Smart money moves for all ages

Hoepfully, you enjoyed hearing finanical advice from young to old and from old to young. I couldn't help but notice the similarities in their advice—it was a good reminder that the basic rules still apply. However, we all know that when it comes to budgets, one size does not fit all.  After all, your life is probably very different than it was five or ten years ago and changed circumstances call for a changed financial plan. Following are some smart money moves for any life stage.

20s and younger
Members of Generation Y are entering the workforce and comprise the largest consumer group in American history.  Unfortunately, there is evidence that Generation Yers can expect to struggle with student loan and credit card debt.   If you are in your 20s, set yourself up for financial success by using credit responsibly.  A 2008 report from Mintel reveals that 69% of Generation Y workers who can participate in a tax-deferred 401k retirement savings plan are not. If you are in your 20s, buck that trend because now is also the perfect time to take advantage of compound interest by establishing a retirement savings plan.

Generation X is sometimes referred to as Generation Debt and for good reason—9 out of 10 consumers in their 30s are in debt, according to the Federal Reserve's 2007 Survey of Consumer Finances.  Coupled with student loan debt and increased housing costs, many 30-somethings have a tough row to hoe.  If you are in your 30s, make sure not to acquire more mortgage debt than you can afford and make a concentrated effort to repay education loans.   Also, in addition to retirement savings, be sure to establish an emergency savings cushion so that you do not have to rely on credit.

Regardless of whether you are a member of Generation X, the Boomerang Generation or consider yourself a Baby Boomer, many 40-somethings are facing unique financial challenges.  Fortunately, workers in their 40s are likely entering their peak earning years making this the ideal time to secure their financial footing.  If you are in your 40s, paying down debt is imperative.  Do not be tempted to take on a lengthy mortgage loan that will haunt you in the future.  Now is also a good time to review your retirement goals to make sure you are on-track.

50s and beyond
Three out of four American Baby Boomers surveyed for The Hartford's 2008 international retirement survey say in that they were "not too" or "not at all" confident that their sources of income for retirement will be sufficient. If you are behind on your retirement goals, it is time to play catch-up.  In The "catch-up" contribution limit was raised to $5,500 for 2009.  Also take the time to prepare or update your will and other important legal documents.  As always, maintaining adequate health insurance is a must.

Finally, consumers of all life stages should seek needed advice from a professional credit counselor or financial planner.  After all, a lifetime of financial security is priceless.


Kim McGrigg is the former Manager of Community and Media Relations for MMI.