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Across the Decades: Financial Advice that Spans the Divide

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Whether we want to admit it or not, we all need sound advice: Sometimes we seek it out; others, it finds us. But when it comes to finding reliable financial guidance, the source plays a key role. Like other giants, the financial industry tends to neatly package us into categories, based on age, social status, etc. And while there is some merit there, let’s be real: People will always defy what’s expected. We’re affected by life, and that’s ever-changing. And because finances are so ultra-specific to our personal situation, it all needs to be on the table first, before opinions—however well-informed—are given.

That said, it can’t be denied that at certain points of life, we do share common financial concerns with our peers. And while we’re not about ‘boxing’ anyone, using defined reference points as developmental markers of sorts, well that’s just helpful; it gives us a base to work from. That disclaimer laid bare, let’s take a look at some common recommendations for all of us—those just starting out, to the financial ‘old-hats.’ Because truthfully, there will never be an age at which finances aren’t on our mind, and don’t affect our daily life and future. Another truth: Good advice never goes out of style, and it ages pretty well too. Let’s get to it.

20s, 30s: Laying Groundwork, Building a Foundation

All you young’uns belong to a generation with arguably the most financial challenges, but also quite an array of opportunity. Instead of betting on the lifetime job with the pension, annuity and health benefits in tow, you’re often relying on your own financial agility and homespun methods to get through. Here is where tried and true advice from friends, mentors and family members can be the path that leads to higher ground.

Take a look at media portrayal and you’ll find that your peers are presented as having either an idealistic, pie-in-the-sky approach to financial planning, or a money-hungry, live-for-the-moment mindset. Neither is healthy, and neither is true of the majority—you, like everyone else, are just trying to get by, maybe save up if you can afford it. The scary thing is, waiting on saving could hurt.

Here are some actionable tips to get you on your way:

• Build, grow, and build some more Likely you’ve heard of compound interest—these math-major calculations show time and again that starting to save, invest or contribute to retirement accounts early spells big gains in the future. And we’re not talking hundreds, but thousands, hundreds of thousands. It’s proven time and again that when you begin to save will most always outweigh larger investments later in life—they just can’t compete.
• Two words: Employer matching When your company wants to give you free money towards your future retirement, it’s a no brainer. Sure, you’ll have to sacrifice a bit more of your pay right now. But as you watch savings grow, you’ll feel justified. And come time for retirement, you’ll know you’ve done this well.
• No excuses You think putting cash away is hard now, what with student debt and the like? Try adding in a mortgage, wedding, children, etc. and you’ll see why now is the ideal time to start.
• Risk it While you’re caught in it, market fluctuation can be terrifying. But the truth is, markets always even out and provide returns, over time. And that’s why an aggressive investment approach while you’re young—with less responsibility and a long stretch of time till retirement—is very doable, even recommended. You have your entire working life to recover, rebuild, and stockpile. Working with your family’s trusted investment advisor can help you to make sound decisions.
• Here’s the bottom line Money is hard to come by, treat it well. It’s exciting to finally have a little extra cash, we get that. But a few good decisions today could tip future scales seriously into the positive—Stay with it!
• Debt is not a friend Sure, it’s a convenient (and common) way to solve problems and get by, but being under a lender’s thumb can be an ugly feeling. Fight the trend! Pay down high interest debt first, and then you’ll be pocketing (and saving) all the cash you’d otherwise be giving away in interest.
• You or them Both, if possible. But you, for sure. If you don’t have a solid retirement savings plan, worrying about kids’ college tuition is frankly out of place. And yes, this sounds callous, but let’s project down the road. There will always be avenues to fund an education; think scholarships, grants, subsidized loans and otherwise. But there won’t always be the necessary capital to fund your retirement. You’ve got to take care of you—otherwise caregiving and daily expenses could end up being a suffocating financial burden on the very people you want to help.

Let’s speak for a moment to the ideological side of things:

• Develop a plan A natural part of growth is the shift from an insular outlook, to a comprehensive world view. The same goes with finances. Understanding how each purchase affects your overall “plan” will give you control, and a broadened viewpoint. And remember, life is constantly changing: Write your financial plan in pencil, not stone.
• Make it real Focusing on immediate use of funds is tempting and fun, but you’ll miss out later on. Daydream about possible future goals. How much money will you need to attain these? How do you hope to accumulate said reserves? While no one can do this for you, advice and a listening ear are always at the ready.

These are financially selfish years: Pay yourself, save, dream big. You’re paving the path to the future you dream of, and that takes hard work and concentrated energy. In a way though, these are also selfless, responsible years. Because ultimately, all the self-focus now enables you to become the giving parent, the generous grandparent, the person you really are. Groundwork laid, let the building continue.

40s, 50s, 60s: Tightening Reins, Focus on Others

You got through the worst of it. A hearty pat on the back and toast to your success—Your determination and sense of discipline are something to be proud of!

For so many reasons though, life has been pretty hectic up till now. And likely, it always will be. But now you’re more experienced; you know how to handle things, including your finances. Retirement account(s) established, debt on the downward trend, and a real, actionable financial plan in place: You’ve got it covered. But now’s when some tweaking is a good idea. You’ve seen how your budget shifts, and you have to adjust accordingly. Well, it’s about to happen again. This time, age is a factor, risk is involved, and generosity is a priority.

• Double A Asset Allocation, that is. Now that the gap is narrowing between you and your retirement, lowering risk while increasing ‘safe’ investments is what’s generally recommended. However, with all of us living longer, and with the variables specific to your situation, an outside voice of reason is always welcome. Because on whose hand are ‘rules of thumb’ measured, anyway?
• Pay Up Remember how before, you had to scrape up $50 to stash away? Well now, that $50 is a surplus. Use it wisely, and “round up debt.” You’ll shorten the life of a loan or mortgage, and save a boatload on interest.
• Protect yourself This is about being realistic—healthcare is an expense that will grow as we age, with in-home care as a possible eventuality. Is your retirement plan prepared for that? Are you? A pivotal part of a successful financial plan is envisioning your future—realistically—and planning accordingly.
• Status Quo These decades, more than anything, are about sticking with it, and making adjustments along the way. Keeping your emergency fund well-padded is also necessary. This is the long, slow road that will build the funds to support nearly a third of your life. Hang in there.
• Get and Give Remember when you felt selfish, developing a retirement plan over saving for your kids’ education? Well, now’s the time to make up for it. Investigate available college funds for children and/or grandchildren, and look into developing a legacy to eventually leave to loved ones, or to a cause close to your heart.

You put in the work, made the sacrifices, and took some incredibly responsible financial moves. Now, as you look forward to retirement, you can be sure that regardless of any setbacks along the way, the struggle was worth it. You’re a success story—truly an example worth imitating.

Age of Reason

Given the intricacies of life and finances, and your varied needs over time, a solid financial plan is more fluid than static. It’s all about adjusting, moving with the times. Ultimately then, the issue becomes quality over quantity, personal focus over the deafening onslaught of useless “advice.” Because while your ideal direction is determined by your personal needs, goals, and dreams, steady guidance depends most deeply on tried and true financial knowledge. Thankfully, that flexible approach is right at your fingertips.

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