Money at Every Age

No matter what age you are, money is a large part of your everyday life and your future.  Whether younger, older or anything in between, Cotton Candy wants you to manage your finances with care at every age. Simply put, time is money.

Cotton Candy contributor Ornella Grosz, author of Moneylicious: A Financial Clue for Generation Y, tells us how to leverage our cash in our 20s, 30s, 40 and 50s.

Cha-ching!

20s: This is the best time to take control of your money so it doesn’t control you later on in your life.

– Negotiate your first salary. Sometimes the salary is fixed, so consider other benefits such as work-from-home flexibility, health and dental insurance, vacation, sick leave and education reimbursements. Avoid the mistake of not emphasizing your internships, technical expertise, summer jobs that can positively impact your ability to do the job.
– Check up on your money.  Knowing how you spend your money will produce greater results for investing, saving for various purposes and controlling your expenses.
– Pay yourself first. Automate contributions to your savings and retirement. Contribute a certain percentage toward your retirement. When you receive an increase in your salary you will automatically increase your contribution.
– Project the next five years. What do you want to accomplish? Paying off debt, buying your first home or travel? Setting goals will give you long-term vision and short-term motivation.

30s: You may be experiencing major life changes, such as starting a family, looking to buy your first home or expecting a baby.

– Prepare for the what-ifs in life.  Have adequate homeowners or renters insurance, health insurance, disability insurance, and life insurance.
– When looking to set up a 529 plan for your children, always keep in mind that funding your retirement should be a priority.  In addition, consider a Coverdell Education Savings Account (ESA) account.
– Seek professional help.  A financial consultant can provide advice and assistance for you and your family to develop a comprehensive plan to meet your financial needs and life’s goals.  You can search at National Association of Personal Financial Advisors – fee only: napfa.org and Certified Financial Planner: cfp.net/search.
– Set a plan in motion for retirement. Your twenties were the time to start your retirement with whatever amount you could begin with. Time is still on your side. Know how much you will need to sock away for retirement.

40s. Your children are growing up, retirement is inching closer and closer, and now is a critical time to make sure your financial objectives are on track.

– Kick your retirement into high gear. If you have contributed at least 10 percent of your gross income in your 20s and 30s then you need to kick it to 15 to 20 percent of your gross income.
– Minimize your risk in your portfolio and consider other financial products.  This is a good time to estimate how much income you will need for retirement to better prepare yourself.
– Consider other streams of income.  Dividend paying stocks and annuities can help you produce an income for retirement.
– Changing careers?  Experts say now is the better time do so. Remove out-of-date skills and look for jobs requiring 10 to15 years experience. Avoid listing your college graduation date; it’s not a requirement.

50s. Most people by this time have children that have left home. You typically are earning a higher income and can focus more intently on your retirement.
– Consider long-term care insurance. It’s cheaper than waiting until your 60s.  The National Association of Insurance Commissioners has resources to provide you with information on long-term care insurance on their Web site: naic.org.
– Maximize your retirement contributions.  If you are age 55 or older use the “catch-up” provisions on naic.org.
– Fine-tune your financial plan.   It’s imperative you review, adjust and update your financial plan, including your estate plan. Consult with a financial professional and estate planning attorney.