Building your best financial future at every age


Setting up good financial habits now will pay off for the rest of your life.
Sarah Twomey | Desjardins Group

Your twenties can be an exciting time of your life, financially. For example, you may be among a lucky few who have graduated college or university without any debts because you decided to live at home instead of on campus. And now, you've got a couple of part-time jobs and you're looking to rent a place with a friend. 

Finally for the first time, you're in charge of your financial decisions, which can become a little overwhelming. When the pressure gets to be too much, you might be tempted to splurge a bit. But, what if the splurges become more frequent? It might lead to bad financial habits into your 30s, 40s and beyond. Here are some ideas on how you can remain financially disciplined through every age. 

Twenty-something:
Do you know where your money goes? Getting a handle on your spending now will benefit you in the long-term. The best way to do this is to create a simple and flexible budget. Make a list of your income and expenditures like rent, groceries, utilities, transportation, savings, fun and clothing. Also include a line for debt and for retirement savings. By why save for retirement when it's decades away? Thanks to compounding interest, you'll be surprised how big your nest-egg will grow!

Thirty-something:
You have more purchasing power now that you're established in your career. That also means that it's easy to pack on the debt, too. Perhaps you own a house or a condo, you've leased a car, you've taken a couple vacations, or maybe you've just had a really big wedding and a baby or two. If you were a diligent saver in your twenties, chances are you have a pile of cash put aside for that pile of bills on your desk. If the opposite is true, then it's time to shut down the debt before it snowballs into your forties. Try to pay off your credit cards each month, too. Or aim to pay more than the minimum. And always apply any new found money to your debt. During this decade also, try to put as much as you can afford into an RRSP. You'll really appreciate it in your forties and beyond.

Forty-something:
Now that your debt is under control, how are your savings? Did you put away as much as you could for retirement and for emergencies? If you have kids, did you consider starting an RESP for their post-secondary education? If you were too focused on reducing your debt in the last decade, there's still some time to catch up. Speak with a financial advisor about setting up an education fund for your child and about the best strategies for building your retirement savings.

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