Three Financial Stages of Life—Plus the Goals to Accomplish in Each One

As the saying goes, Rome wasn't built in a day—and neither is your financial wellness. Instead, building your savings and financial security is a lifelong process that spans your entire career. Admittedly, building your retirement assets might not be the first thing that comes to mind when you land your first job or cash in that big paycheck, but it's important to have a basic understanding of your financial goals and milestones. "You may have a financial goal to purchase a home before you reach 30 or pay off your home before you reach the age of 60," explains Kemberley Washington, a CPA and personal finance expert with Forbes Advisor. "Both age-based goals can help you to determine if you are on track with your financial goals at any given time."

Here, two personal finance experts share the three crucial financial stages of life, as well as the goals to set for each one. While these professionals offer sage advice for navigating your finances, they both made one thing very clear: Your personal finances are personal. "Remember, your journey is your journey," explains Washington. "This means that it looks different for everyone. As you continue on your journey, consider your personal goals that may have a long-term impact. Consider incorporating goals such as planning (or saving) for a child, purchasing a home, saving to start a business, creating a budget that may include self-care or health needs, and giving to a cause that is close to your heart."

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After dozens of internships, resumes, and interviews, it finally happened: You landed that big job. Whether you're entering the workforce for the very first time or slowly climbing up the corporate ladder, the first few years of your career are a very exciting, but it's also a critical time to lay the groundwork for your financial future. "Understand your credit score and work on getting it to the 720 range," says Lindsay Bryan-Podvin, LMSW, financial therapist and author. "Understand your student loan number, interest rate, and any associated payment plans. Start investing in retirement. You have the power of time when you are younger to make your contributions work harder for you."

Bryan-Podvin says it's also a good idea to think about your financial goals for the next five to 10 years—and start saving for them. Truthfully, saving for the abstract future can feel a little boring—especially when you're experiencing your first brush of financial freedom. That's exactly why Bryan-Podvin recommends saving with a specific goal in mind. "Saving because you want to rest at night knowing if you lost your job you'd be okay for a month, fly your mom to visit you post-pandemic, or buy that new laptop are better reasons," she says. "I'm a fan of renaming savings accounts to match my savings goals and encourage my clients to do the same. For example, if I'm saving for an Aegean vacation, I'd rename my savings account 'Greece 2022.'"

Let's fast-forward 10 to 15 years, into your mid-career, shall we? Whether you earned that big promotion or feel a little more secure in your career, this phase is a great opportunity to think about the here and now. According to Washington, your mid-career is a great time to invest in your future be it focusing on your business, family, or even higher education. However, it's important to keep your future in mind, too. While you'll want to continue to build your savings, it's also important to think about the logistics of your next big milestone. "Get all of your 'life' documents in order," says Bryan-Podvin. "A will, trust, durable power of attorney, and life insurance are must-haves if you are seriously partnered or have children."

Speaking of which, it's possible that you have a significant other or family in your mid-career. Instead of keeping your financial goals to yourself, share them with your partner. That way, you can understand your joint, long-term goals and work together to hold each other accountable. "If you are in a relationship or part of a larger family, consider meeting with your loved ones to discuss finances once per month," says Washington. "If you have a small business, start your day with a 'to-do' list where you can see your financial goals on paper and get an idea of the action steps you need to take daily."

After decades of working, spending, and saving, your retirement is just around the corner. (Congratulations! You've worked hard for this big milestone.) But just because you're ready to retire doesn't mean you have full reign on your savings. Instead, it's important to be strategic about how you use your money. "Meet with a financial advisor to make sure you have an understanding of how much money you can safely withdraw each year to ensure you won't be cutting it close," says Bryan-Podvin. "Strategize whether it makes sense to take your social security benefit at 62 or 67 years old."

Washington says your pre-retirement phase is the time to re-establish gift-giving strategies, reallocate investment assets, as well as review pension, retirement, and social security income projections. While you're at it, it's also a good idea to review health and long-term insurance needs. That said, transitioning into retirement isn't as smooth as most people think. Not only will you have a lot of free time on your plate, but you'll also need to have upsetting (yet necessary) conversations about the inevitable future. "If you have adult children, have 'the talk' with them about your plans in the event of your passing," adds Bryan-Podvin. "Make sure they know where all of the "life" documents you created in mid-career are and how to access them."

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It doesn't matter if you're in your early career, mid-career, or pre-retirement, one thing's for sure: It's important to save. Washington recommends saving the equivalent to your annual salary in your 30s; two to four times your salary in your 40s; six to seven times your salary in your 50s; and eight to 10 times your salary in your 60s. "I like to say, 'No one deserves your money more than you,'" she explains. "That means before you pay anyone else, pay yourself."

Since no two people's financial situations look alike, it can be intimidating to stash away a couple thousand dollars each decade. However, Washington recommends streamlining the process. "Set up automatic saving drafts from your paycheck to save without any thoughts," she recommends. "This also helps if you lack the discipline to save. Save in a high-yield account that is separate from your checking account."

Ideally, everyone would be hitting their financial goals without any guidance. However, you might feel a little behind on prepping for your financial future. Don't worry, Washington says that's inevitable. "Because we do not live in a perfect world and financial challenges will likely come up, there is a chance you may feel that you are not meeting all of your goals," she says. "Be patient with yourself!"

If you're having a hard time reaching your financial goals by yourself, Washington recommends enlisting a professional to help guide you on your journey. "[Also], think about what is working for you—and more importantly what is not working—and pivot," she says. "Start over if you need to, but don't give up!"