Financial Advice for Every Age

financial advice

Money can be an intimidating topic, and every life stage brings a new group of complicated decisions to tackle. But if you manage your money strategically, you can turn money into a tool that works for you, not against you. Here’s how to manage your money in every decade — from your twenties to your seventies.

Year by Year

Money can be an intimidating topic, and every life stage brings a new group of complicated decisions to tackle. But if you manage your money strategically, you can turn money into a tool that works for you, not against you. Here’s how to manage your money in every decade — from your twenties to your seventies.


Get organized. Make a list of everything you own (from the money in the bank to your car or other valuable possession) and everything you owe. Make sure you know your credit score — you may not have much on your credit report yet, but it’s important to keep an eye on your score as you build your history.

Build a budget for your first paycheck. Set up a budget with three sections: essentials, savings, and fun money. Start allocating money to your essentials first, like rent, utilities, food, transportation, and the minimums on your debts.

Next, allocate something — no matter how small — to savings. Your first priority should be an emergency fund, and you should think about your own situation (job security, health benefits at work, your personal support system) to determine a comfortable number.

With the essentials and some savings covered, you can spend the rest however you please. Remember to update your budget periodically, since your financial picture will inevitably change.

Open a retirement account. Investing might sound overwhelming, so start simple by opening a retirement account (an early start will pay off big time through compounding interest). If your employer offers a 401(k), start there. If they have a “match,” aim to contribute enough to get the full benefit. If a 401(k) isn’t an option, you can always open an IRA.


Do a career audit. Now that you’ve been in the working world for a few (or several) years, it’s probably a good time to take a step back and audit your career path. Are you where you want to be professionally? Is it time to ask for a raise or promotion? Alternately, if starting your own business is appealing, now’s a good time to consider what it would take to make the leap.

Be sure to consolidate any 401(k)s, and consider opening an IRA and rolling the 401(k) funds directly into this new account — you’ll stay organized and also have more control over the funds. While you’re at it, take a look at how the funds you’ve saved are invested. It may be time to reevaluate and possibly rebalance.

Consider the rent vs. buy equation. If you haven’t done it already, your thirties are a good time to do the math on whether it makes sense to rent or buy a place. Use a rent vs. buy calculator to help you understand the numbers, and factor in your feelings about the responsibilities involved with homeownership. In the meantime, check in with your credit score and get familiar with mortgage deal breakers, just in case.

Have some big conversations. If you have a significant other, it’s time to address complex subjects like moving in together, marriage, and kids, and to get comfortable with financial conversations. Discuss how you’d like to manage your money: separately, jointly, or somewhere in between.


Get serious about saving. Make sure you know what your retirement income will look like at your current savings rate, and stay on top of your list of everything you own and everything you owe. A solid action plan can help you focus on paying off debt, building your retirement assets, and saving for any other goals you may have, like a down payment on a home (or even a second home), building up your cash reserves to start your own business, or taking a year off to travel abroad. If you have kids, you should also look into a 529 savings plan for college.

Decide whether you need life insurance. Ask yourself whether anyone depends on you and your paycheck. It may feel cold to calculate your “worth” to loved ones, but remember that you’re ensuring they’ll be well cared for in the unlikely event that something happens to you. If you do have dependents, now’s a good time to consider buying life insurance.

Create an estate plan. An estate plan includes everything from medical decisions to where your money and belongings go. You’ll likely need an estate attorney to draft up the basic documents, like a will, a healthcare directive, and power of attorney. Be sure to double-check the beneficiaries listed on your retirement accounts, because they will trump whatever or whomever is listed in your will.


Face retirement head on. It’s time to get realistic about whether you are on track to retire at the age you’ve been planning on. Use a retirement calculator to estimate what kind of monthly income you can expect to draw from your current savings in retirement, and decide whether you need to make some tough choices about delaying retirement or changing your lifestyle to allow you to save more. If you find yourself behind, you may be able to take advantage of “catch up” contributions available to those 50 and over to increase your savings rate.

Decide when you’ll cut the cord. If you have kids, you’ll eventually have to cut the financial cord, so start thinking through what that looks like for your family. If you’re going to help pay for college, make sure you know your options: cash from a 529 or other savings account, federal or private loans, or tapping home equity.

Beyond education, you’ll want to have an honest conversation with your child regarding financial expectations and independence. Make sure you’re on the same page.

Make a long-term care plan. Now is the time to think through long-term care options, when you’re still a long way from needing them. First ask yourself: What can I afford? If the answer is “not much,” you may want to consider purchasing long-term care insurance. Think about what kind of long-term care you might prefer: in-home versus nursing home, full-time or flexible? Make sure you discuss your preferences with your loved ones, and ideally get it all in writing.


Scale back the risk. Now that you’re getting closer to needing your invested money for retirement, you may want to consider allocating more of your savings to lower-risk investments. This doesn’t mean you should step out of the investing game altogether — most people should consider maintaining a diversified portfolio throughout their twilight years.

Decide what retirement will look like. Now that retirement is getting closer, it may be easier for you to imagine what it will look like. Whatever you decide, you need to make sure it fits with your financial plan.

As you weigh the options, it’s a good time to decide whether you want to downsize your home. That big family house might not be the right spot to enjoy your golden years, and real estate selections can greatly affect how much income you’ll need in retirement.

Get specific about how you’ll pay the bills in retirement. You’ll likely fund your retirement from a number of different sources: your retirement savings, Social Security benefits, and any extra income coming in the door. You’ll probably have several types of accounts: taxable, tax deferred, or maybe even tax free. You should consult a tax accountant for the best way to draw on your retirement savings.

Furthermore, educate yourself about Social Security and Medicare. Find out what you are entitled to so you can understand how your benefits fit into your overall retirement plan. Remember that it may be worthwhile to delay Social Security for a few years in order to maximize your income each month.


Plan for the future. No one likes to visit their estate attorney, but it’s important to make sure your will is up to date and reflects your current intentions. You should also decide who will manage your money — now and in the future. Think about identifying someone to take on this role.

Have a career exit strategy. Even the most passionate workers will eventually need to think about an exit strategy. Whether you decide to pursue other activities or retire for health reasons, you should have options in mind so you can do it on your own terms. Decide whether you’d like to work part time to ease into retirement, work remotely, create your own flexible schedule, or choose a hard end date.

Manage your assets. It’s more important than ever to be mindful and make sure you’re staying within your means. You’ll want to put those budgeting skills you learned in your twenties to use here and determine a budget that will allow you to make the most of your assets in retirement. If necessary, you can also consider purchasing an annuity to guarantee a certain level of income.

Before joining the Society of Grownups, Karen Carr completed a BS in finance, obtained her CFP®, and went on to work as an advisor at a boutique, private wealth management firm.

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