Planning for the future can be challenging. The younger you are, the more difficult it might be to take hold of your future financial needs. For this reason, it’s a good idea to enlist the help of a financial professional at a relatively early age. Jim Barker of Barker Insurance Services is a personal financial representative who has worked with clients of all ages to help them properly map out their financial futures. e offers the following guide to smart money moves that to make throughout the years:
Your twenties
• Create an emergency fund to cover three to six months of living expenses in the event that you lose your job or can’t work.
• Start contributing to your retirement via an IRA or 401(k).
• Pay off the credit card debt you racked up buying clothing or backpacking through Europe. Yes, you had fun in college, but now it’s time to start getting serious about your finances.
• Start chipping away at those student loans so that they’re gone by the time you reach your thirties.
Your thirties
• Continue paying into your savings and keep up those retirement fund contributions.
• Consider investing in your own residential property instead of renting if you have not already done so, but don’t take on a mortgage that you’ll have trouble affording.
• Have life insurance in place, especially if you are married and have children to support.
• If children are part of the picture, then start a 529 college savings plan. Even if you don’t have much to contribute, you’ll want to get that plan in place.
Your forties
• Make sure that you’re comfortable with the amount of money you’ve got stored away in savings, and if you are, start ramping up your contributions to your 401(k) or IRA.
• Reevaluate your living situation to determine if your house is big enough for you and your family, or if you’ll need to move to a larger space. Make home improvements or upgrade as necessary, but don’t take on too much additional mortgage or home-improvement debt.
• If you slacked off in your thirties and didn’t get life insurance like you were supposed to, then get it now. The younger you are, the lower your premiums are likely to be.
• Make regular contributions to your child’s 529 college savings plan.
Your fifties
• Now is the time to play IRA and 401(k) catch-up. If your retirement plans aren’t looking as robust as you’d like them to be, then start increasing your monthly contributions.
• Continue paying into your child’s 529 college savings plan. Increase your contributions if necessary and/or possible.
• Set aside some money for home improvements that should only be used when absolutely necessary. At this stage of the game, you should be focusing more on retirement and paying for college, and less so on granite countertops and new window treatments.
• Reassess your entire financial portfolio to ensure that you aren’t too heavily invested in risky prospects or instruments. Remember, with retirement looming just around the bend, now is not the time to take chances with your money.
One of the best ways to ensure that you’ll be able to retire in a comfortable fashion is to develop a financial plan at a young age and stick to it. While this notion requires a fair degree of discipline, a personal financial representative can help keep you on track. Remember, it’s never too early or too late to take control of your finances, and the smarter you are with your money throughout each stage of your life, the better off you’ll be in the long run.
