Financial Health Through the Decades
In each decade of life, it’s important to make sure that the right financial decisions are being made to ensure that financial health and freedom remain in life through the working years, and that retirement is an enjoyable experience with ample funds. The most important element of good financial health is that the process must start early, and so this means that the moment an individual heads into his twenties, attention must be paid to finances and saving.
Many people don’t feel as though they’re actually grown up when they’re in their 20s, and many people have a long way to go until they’re a full and active member of society. College classes, a party-centric way of life, and lots of socializing mark this decade of life. But there are financial responsibilities as well during this time, and when full employment in a career is found, it’s important to start looking at making contributions to a Registered Retirement Savings Plan. Even a small monthly contribution will help build healthy finances early in life.
Another vital aspect of a healthy decade in one’s 20s is making sure to be responsible with credit cards. Some individuals might compare credit cards Canada offers by many different lenders so as to have an emergency card, but the only time someone should keep credit cards around is if the entire balance is paid off each month. An individual may already be paying off school loans after college at this time, and one’s 20s is not the decade to build up debt.
Increasing responsibilities, better income, and more expenses mark a person’s next decade in life and the 30s should be one of enjoying adulthood and creating a family or a better life for one’s self. Many people will want to purchase a home in their 30s, and this means dealing with a mortgage and all the financial responsibilities that come with owning a home.
For individuals who were smart in their 20s and resisted getting into heavy credit card debt, the process of obtaining a mortgage and keeping one’s finances healthy is much easier. In addition, the contributions to retirement funding need to increase in this decade.
The next decade is where it can all go wrong if a person isn’t careful. By this time, an individual should be well-set in his or her profession and will very likely have started a family, or started a life with a partner. It is terrifically easy for families to spend way too much money in this decade because incomes are higher and spending just becomes a way of life. As with the 30s, there should be another increase of money put toward savings and investments, and some close attention should be paid to retirement planning to ensure that it is on the right track.
By the time one reaches his 50s the finances should be well-set in familiar patterns, although this decade isn’t the time to sit back and let that money do its work. Continued vigilance of one’s retirement funding, the health of the mortgage (if it isn’t already paid off at this point), and general expenditures is important to guarantee financial security.
The 60s and Retirement
If everything has gone as planned, the 60s should be a time when work is winding down, and retirement planning is coming to fruition. Depending on the year when one wishes to retire, plans need to be made to begin utilizing savings and investments for income. With a long history of financial responsibility, an individual or couple should be well versed in healthy financial habits and should be able to transition into this phase of life with ease.
Each decade of life represents additional milestones and financial concerns, but with the right sort of behavior, one will be able to enjoy each decade and also save up enough money for retirement.
Melissa Wood contributes as an editor at RateSupermarket.ca. Obsessed with finding small ways to save money every day, she enjoys sharing her frugal lifestyle to the MoneyWise Blog. Read more about Melissa on her Google+ page.