Climbing The Ladder To Financial Freedom
by Stacy Gutschenritter, Union Bank
In one’s “early years,” 20s-30s, you are at the start of your working career and have a list full of firsts. This may be your first real job, your first apartment, and your first steps toward financial freedom. You are finally in the workforce and earning more money than ever before! The flip side—you may also have more expenses than you’ve ever had. Juggling student loans, car payments, credit card bills and living expenses can be a real challenge. By learning how to manage your money early in your career, you can develop skills that will pay off for the rest of your life.
Step One: Pay yourself first by contributing to your company’s retirement plan. Also consider giving up a small sacrifice – skip just one candy bar per day … you could save $365 annually. Compound this over 30 years and you will an additional $28,856.
In the “busy years,” 30s-50s you are buying a home, raising a family, advancing in your career and hopefully managing your money. Knowing how to do this effectively will help you accomplish the many goals on your financial plate: save or pay for college, saving for retirement, keeping your debts under control and starting to plan your estate.
Step Two: Manage and monitor what your net worth is. Consider giving up a small sacrifice – one movie ticket per week … you could save an additional $520 annually. Compound this over 30 years and your retirement plan has an additional $41,110.
In the “pre-retirement,” 50s-60s you are in a time of transition. You’re established in your career, you have a good handle on your financial responsibilities, and you’ve accomplished many goals. However, one of your most important goals is still on the horizon – your retirement. As you near retirement you will need to manage your money, invest for your future, control your taxes and, possibly, plan your legacy.
Step Three: Calculate how much retirement savings you have. Are you on track to meet your goals? Consider increasing your retirement contributions and sacrificing that one specialty coffee per day. This could provide additional annual savings of $1,460.
In the “retirement years” you’ve reached the magic age. Whether you’re already retired or are just thinking about it, your life is changing. Retirement can be a rewarding and fulfilling time of life. To make the most of the years ahead, you’ll need some new financial management skills. Successfully managing your money in retirement, investing for today and for the future, keeping taxes at a minimum and securing your legacy are paramount to enjoying care-free golden years.
No matter what your age or stage of life, it is important to have a financial ladder that takes you to the top – so that you can reach your goals. It is important to save regardless of your age and investing not only your time but also monetarily during each step.