit histories provide the thieves with an enticing opportunity. By using credit cards minimally, you reduce the risk of an identity thief obtaining and misusing your information. It's important to still regularly check your credit reports to ensure nothing has gone awry, even when the cards are not in use, to keep your credit in pristine shape.
  • Make it easy. Simplify your financial routine by taking advantage of automatic deposits and transactions. These quick, but helpful, services can ensure you don't miss payments or have to fumble with paper checks, cash or credit cards when unnecessary.
  • Consider part-time work. Whether you need a little extra cash or just want a little something extra to fill your free time, consider part-time work. Whether it's acquiring a range of experience, built expertise or an excellent work ethic, hiring a retiree has its advantages. Older workers also tend to be more reliable and loyal than younger workers. Some of the best fields for part-time work after retirement include health care, consulting and education.
  • See the world. With virtually no obligations and a solid financial structure, there's never been a better time to explore your options to explore the world. Visit a state you've never been to. Visit all of the states that you've never been to. Go see Paris or London or Rome. If you've never been able to do those things before, now's your chance.