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Financial health check up tips for every age

Just as your doctor keeps you on track with age-appropriate health checks and tips, you should practice financial fitness for every stage of your life. 

While some financial health checks should happen continuously throughout your life — like keeping an eye on your credit and monitoring your bank account balance — other activities make more sense at different times in your life.

Make today the perfect opportunity to reflect on how well you’re taking care of yourself — and your finances. This decade-by-decade checklist for a financial heath check-up can help.

 

The keys to financial health, by the decade.

In your teens

It’s never too early to start setting yourself up for success. The habits you start young will serve you all the way through your life. Let’s start with a good rule of thumb: if you’re old enough to earn your own money, you’re old enough to have a bank account. Even if you need to talk to your parents to help set one up. So once you start putting in hours at your first real job, spending your free time babysitting or picking up a side-hustle after school — then, yes, enjoy having a little bit of spending money, but don’t forget to start thinking about your future too.

  • Open a free checking account — it’s literally free and your money is safer than that jar in your room.

  • Choose a goal and save for it. Maybe that’s a phone, car, computer, or PS5 — make it something you want. It’s easier to see the benefit of savings when there’s a reward at the end of the road.

  • Put aside 10% of what you earn just to get in the habit (you’ll be surprised how fast it can grow).

  • Start tracking your expenses, whether that’s through your account online or simply keeping a ledger. Having money is great, but knowing where it goes and seeing it add up helps you understand its value.

  • Use your student ID for discounts and savings — it’s not just for college students, a high school ID will usually do.

  • Look into financial aid for your education. College is expensive and student loan debt isn’t free money — it can be a pretty big burden later in life. You’ll want to explore all your financial aid options as closely as you do your college options.

 

In your 20s

Welcome to the (confusing) world of managing your own finances. We know it can be overwhelming — what with the daily expenses plus those big-ticket costs such as education, housing, and health care. In your 20s you may have heavy debts, but that shouldn't stop you from focusing on your long-term goals, including your ridiculously distant retirement.

  • Shop around for the best deal on a checking account. You may have outgrown the one your parents opened for you back in the day and there are some pretty great rewards (“rewards” as in extra money) now that you’re using your checking account regularly.

  • Open a retirement savings account. Like ASAP. Time is money when it comes to retirement savings and compound interest is your new best friend. The difference between an extra 10 years of savings can be hundreds of thousands of dollars (not a typo) by the time you reach retirement age.

  • Open a savings account and start putting money away for a rainy day. You don’t necessarily need to be saving for a goal as much as you’re getting ready for the unexpected. Life comes at you fast.

  • Don’t just save. Invest. Similar to your retirement savings, if you start investing your money early — then reinvest those earnings over time — you can make compound interest work in your favor.

  • Build your credit score with smart credit use, like paying credit card bills in full each month. Good credit is the key to unlocking the money you need later in life, like when you need to borrow money to buy a house or new car.

  • Keep up with your student loan payments, and get ahead if you can afford it. The sooner you get out of student debt, the more you save on interest and the more you can put toward your next goals.

  • Consider using a personal financial management tool. Getting a handle on finances in your 20s can set you up for a lifetime of financial fitness.

 

 In your 30s

  • Your 30s are so important to your finances for a lot of reasons. In many cases, you’ve got a little bit of everything going on — children, buying a home, paying off debt, saving for retirement, saving for your child’s education, and focusing on your own career advancement plans. Because you still have several decades before retirement (...#realitycheck), your 30s are also a time when it’s easy to lose sight of important goals. 

  • Ready to buy a house? This is when building credit pays off. Taking out a mortgage is a big life moment, so shop around for the best mortgage deal to make sure you find the right mortgage for you.

  • Prioritize getting out of debt, including those loans you just took out. Mortgages, auto loans, personal loans — these are necessary parts of life to afford what we need. But getting back out of debt fast is essential to your financial well-being. Paying ahead on your mortgage helps you build equity and paying ahead your debt saves you a ton of money over time in interest. When you have extra money, put it towards your debt.

