Saving money in your 20s and 30sDate posted: 11/19/15 09:15:00 AM
It's said that your taste buds change every seven years, turning some foods you once found stomach-churning into pleasant edibles.
Your financial situation might not evolve as fast as your taste receptors, but chances are your financial situation does change from time to time. For example, it's likely that you won't be saving for the same items you were while single in your 20s as the items you'll be stowing money away for in your 30s and 40s while supporting a family.
The same goes for someone going from their 50s to their 60s, when their kids leave home.
Here's a look at some financial guidelines to consider as you go through life:
Saving money in your 20s
According to Brandon Moss, a managing director of an investment advisor group in Dallas, there are too many 20-somethings that make the mistake of saving only for their 401(k).
"Once the money is in the 401(k), it can't come out until you're 59½ (with limited exceptions)," Moss told Daily Finance. "Be sure you're also saving outside your retirement accounts for when you need new tires or it's time to buy a house."
Moss said saving in your 20s is a great time to start good money managing habits that can provide stability for the rest of your life.
"With a trend toward marrying later in life, most of your 20s are spent with little to no obligation to other people," Moss said. "This is prime time to lay a sound financial foundation and develop key habits that will help you for the rest of your life. You can't win or lose your financial life in your 20s, but just getting started gives you a tremendous leg up."
Gil Armour, a certified financial planner, told CNBC the perils many young people face when trying to save money.
"It can be hard to focus on something that's decades in the future, so it helps to show them how dramatic a difference it makes when they start saving in their 20s versus their 30s or 40s," Armour said.
If someone in their 20s can start saving $200 per month in a basic savings account, that can grow to $40,000 in 10 years with compounding and interest, according to Daily Finance.
Establish your finances while in your 30s
According to The Globe and Mail, if you're in your 30s and don't already own a home, now is a good time to get started on the process. In order to accomplish this, you'll need the money you started saving as a 20-something.
If you're already settling down with a family, married or living with a significant other, it's vital to sit down and go over the financial standings of your income and home.
Suzanna de Baca, Ameriprise's vice president of wealth strategies in Minneapolis, said your 30s can also be a good time to ingrain the importance of financial responsibility in your children.
"Guiding them on a path to financial independence is positive for them, but also good for your own financial future," de Baca said. "Teach your kids to spend and save responsibly, and lead by being a positive influence."
Also, if you are the breadwinner in your family, it might be a good time to consider life insurance. If something were to happen to you, you don't want to leave your family unsupported. Life insurance is a simple way to give you and your family some financial peace of mind.
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