MANAGING YOUR FINANCES THROUGH THE YEARS
Different stages of life require you to think about different aspects of your financial health. What’s important in your 20s is likely not going to be as important in your 50s or 60s. And while we know that age doesn’t necessarily determine your financial status – since for example, you might start a family in your 20s, 30s or 40s, if at all – we do know that whatever your age, the most important thing is to plan ahead and anticipate coming changes in your financial situation.
Our financial education partner BALANCE recommends following these general guidelines:
IN YOUR 20S
- Establish credit and maintain a good payment record. Do not charge more than you can pay off in 3 months (or better yet, within the month).
- Set up an emergency savings fund, typically 3-to-6 months’ living expenses. Keep this money as liquid (accessible with few, if any, penalties) as possible.
- Start learning about investing and establish an automatic savings program to reach your financial goals.
- If you can, buy a home, or start saving for the down payment.
- Make sure you are taking full advantage of the savings benefits available to you through your employer: 401(k) or 403(b), etc.
- Make sure you have adequate insurance coverage (life, home, auto, health, disability).
IN YOUR 30S
- If you have children, begin investing for their education.
- Continue to keep credit under control and avoid paying finance charges and annual fees.
- Write a will or review the one you have.
- Review your insurance coverage if you have changes in your family situation, increasing assets or professional activities.
IN YOUR 40S
- As your income grows, look for investments and savings plans that shelter some of it from taxes.
- Work with a financial planner to figure out how much you’ll need to have saved to maintain your lifestyle in retirement.
- Step up personal and employer-sponsored retirement savings accordingly.
- Review your investment allocation and make sure you are still well diversified.
IN YOUR 50S
- Review your will and estate plan.
- Pay off your debts. Depending on the going rates for different types of investments, it may or may not be wise to pay off your mortgage now.
- Maximize your savings for retirement.
- Make sure your growing assets are protected by liability insurance.
IN YOUR 60S
- As you near retirement, switch a portion of your investments to low-risk types to produce income rather than higher-risk growth.
- With life expectancy increasing, make sure a portion of your retirement savings is invested so that it continues to outpace inflation.
- Maintain your health and long-term-care insurance.
- Remain wary of scams aimed at seniors
For more information about money management at any stage of life, visit the BALANCE website at IronworkersCU.balancepro.org. For personal help on achieving your financial goals, give us a call at 877-769-4766 and make an appointment to speak to a member services representative. We’re committed to helping you and your family have the best financial future possible!