Financial Habits For Every Stage of Life

11 May 2023

Financial Habits For Every Stage of Life

Building A Foundation in Your 30’s  

Creating and sticking to a budget is a foundational practice when it comes to managing your finances. Budgeting helps you keep track of your income and expenses so that you can make wise decisions about how best to use your money. Regardless of income level, most people do not keep good records of how they spend their money.  Having at least a general sense of where your money is going helps you make adjustments to meet short-term goals such as an emergency fund or long-term goals such as retirement savings. Track spending in more detailed ways will help identify areas where changes can be made to reduce costs and increase savings. A budget should include both fixed expenses like rent or mortgage payments, as well as variable items like groceries, entertainment, and vacations. Making a plan for your money makes it easier to ensure that your spending aligns with your desired outcomes and family values over the long run.  One easy way to get started with budgeting is by using BentOak Capital’s financial planning portal.  Linking bank accounts and credit cards to the portal is a simple way to get an immediate understanding of how you spend your money.  Please contact a BentOak Capital advisor if you’d like to get signed up for the planning portal. 

Have an emergency fund. It’s important to have money set aside in case of unexpected expenses, such as medical bills or car repairs or a layoff. Building an emergency fund should be part of your overall budgeting plan and can help you avoid taking on unnecessary debt when faced with a financial crisis. If you do not have any emergency savings already in the bank, set a small goal of $1000 and then setting aside a certain amount from each paycheck automatically. Once that amount is reached, celebrate your accomplishment! The next step is to work towards an emergency fund equivalent to 1-2 times your normal living expenses (rent/mortgage, utilities, cell phone, and other recurring bills).  Again, celebrate this accomplishment! You’ve achieved something significant. Over time, if your family primarily has salary (W-2) income, it is reasonable to ultimately want 4-6 times your normal living expenses in your emergency fund. If you are self-employed, you should consider having more than that. Having an emergency fund can provide peace of mind knowing that any unexpected costs won’t derail your long-term plans and goals. Check out our Invest My Money Or Add To Savings blog for more information. 

Living Well in Your 40’s  

Setting goals for saving and investing is one of the best practices when it comes to financial success. Having a clear understanding of what you want to achieve financially will help keep you motivated and on track toward reaching your financial goals. Whether it’s setting aside money in an emergency fund, buying a house, or investing for retirement, specific goals can make all the difference in achieving them. Often the best way to start setting your family’s financial goals is to start with a family conversation around “what is most important to us as a family”. This is an easy way to start expressing your “why”. Then you can begin to determine the “what” – the lifestyle spending or experiences or things that align with your family’s desired outcomes are what make up your financial goals. Knowing how much money you need to save each month to meet those goals, and regularly tracking your progress along the way, can help ensure that these goals (and therefore the family’s values) actually happen. Understanding the importance of goal setting will go a long way in helping your financial future 

Financially successful people in their 40s understand the importance of living within their means and avoid taking on too much consumer debt. They are mindful of when they spend money, understanding that there are always opportunities to save, invest, or add to their emergency fund. An increase in income or decrease in debt is not always a sign to increase your lifestyle; be reasonable in managing your personal cashflow. Families with a healthy relationship to money tend to align their spending with their values and to spend less than they earn. 

Maximizing Opportunities in Your 50’s  

Tax-efficient portfolios can be a great way to reduce your tax burden and maximize the return on your investments. Leveraging tax-efficient strategies, you can save money in both the short-term and long term by minimizing taxes on capital gains, dividends, and interest income. With careful planning and an understanding of how different types of investments are taxed, you can create a portfolio that is tailored to meet your financial goals while reducing or deferring taxes as much as possible.  

Having a sound financial plan is essential for long-term success and security. By your 50’s, you can build on the strong financial habits set in your 30s and 40s. For many people, your 50’s are the time of maximum income, which means you likely have the ability to accelerate your savings and pay off any remaining debts. Additionally, your 50’s are a great time to begin thinking more seriously about the decades to follow. Following these best practices you can ensure that your finances are in order so that you can reach your short-term and long-term goals.  

Strategizing for Success in Your 60’s  

Retirement income planning is typically top of mind in your 60s. And if not, it should be. At this time in your life you will have the ability to make decisions about when to turn on Social Security, when to retire or if you can retire, when to sign up for Medicare, etc. The key is to develop a strategy on how to replace your salary and develop a retirement income plan. The key to being able to do this is getting a better understanding of what your expenses are going to be in retirement.  As with earlier life stages, the key is understanding your family’s desired outcomes: what do you most want, and why? 

Once you have mastered retirement and your retirement income strategy the next step is a legacy plan. What do you want your legacy to be when you pass on? Who do you want to inherit your assets? What values do you want to pass on to the next generation? Do you have your estate planning documents in order and do you have them in a place where your heirs can access them? Leaving a legacy can be an important and thought-provoking process; make sure you collaborate with a professional who understands your values.

With the right plan in place and dedication to stick with it no matter what life throws at you, reaching your goals is possible – so get started today! Contact a financial advisor today by giving us a call at 817-550-6750 or by emailing   


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.      

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More about the author: Stefan Simpson