Your Financial Checklist For Every Checkpoint

Improving our financial situation is something we can all relate to, whether you’re in your 20s, 30s, 40s, 50s or older. Whatever life stage, there’s likely certain milestones you want to achieve. One of the most effective ways to make it happen is to create a list of goals for the next 5-10 years. Committing to a set of goals and reviewing them regularly actually gives you a 95% higher chance of achieving what you want. But like most, you’re probably questioning ‘where should my finances be at my age?’ and ‘what goals should I be working toward?’

Take the guesswork out of your goals. We asked all our experts for their take on different life stages. All you have to do is work on making them happen.

YOUR 20s

  •   Establish a budget

This is one of the most effective things you can possibly do for your finances in your 20s. Once you’re bringing home the bacon, you need to know how to slice it up. Without a budget, you’ll risk overspending on discretionary items and under-saving for important big-ticket purchases. Here’s how to figure it out:

–          Write out all your daily expenses (commuting, food costs) and recurring monthly payments (rent, utilities, debts).

–          Factor in your short (upcoming event/trip) and long-term (saving down payment for a home) savings goals.

Seeing everything laid out will open your eyes to what is being spent on what, and from there you can adjust your spending accordingly. Always on the go? Digitize your findings with apps likethese.

  •   Get rid of high interest debt

We’ve said it before and we’ll say it again, nothing will hold you back more in your financial goals than having debt. Of course, having debt is a reality but letting it linger can set you back years in your finance goals. Your best bet is to establish a debt repayment plan, and reign in spending (see goal #1-budget) to get back on track. Also, don’t forget to explore some programs designed to help you with what you owe.

  •   Start building an emergency fund

No matter how you define ‘emergency’, you’ll be thankful that you were putting money aside when that inevitable thing comes up that is going to cost you some bucks. A good guide to go by is to stash away about 10% of every paycheque until you reach your goal, which should be around 3-6 months of income. Do this and you’ll have peace of mind knowing that even when all else fails (insurance coverage, parental help) you’ll be able to handle the damage.

YOUR 30s

We like to think of your 30s as the decade that you finally ‘get it together’. You already know that you need to contribute to your RRSPs and work on chipping away at your debt, but there’s a few other things you should add to your financial checklist that you may not have considered:

  •   Adjust your insurance coverage

As your assets start to grow, it’s likely you’ll need more insurance to cover them. Now is a good time to double check your home insurance on that new place or auto insurance on your updated vehicle. You may  even starting to have some loved ones that depend on you financially, so you’ll want to make sure your life insurance is up to par as well.

  •   Diversify your investments

This decade is the perfect time for you to diversify your investments. Now that you have the basics settled (emergency fund and other necessities) you can start to take on more risk.

A well balanced portfolio can do wonders for your wealth. The tricky part is to not overpay your fees.

At transcend, we know the trick is to pay for the performance of your portfolio; this way, you’re only dishing out for fees once you’re seeing returns and growing your wealth.

YOUR 40s

If you’re in your 40s, you’re probably already used to balancing your income.  The challenge now is to balance your financial future with theirs (children, dependant family members, spouses) while still making sure you’re properly protected for retirement years.

  •   Balance financial futures

Resist the urge here to halt retirement saving contributions while you build a nest egg for your children’s education. Almost unanimously, financial advisors agree that this can really set you back. Even if your contributions are minor, it’s more effective than halting it altogether. Luckily for your children, they can borrow for their education, but you can’t borrow for your future.

  •   Organize your estate plan

If you’re approaching 50, it’s time to bite the bullet and write your will and plan your estate. The harsh truth is if you aren’t planning for what happens to your assets after you’re gone, somebody else will (and that somebody is often the government). Set up an appointment with your advisor to make sure your finances are on track and then meet with your lawyer to plan out the specifics of your will.

YOUR 50s

Ahhh, retirement is finally on the horizon. Don’t mess around now or lose track of your financial goals. This is your time to make sure everything is in place for a wonderful retirement, so keep your eye on the finish line.

  •   Invest strategically

You’ve got the funds to back it up, so get picky about your investments and use this opportunity to grow your wealth. Some 60% of investors have no idea what their advisers are paid. Chooselow-fee investments that are structured to help you gain maximum returns. Were you born before 1965? You’re likely part of the group of baby-boomers set to invest a hefty sum from elders. Use it wisely and this investment is the perfect opportunity to amp up your wealth, secure your financial future and even leave your family with some peace of mind.

  •   Combine TFSAs with your RRSPs

By now, hopefully you’ve been contributing to your RRSPs for years and likely have a healthy nest egg resting there for your post-work years. Use this decade before your 60s come to make regular contributions into a tax-free savings account (TFSA). Your TFSA will give you that freedom you’ll crave in your older years-withdraw when you want with no tax impact and contribute as you want after one calendar year. With both of these savings in your corner, it won’t be long until you’re finding gold in your golden years.

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