A money milestone is sometimes called a long-term goal or age related financial goal. They are targets to achieve by a certain age or stage in life. For instance, buying a home in your 30s or saving a certain amount of money by your 40s. These milestones can guide you to your goals and ensure that you do not get lost along the way.
Remember, age related financial milestones are purely suggestions or guidelines. These targets are not set in stone. They will vary depending on your specific situation in life.
Common Financial Milestones by Age
Teenagers
- Typically, this is when youth learn basic financial concepts. For instance, a job with a paycheck and payroll taxes.
An easy milestone at this age is learning to save part of every paycheck. Parents can offer guidance and encourage savings. - Teens can also be learning about being a smart consumer regarding student loans, credit cards, goal setting and practicing their skills.
- Mistakes will happen, that’s part of the learning.
20s – 30s
- At this age, many young adults start working full time. Some may be still finishing college degrees or certification programs.
They may be living on their own for the first time. - This is the time where setting the foundation for financial fitness is important.
- Starting to pay off student loans or other debt.
- Saving for retirement may seem like a challenge. However, this is an important age to begin contributing to employer sponsored retirement plans, setting up Roth IRA or regular IRA.
- Learning about managing risks through life and health insurance.
- Saving for a down payment for a house, creating an emergency savings, learning about investing.
- Writing a will. Even if you do not have any true ‘assets’, if you have a child, you’ll need a will declaring guardianship if something were to happen to you.
40s – 50s
- Generally, this age range of people are more secure in their careers and family life.
- This is a building wealth and security time frame.
- Many seek the assistance of professionals in arranging estate plans, retirement planning, investing, considering all insurance needs, building emergency savings, possibly planning for children’s college expenses, updating wills.
- Getting serious about paying off debts is often a major milestone.
60s +
- People in this age range often realize they are behind in reaching financial milestones.
- Professionals are often sought to assist in retirement planning by increasing contributions and aggressively saving for the future.
- Creating an estate plan and updating wills is common at this stage requiring a professional.
- The need for building emergency savings and debt reduction continues to be a major milestone.
So what age is the right age to start saving money for your future? The answer is any age when you start to work and earn money for yourself. Saving money is a wise financial practice at any age.
The best time to start is now, no matter your age. Keep reaching for the goal or consider changing it.
America Save Week
America Saves PodCast on this topic. #ASW2023 @AmericaSaves #AmericaSavesWeek
