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10 Most Effective Ways to Budget Your Money at Any Age

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When you’re putting together your budget and figuring out how to save money, you’ll need to accommodate for some of the transitions and challenges of your current life stage. Learning how to make a budget and discovering the best ways to save money when you’re younger can make it that much easier to manage your money and grow your nest egg as you get older.

Whether you’re fresh out of college or heading into retirement, making smart money moves as your paycheck increases or decreases can keep you on a healthy financial track. Here are 10 most effective ways to manage your budget and save money at any age.

Budgeting Money in Your 20s

As you start transitioning into the working world, you’ll need a game plan to manage your finances so you steer clear of debt. Seven in 10 college seniors who graduated in 2015 had an average of $30,100 in student loan debt, according to the Institute for College Access & Success. It might take more than a few years to pay off that debt, so you’ll need to account for student loan payments when making your budget and avoid adding to your debt load. Whether or not you have student loans, you’ll need to develop skills to manage your money as you pay for rent, a car and living expenses. Here’s how to get started:

1. Cut back on nonessentials. One way to keep yourself on track with your goals is to make a realistic budget that accounts for all your living expenses, credit card payments, loans and personal purchases. You can use apps like Clarity Money or Mint to keep closer track of your daily expenditures and learn how to create a budget that works for your lifestyle. Senator Elizabeth Warren recommended following the 50/30/20 rule: 50 percent of your income goes toward essentials, 30 percent covers your wants or nonessentials, and 20 percent goes toward savings and debt payments.

Setting limits on spending — especially on entertainment, food, travel, clothing and luxuries — can help you stay in the green without making you feel like you’re missing out. Explore cheap alternatives for your everyday expenses, such as shopping for food at a co-op or farmers market, trading cable for a Netflix or Hulu subscription, and shopping consignment stores for clothes.

2. Open a savings account. Whether you’re looking to buy a new car or want to buy a house in the near future, you’ll need to create some realistic savings goals. You might not be making your ideal salary at this life stage, but you can still make money decisions that will help you move your life forward.

Check Out: Simple Budget Templates

Explore online savings accounts with higher-than-average interest rates and savings accounts at your bank or credit union to get the best returns on your savings contributions. To make savings a habit that you don’t have to think about, set up automated transfers to a savings account each month. Automation can get you into the habit of saving without a lot of effort.

Find Out: 20 Things You Should Know About Saving Money in Your 20s

How to Budget in Your 30s

At this point in your life, you have probably adopted — hopefully adopted — a budgeting habit and have a better handle on paying your bills on time, reducing or eliminating credit card use, and keeping expenses under control. You might be making some big career transitions or getting married at this life stage, which will affect your finances. Your next steps are to:

3. Open a 401k or IRA. As you continue to find ways to save money on everyday expenses to steer clear of debt, start making contributions to a retirement account, such as a 401k or individual retirement account. If you’re not set up with an employer-sponsored retirement plan, now is a great time to start one. Personal finance expert Dave Ramsey has recommended saving at least 15 percent of your income for retirement and making the full contribution allowed by the IRS. You might also consider investing in stocks and bonds to build your investment portfolio.

4. Build up your emergency fund. As you start earning more money with a better job or new career prospects, now is a good time to adjust your emergency fund savings contributions so you’re building a good safety net. If you haven’t established an emergency fund, you might end up having to dip into your retirement account or max out credit cards just to stay afloat, which you want to avoid doing.

Learn: How to Master Your 401k in Your 30s

Budgeting Money in Your 40s

Whether you are settled into married life and have kids or you’re single and focusing on your career, your 40s is a good time to shift your financial focus toward investing and generating income. You might have mastered some of the best ways to save money by now and even paid off your student loans. These actions translate to having more money available to contribute toward savings and retirement, charitable organizations, and luxury purchases, which means you can now do the following:

5. Rework your budget. A growing family means additional expenses, including life insurance, increasing medical costs, tuition and costs related to moving or buying a new home. Now is a great time to rework your budget and set some new spending and savings goals. You’ll need to identify and analyze new expense categories and consider all sources of income to make your budget work.

6. Generate more income. Even if you have a full-time job and are overwhelmed with career or parenting responsibilities, don’t overlook some ways to generate some passive income to keep yourself on a healthy financial track. A boost in income could make it easier to save more money and reach your short-term and long-term goals, such as retirement. Consider starting a side hustle that makes use of your talents, skills or other resources. You could rent out a free room in your home on Airbnb, do some freelance bookkeeping or even sign up for gigs on Task Rabbit.

Related: 10 Immediate Steps to Start Planning for Retirement in Your 40s

Ways to Save Money and Budget in Your 50s

Now that you’ve paid off credit card debt, student loans and possibly your mortgage, most of your income outside of living expenses can go toward retirement and investments. At this life stage, you might benefit from some professional advice to help reorganize your financial house by taking the following steps:

7. Consult a retirement planner. Working with a financial advisor or retirement planning specialist can help you determine your best investing strategy and the ideal time to retire. Consider how many more years you want to keep working and make tax-efficient investing decisions to build wealth. You might change your investment portfolio based on how close you are to retiring.

8. Reconsider lifestyle choices. If you want to make the most of your last decade or so of working and earning years, cutting down on living expenses can make those hard-earned dollars stretch that much further. For example, if you’re an empty-nester and want to travel more frequently, you could downsize your living situation by moving into an apartment or condo and selling your house to save money. If you have a second home, a boat or a recreational vehicle in storage, you could rent or sell some assets to build up your savings.

Related: 50 Things Every 50-Something Should Know About Retirement

How to Budget in Your 60s and in Retirement

Your golden years can be even more satisfying when you’re not burdened by debt or financial worries. If you’re retired and are no longer getting a steady paycheck from an employer, you need to make some smart money moves to maximize your retirement income and manage your assets, such as further reducing your expenses and looking for ways to save on necessities. If you are still preparing for retirement, try taking the following steps:

9. Try living on your estimated retirement budget for a month. Your monthly expenses might be very different from what they were just a decade ago, so you’ll need to learn how to make a budget that works with your current lifestyle and meets your needs. You can estimate your monthly expenses in retirement; these would include expenses such as alimony, medical services and medical supplies, life insurance premiums and other costs.

Try living on your estimated retirement budget for at least one month to see if it’s realistic. You can maintain good money habits to save money on groceries, transportation and other everyday expenses to maximize your budget and determine whether your estimate is reasonable or if you need to adjust it.

10. Execute your retirement withdrawal strategy. All your consistency in saving money for retirement in the last few decades will now pay off because you’ll be able to access that money in your retirement years. It’s critical to plan out your withdrawal strategy: Make tax-efficient withdrawals from your retirement and investment accounts in a sequence that won’t have you paying penalties, high fees or excessive taxes on your earnings. 

A more successful strategy could mean withdrawing from traditional IRA and 401k accounts first, and then withdrawing from taxable accounts, tax-deferred retirement accounts, and tax-exempt Roth IRA and 401k accounts — in that order — according to Fidelity. This approach can help you save the most money and give you the highest possible return on your investments. Finally, carefully consider what age you’ll starting collecting Social Security benefits in order to get the maximum that you can.

Keep Reading: 7 Things to Do Now That Will Pay Off Later