Financial goals for each decade of your (adult) life

“What should I work on with my money now?” It’s the second most asked question I get as a financial educator, how to make your first million first. Here are money goals for every decade of your (adult) life that are almost always helpful in answering that question.

Money goals in your twenties…

There are four financial goals to strive for in this decade and they will help you develop healthy money habits for the future.

Graduate and get a decent job: The first job (or two) won’t be your dream job. But if it pays reasonably well and offers opportunities to gain good experience, stick with it for a while. Learn to network, keep your skills sharp and your LinkedIn profile up to date.

Build credit: Your score increases when you pay your debts regularly and on time and when you avoid maxing out limits on credit cards and lines of credit. I recommend tracking your credit score through your bank or an app like Credit Karma.

Learning how to save: Think – and save – for your short-term goals, such as traveling and moving. Separate this money from a rainy day fund (used for emergencies). On payday, transfer money to any savings account and track your progress.

Start investing: If your employer has a retirement savings plan, sign up. If not, TFSA and RRSP accounts, through your bank, a robo-advisor, or a certified financial planner, are great places to start your investment journey. Automate contributions on payday.

Money goals in your 30s…

Some of the biggest milestones happen to people in their thirties: career changes, marriage, family, buying homes, etc. There are three financial goals to aim for in this decade.

pay off debts, aggressive: Too much debt can be a showstopper for a relationship, buying a house, having kids, and even changing careers. Make debt freedom a top goal. You have less stress and quickly build up financial security.

Mastering the Budgeting Process: You toyed with budgeting in your 20s, but there wasn’t nearly enough at stake to stick to it. Now, in his thirties, everything is on the line. Figure out your method (zero-based budgeting, annual expense planning, envelopes, the POS system – whatever) and master it. Budgeting is how you achieve big money goals like building a down payment, paying for a wedding, taking that epic trip, or starting your family.

Marry well (not necessarily rich): If you and your honey are financially matched, you’re more likely to stay together. Believe me, I literally wrote a book about this called “The Modern Couple’s Money Guide”. Run for the hills if you can’t agree on money. It is important to note that people in their thirties can still build financial security without owning a home. While the emotional pressure to buy is red hot, take a close look at the numbers before making a purchase.

Money goals in your 40s…

This is an expensive time of life, as well as when many people start earning more in their careers. Pursue these money goals.

Upping your career game: You are approaching 20 years of work experience and are now an expert at what you do. Put your name in the hat for higher paying opportunities, ask for that raise or promotion you’ve been working towards. Consider moving to a new employer who is eager for your talent and willing to pay you more.

Investing more: Phew! You still have time to prepare for retirement, but if you’re falling behind (according to your money coach or financial planner, who you should definitely have hired at this point in your life), it’s time to catch up. Between your work-retirement savings programs, RRSPs, and TFSAs, aim to invest 10 to 20 percent of your income for retirement.

Avoiding Lifestyle Inflation: Everyone in the neighborhood is upping their lifestyles – bigger houses, nicer cars, better kids camps and and and… the data shows that most are paying for their larger lifestyles in debt. Stick to what your household can actually afford.

Money goals in your fifties…

Your savings and investment systems are all working now, with a few tweaks. You have largely stayed out of debt. You make the most money you’ve ever made. Your financial planner annually evaluates your money strategy with you and it is on track. You can take a deep breath and strive for these two goals.

Lowering Your Mortgage: Ideally, you’ll be mortgage-free on your primary residence before retirement. If your budget is flexible enough to take advantage of prepayment options, it might be time to take advantage of this, even if it’s a modest speeding up of payments, such as increasing your weekly payment by $50.

Enjoy your money: why not? Your hard work pays off and you can plan for travel, that home remodel or even a career change. Work these expenses into your budget.

Money goals in the 60…

For most, this decade is about retirement readiness. For some, it’s a complete reinvention of work, life and more. My advice is to just be ready to retire, even if you don’t do it in a traditional way or at a traditional time (65 for most).

Strive for Retirement Readiness: Understand your sources of income in retirement, such as CPP, OAS, pension funds, a RIF, etc. Make sure you and your financial advisor have established a realistic budget around this income. Spend time visualizing how you want to spend your time and money. Start exploring the hobbies you’ve been putting off.

Think of these money moves as guiding lights (not hard and fast rules) to help you and your loved ones make progress with your money every decade.

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