Best Financial Resolutions for Your 20s, 30s, 40s, 50s, 60s & Beyond
Nearly 7 in 10 Americans are considering making New Year’s resolutions that have something to do with money, according to the 2022 Financial Resolutions Study from Fidelity. That puts financial improvement up there with physical health as America’s most popular wintertime self-promises.
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The most common financial resolutions deal with saving money, reducing debt and slashing spending — all noble vows, indeed — but different age groups might be better off tailoring their pledges to their respective stages in life.
Here’s a look at the resolutions the experts suggest across the decades.
20s: Resolve To Save and Invest for the Future
Julie Ramhold, a consumer analyst with DealNews.com, advises young adults to vow to sock money away for retirement, despite how far off that might feel.
“It might seem too early to do so, but the economy in the state it’s in, and the problems plaguing young professionals, it’s best to start setting aside money now, even if you aren’t working for a place that contributes to a 401k,” Ramhold said. “Open your own account if you have to, and even if you can only put a little away, start doing so now — that little bit will add up over time.”
Even if it’s not for retirement specifically, time is every investor’s most powerful weapon and you’ll never have more of it than you do in your 20s. If you don’t do a little now, future you will have to do a lot.
“Start investing in some capacity,” said Omer Reiner, a licensed realtor and president of FL Cash Home Buyers. “The easiest way to do this is to open up an investment brokerage and buy index funds that track the overall stock market. You have an advantage as a younger person because your money has plenty of time to grow.”
30s: Resolve To Be Debt-Free
If you saved money in your 20s — or even if you didn’t — the best resolution you can make in your 30s is to enter middle age debt-free. Between growing kids, aging parents and ever-mounting bills, your 40s can be expensive. The last thing you need is a bunch of IOUs hanging over your head — with interest.
“If you have any lingering debt, whether it’s student loans, or paying on a mortgage, car, or even significant amounts of credit card debt, it’s best to try to aim to pay it off as quickly as you can,” Ramhold said. “This will allow you to save more once it’s taken care of, as well as put funds towards more things you want to do like family vacations, international trips, investments, or anything in between.”
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40s: Resolve To Begin Estate Planning
While your 40s are the prime earning years for most, it can also be a decade of intense financial pressure. Whether you have elderly parents above you, kids of your own below you or both, loose ends spell bad news for all generations involved. It’s time to start preparing for the inevitable.
“You might be caring for aging parents and children now,” said Renee Fry, CEO of the estate planning firm Gentreo. “This means you need to get all your ducks in a row and make sure your parents have updated documents, too. The three essential estate planning documents are wills, health care proxies, and powers of attorney for financial assets.”
50s: Resolve To Increase Your Retirement Contributions
When you turn 50, the window on your time to save for retirement rapidly starts closing — but opportunity also knocks. That’s the age that the IRS allows you to start making catch-up contributions on 401(k) plans, IRAs and other retirement accounts. Since your investments won’t have as much time to compound, it’s important to stuff as much as you can into tax-privileged accounts while you can.
“Even if you’re only working part-time, it’s a good idea to increase your retirement contributions during your 50s so that you have more cash on hand when you retire,” Ramhold said. “Be sure to contribute as much extra as you can afford to do, but don’t push too hard — you’ll want to leave enough funds to be able to do things you enjoy without saving all your money for later.”
60s: Resolve To Cut Expenses
Both to save money in anticipation of retirement and to practice living frugally for when you finally do retire, 60 is the right age to start trimming the fat in your budget.
“Many people will be getting ready to retire in their 60s if they’re able to, so it’s best to audit your expenses during this time,” Ramhold said. “Cut out anything extraneous, especially services you don’t often use, but also check out your plans for things like the internet and cell phones — you may be able to downgrade to a cheaper plan without losing much.”
… And Beyond: Resolve To Pass It Down
By the time you reach your golden years, you’ll have a valuable asset to pass on to your posterity even if you’re on a fixed income — financial knowledge. It’s an inheritance worth receiving.
“If you are 60 or older, teach,” said Chartered financial analyst Greg Wilson, co-owner of ChaChingQueen.com, a site about living well on a budget. “You know so many things. Find a way to share your knowledge and experiences. It will be as healthy for you to do so as it is to your audience.”
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