Personal Financial Milestones
Managing personal finances can be challenging especially with conflicting advice from family and friends. To help you stay on track here are key financial milestones you should aim to achieve by ages 30 40 and 50.
By the time you’re 30…
- Have mechanisms in place for saving money. Start an emergency savings fund with automatic deposits.
- Be enrolled in a retirement plan whether it’s a company 401(k) or a personal IRA.
- Establish a solid credit history.
- Be in the process of paying down student loans if applicable.
- Maintain a credit card balance below 25% of your available credit. For example if your limit is $5 000 keep your balance under $1 250 to protect your credit score.
By the time you’re 40…
- Have at least 90 days’ worth of living expenses in your emergency fund.
- Save at least double your annual salary in retirement accounts. For example if you earn $40 000 aim for $80 000 in retirement savings.
- Maintain a credit score of 750 or higher.
- Be free of undergraduate student loans.
- Have a Will and Power of Attorney in place.
- Keep credit card balances below 15% of available credit.
By the time you’re 50…
- Have at least five times your annual income in retirement savings.
- Maintain short- and long-term disability insurance.
- Keep total unsecured debt under 10% of available credit.
- Be free of car payments.
- Owe no more than 50% of your mortgage and remain on track to pay it off by age 65.
