Practical financial goals for every decade of your life


WHAT financial goals should you strive for in your 20s, 30s and until you retire in your 60s and beyond? Here’s a list that can serve as your guide.

In your 20s

Build an emergency fund. Ideally, this should be at least 6-months’ worth of your necessary expenses. If you achieve this, you would have also learned the habit of saving, which is essential for attaining financial independence.

Be a responsible credit card user. Being responsible means paying your credit card balance IN FULL every month and neither just a portion nor the minimum required amount. This will teach you how to properly manage debts.

Understand how paper assets work. I’m referring to time deposits, government and corporate bonds, UITF and mutual funds and the stock market. Learn what they are, how they work, why they exist and how you earn (and lose) money from them.

Establish a healthy lifestyle. Your unhealthy habits during your 20s will come back to haunt you down the road. Medical expenses are one of life’s biggest stressors; minimize them by taking good care of your body.

Start your retirement fund. Yes, start building your retirement fund as soon as you have income. It doesn’t have to be a lot; just an amount that’s comfortable for you. Put it in an equity fund.

In your 30s

Establish a strong and steady cashflow. People buy a car, get married, secure a home and start a family during this decade. You’ll need money to do all those things, which a strong and healthy cash flow from a career or business can provide.

Get insured. If you haven’t yet, then it’s time for you to secure the necessary life insurance and long-term healthcare insurance, especially if you already have your own family.

Build your paper assets portfolio. It’s now time to apply what you learned and build your investment portfolio. It’s best to diversify with low-risk, moderate-risk and high-risk types of investments; as well as a good mix of bonds, stocks and investment funds.

In your 40s

Create passive sources of income. You can’t work forever; that’s why you need to do this. Popular sources of passive income are real estate rentals, business dividends, royalties and commission income.

Design your retirement. At this time, you may already have a good idea of where you want to retire. Take it a step further and create a retirement plan; and see how much it will cost to turn your dream retirement lifestyle into a reality.

In your 50s

Work on your retirement plan. How do you see yourself when you retire? Running a small business? Traveling the world? Pursuing a new career? Whatever it is, it’s time to prepare your mindset and your finances for that chapter in your life.

Have no more liabilities. Retirement is just around the corner. Make sure that your debt obligations, particularly any loans you have, are paid in full before you retire.

Build enough passive income to cover your necessary expenses. You cannot depend on your retirement benefits alone. That is often not enough for your cost of living expenses. Augment your cash flow with passive income sources for a worry-free retirement.

In your 60s and beyond

Do estate and legacy planning. Memento mori; “Remember you must die.” It will eventually happen to each of us. Make sure that our loved ones won’t become financially burdened when it happens.

Realize your retirement plan. Whatever, wherever and however you wanted your retirement to be, it’s time to follow your plan. Don’t be afraid to redeem investments and surrender insurance policies, if needed. This is, after all, the ultimate time to enjoy all the money you’ve saved and invested through the decades.

Fitz Villafuerte is a registered financial planner of RFP Philippines. To learn more about personal-financial planning, attend the 93rd RFP program this January 2022. To inquire, e-mail or text at 0917-6248110.

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