Every decade of your life brings fresh challenges, and as your experience, education, and expertise increases over the years of working, so too should your income. As such, the financial goals of your twenties, when you’re finishing up your studies and getting your career established, are substantially different to those of your thirties or forties and so on, as you progress through the decades until you’re entering retirement.

To help you ensure that your finances remain on track short-term lender Wonga has summarised what your financial goals should look like as you age:

Your twenties
During your twenties, you should aspire to become financially independent, stop relying on mom and dad and start fending for yourself. Get a job and pay your own rent and bills. This means learning to budget and live within your means.

Develop a retirement plan and start contributing to it – the more you put aside at a younger age, the more your wealth will grow over time. It’s also a good time to start paying off your debt such as car or student loans as well as learning to be responsible with credit cards so that you can enter your thirties as debt-free as possible.

Lastly, remember that just a few nights in hospital can set you back hundreds of thousands of Rands so get your health insured and start an emergency fund so that you’re covered if life tosses you a curveball. This should consist of enough money for you to live on for three to five months without any income.

Your thirties
This is the decade to clear your financial plate of all debt that’s not related to property (i.e. non-bond debt) and grow the money you have by sitting down with a financial planner to plan investments.

If you’re a parent, have your last will and testament drafted and get life insurance so that your family will be taken care of should anything happen to you. You should also start saving for your children’s tertiary education to give them the best possible start at life without being saddled with debt.

Start saving up for a down payment on a house – the bigger the down payment, the lower the interest you’ll have to pay and the quicker you can pay off your home.

Continue contributing to your retirement fund – in your thirties, you should have at least the equivalent of your annual salary in savings.

Your forties
As your children get older, you should ensure that your savings plan for their tertiary education is on track.

It’s also important to re-evaluate your household budget to accommodate your shifting lifestyle and expenses and revisit your will and policies to ensure that they’re up to date.

Lastly, diversify your investment portfolio with the goal of spreading your risk and increasing your returns and continue contributing to your retirement fund. By this time, you should have at least three times the value of your annual salary in savings.

Your fifties
Once again, it’s time to revisit your will, policies, financial plan, and household budget to ensure that they’re up to date. Focus on paying off your house and, if your kids have moved out, perhaps consider downsizing.

Possibly consider changing your health insurance plan to provide you with the most appropriate coverage for your age and physical condition and investigate long-term care insurance. It’s not pleasant to think about but you need to have a plan in place for when you and your spouse become too old to take care of yourselves.

Review your retirement annuities and continue contributing to your retirement fund – in your fifties, you should have at least five times your annual salary in savings.

Your sixties
By the time you retire in your sixties, you should have at least eight times your salary saved. If you’re still fit and happy to work, you absolutely should. Alternatively, consider looking into part-time employment to subsidize your retirement annuities. Work keeps you active, your mind sharp, and provides a tremendous sense of purpose. Also, investigate whether you’re eligible for government social assistance services – it wouldn’t hurt to receive an additional monthly contribution.

Lastly, it might be time to look into trusts so that the legacy you leave behind will empower your children and your grandchildren to achieve their dreams and goals in life.

Article credit: https://www.moneyweb.co.za/mymoney/moneyweb-personal-finance/financial-goals-for-the-decades/