  • Don’t forget about your credit card debt. Like your other debt, you’ll want to pay this off as soon as you can (within the interest-free grace period whenever possible).

  • Continue building retirement savings. Your real-life expenses may be adding up, but don’t shortchange your future by cutting back here unless you have to.

  • Start putting aside money for your children’s college education — but only if you’re already on track with both your retirement and paying off your debt!

  • Get life insurance. More responsibilities in life means more people to look out for. Life insurance provides for the people you love in the event you can’t — and it can provide you a lot of peace of mind in what may be one of your more stressful decades financially.

 

In your 40s

By the time you're 40, you probably think you’d have everything figured out, right? If not, no worries. Most people have experienced some challenges, but you’ve likely had some successes (or at least learnings) too. Remember, if you’re in your 40s, you’ve still got a long road ahead of you. In fact, this is the point when many people really ramp up their financial wellness efforts.

  • You might notice a theme here, but your debt should still come first. Hopefully student loans are a thing of the past and you’re paying extra towards your mortgage. Not only does paying off your mortgage now make it less of an expense in retirement, but the equity you build is more money to your name if you choose to sell your home.

  • Keep saving for retirement. As you earn more money and grow in your career, you should be contributing more, too. Max out your contributions if you can. Or, at the very least, make sure you’re contributing enough to receive the full amount of any employer-matched contributions your company offers.

  • Are your kids in high school? It’s time to start researching financial aid options. And maybe it’s time to get them thinking about their own financial future too (in case you skipped the “In your teens” section above.

  • If you haven’t looked into life insurance yet, rates start going up in your 50s. Getting a fixed rate at a younger age may make sense, depending on you and your family’s situation.

In your 50s

Financial wellness in the last decade or two before retirement requires a slightly different focus from when you were in your 20s, 30s, and 40s. Now it’s time to eliminate debt from your life for good, if you haven’t already, and save enough so that when you’re no longer working, you’ll still have enough income from your savings and investments to live the way you want.

  • Step up your retirement savings. Federal law allows people in their 50s to contribute more to 401(k)s and IRAs than younger folks can. Again, maxing out your contribution level should be the goal.

  • Avoid taking on any major new debt.

  • Regularly review your Social Security earnings. You can set up an online account with the Social Security Administration that lets you review your current earnings and projected monthly benefits at any time.

  • Start planning for your long-term healthcare savings and look into long-term care insurance.

In your 60s and beyond

A comfortable, financially secure retirement is a big part of the American dream for many people. It’s important to take care of your financial wellness throughout your life, and especially during your 50s and 60s, if you want to have that kind of dream retirement.

  • Put off collecting Social Security benefits as long as possible. If you wait until your full retirement age to draw benefits, you’ll get the maximum amount you’re entitled to.

  • At age 65, you’re eligible for Medicare benefits, which can reduce some of the financial burden of healthcare costs — especially since most people don’t have health insurance through their employer after retirement.

  • Explore all your Medicare options, from basic original Medicare coverage (if you already have considerable healthcare savings set aside), to Medicare Supplement, to Medicare Advantage, which can offer a lower out-of-pocket costs and additional coverage.

  • When you hit 67, you’ve officially reached retirement age — and hopefully a pretty big boost in the final few years of your 401k or retirement savings plan.

  • Revise your household budget to ensure your nest egg lasts as long as possible.

  • Keep a close eye on your investments to ensure they keep growing and providing you with income for as long as you’ll need it.

  • Work with an estate planner to ensure your finances and legacy are protected.

 

In summary…

Good financial habits last as long you live. And the sooner you start, the more prepared you’ll be for later years. No matter your age, make sure you’re getting in the habit of paying down your debt as soon as you can and investing money in for you future whenever you can.  

It pays to start thinking about your financial health today. Literally, if you’re smart about it.

Tags: Personal Finance