Money Milestones for Each Decade of Your Life

While there is no one-size-fits-all approach to money, there are tried and true methods to building wealth and “when” to do “what”.

Consider this a compass, not a map. A marathon, not a sprint.

Also, my lawyers would like me to remind you that this is not investment advice. In fact, this is terrible advice in general because it will only work for a fraction of lucky people. But guess what? The younger you are, the luckier you are because time is on your side so let’s start with the luckiest group of all – teenagers:

Money Milestones in Your Teens:

Get a part-time job during high school and spend your entire paycheck on energy drinks and gas for your hand-me-down car. There is no greater joy than earning a bit of money joking around with friends at work. Very little responsibility and time well spent making fun of Karens.

This teaches you how to file taxes, forces you to open a bank account, and gives you real-life experience for when you want your first job after school.

Go to a Community College or Trade School after high school if you don’t want to sign up for 20 grand worth of student loan debt per semester. Take 2 years worth of classes and transfer all the credits to a four year university. Your degree will only say the name of the university at which you finish.

Find a hobby you can do forever. You may even be able to turn it into a side hustle down the road. Something like guitar, woodworking, or writing. Hobbies you CANNOT do forever include skateboarding, drinking, and tackle football. It’s not that you shouldn’t do fun stuff that’s hard on your body, but you’re going to regret it when you’re 50 and have nothing interesting to do on the weekends.

Stay out late but pack a sandwich and a gallon of water.

Open up a credit card and turn on auto pay in full each month.

The longer you have a line of credit open, the higher your credit score will be. This makes things like buying a car, renting an apartment and borrowing money easier in the future. So, doing this in your teens is the best time. Here’s how to get a high credit score in general.

Money Milestones in Your 20s:

In your twenties, one of the underappreciated benefits of a late-stage capitalist society is that companies will pay you to learn on the job.

Knowledge is accumulated from the very bottom. You are not worth very much to a corporation, even with a prestigious degree. So use this time to learn by doing and making mistakes.

Listen to older investors, but don’t worry too much about their opinions on new assets or technologies. They are experts on a previous version of the world.

Open a Roth IRA for yourself, separate from any company. I invest in VTI with mine. Try to max it out each year. You won’t have to pay taxes on the money you put in or the gains when you retire. Forty years of compounded tax-free growth is the single best cheat code for personal finances.

If you do have the option of a company-sponsored 401(k) or 403(b), take it and get the match at a minimum. And whatever you do, don’t close it out when you switch companies. Transfer it to your new job.

Whatever you do, just get your money in the market. Don’t just buy the dip. Buy every dip.

Money Milestones in Your 30s

Buy high quality tools. There’s a saying, “buy cheap, buy twice”.

Invest in your health. Gym memberships and healthy food cost more up front, but may save you tons on medical bills down the road due to dietary diseases.

Try to ignore the urge to buy a big brand new SUV just because everyone else has one. If you must buy a new car, buy a car coming off lease and add an extended warranty. I believe this is the best combination of peace of mind and affordability when it comes to car purchases.

Negotiate every salary you are offered.

Ask for a raise when you notice your salary not keeping pace with the market and your skills.

In your 30s, you will be paid to execute. Tell a compelling story about how your execution skills are saving or making a company money. If they don’t agree, look for another job. Changing jobs is a great way to boost your salary.

Start your own company. Even for just a few hours a month. Even if you are cash flow negative. Even if you don’t incorporate it. You are your own brand. Build it.

Money Milestones in Your 40s:

In your forties, you will be paid for who you know. This is the main accumulation phase for most people. Try to forge a network of people that trusts you and likes working with you by this age. Being able to rely on past and present colleagues to help you land a new job may save your neck if you are laid off.

Pay down your mortgage if you own a house and resist keeping up with the neighbors’ flashy purchases. You have no idea how much debt they have or what inheritance their parents left them.

Teach your kids the association of hard work and earning money by paying them for chores and helping them invest.

Don’t lie to your kids by saying “we can’t afford that”. Instead, take the time to explain that you choose to save your money for rainy days or spend it on more meaningful things like memorable vacations or home security.

Money Milestones in Your 50s:

You can make up for not investing earlier by saving more now.

Most Americans in their 50s can’t park in their two car garage because it is filled with junk. Have a fucking yard sale.

Switch your Roth contributions to Traditional ones. By this age, the long term benefit of a Roth account is much less than when you are younger.

Pay attention to what your kids and the younger generations use everyday. Chances are good it will be very different than what you grew up with and it may represent excellent investing opportunities. Smartphones are a great example of this. A decade ago, everyone in their 50s was either stuck on flip phones or Blackberries while iPhones quietly made Apple the most valuable company in the world. Slowly, then all at once.

Money Milestones in Your 60s:

Downsize from your house to an apartment or condo. Let someone else deal with the leaves and the snow now.

Don’t concentrate your money in a few stocks. It seems like a great idea during a bull market, but bull markets don’t last forever. Diversify into funds that hold bonds, equities, and even cash. There’s just no reason for outsized risk when you are no longer in an accumulation phase of wealth building.

If you’ve been responsible with money for your entire life, now it’s time to learn how to enjoy your money. Live a little. Retire and travel. Move to a new state. 60’s the new 30.

If you haven’t been great at saving for 40 years because life got in the way, that’s fine too. A few smart decisions about where to live and what to drive go a long way to stretching your social security dollar.

That said, put off withdrawing from social security for as long as possible. This will make each withdrawal as big as possible.

Use your money to make a difference in younger people’s lives. I’ll never forget the older woman who tipped me every time she picked up her pizza when I was a teenager working part-time at a pizza shop. Very few people tipped, there wasn’t even a tip jar. But she would give me 5 or 10 dollars every time she came in. She doesn’t even know how valuable that was to me. I remember and am grateful for her generosity to this day. You can be that saint to someone at a store you frequent.

Money Milestones in Your 70s and Beyond:

Get the highest yield possible on your cash. I know you’ve spent most of your life keeping your money at a brick and mortar bank down the road. But they have huge overhead costs for all those buildings and tellers and pay very little interest compared to online accounts.

With rates where they are at this time of this article, you could be earning over 3% interest on most online savings accounts. True, you cannot walk into the bank, but they have customer service numbers, security controls, and prestigious institutions holding the money.

Ben Carlson recently wrote a great article about how and where to get a better interest rate on your cash safely.

Make time for estate planning.

Ensure you have a beneficiary and a secondary beneficiary setup for every financial account you have.

Simplify your finances for yourself and your children.

Watch out for scams. Particularly from people who sound like they have your best interests in mind.

Spoil your grandchildren if you have them.

And, of course, give the clouds a good talking to once in a while: