Regardless of your age or stage in life, certain financial goals have withstood the test of time and are good to put into practice and maintain for decades.
Here are 6 financial goals everyone should have at any age.
1. Live within your means
No matter what your age or income level, living within your means is key to long-term financial success.
Simply put, don’t spend more than you make or you won’t be able to accomplish the next goal.
2. Be(come) Debt free
What you’re really doing when you borrow money is spending ‘future dollars’ – money that you haven’t earned yet.
In essence, you’re borrowing from your future self. It’s the complete opposite of saving. Duh!
The trouble really comes when you borrow too much and don’t have enough future income to pay for it all.
Best practice to live debt free throughout your lifetime, but especially during retirement since most retirees have limited income.
3. Build and maintain good credit
Some things it actually makes sense to borrow for, like higher education or
That’s why maintaining good credit is important for those purchases that are simply too difficult to afford in a cash payment.
Being able to lock in a low-interest rate on a large purchase will save you tens of thousands of dollars in the long run.
4. Have an emergency fund
An emergency fund is important because it will provide a cushion to support your living expenses during periods of transition, disability, or other unexpected events.
When calculating an appropriate emergency fund, be sure to use the expenses that wouldn’t go away in the event you couldn’t work such as insurance premiums and essential living costs.
In general, you’ll want to have an emergency reserve to cover three to six months of these expenses.
It’s also wise to keep a modest amount of physical
5. Maximize retirement savings for your income
While it would be nice to be able to put $19,000 per year into your 401(k) — the IRS’s limit for 2019 — for many people, it just isn’t feasible because they don’t earn enough. Instead, focus on maximizing retirement savings for your income level.
A good rule of thumb to follow is to start at 10% and slowly work your way up to 25% as you advance in your career and your income increases.
Saving at this level is a sure-fire way to significantly build retirement assets and it also helps you live well within your means.
6. Find value in your money
Finally, know why money is important to you and then align it with your values.