Money Management Tips

Written by Sarah Provost
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Money management tips are easily available from both online and print media sources. However, money management is not a one-size-fits-all proposition. If you've just graduated from college, you don't need to be reading reams of material about long-term care insurance and retirement plans. Similarly, if you're concerned about retirement, information on how to buy a first house is not likely to be of interest. Here are a few of the most important money management tips for different stages of life.

Money Management Tips for Young Adults

The first thing you need to do when starting out in your adult life is identify your goals, both long and short term. Where do you want to be in five, ten or twenty years? Buying some furniture or paying for a wedding might be a short-term goal, and eventually you'll probably want to buy a house, perhaps save for your children's education, and provide for your retirement. Once you've identified your goals, start saving towards them. Take advantage of any tax-deferred programs offered by your employer, and remember that if you start investing in your twenties, compounded interest can provide you with a very nice sum even if you stop saving later on.

People in their thirties and forties are traditionally concerned with family finances. Now is the time to look again at your medium and long term goals, evaluate your progress and make adjustments as necessary. If you want to finance your children's education, take advantage once again of the power of compounding interest and start setting money aside when they are very young. If you're changing jobs, don't make the mistake of withdrawing your 401K or other employer investment monies--roll them over instead. Now is also the time to take a hard look at your retirement plans. Remember that people these days retire earlier and live longer, so you may need more money than you first thought.

In your fifties and sixties, you are probably no longer supporting children and are earning at your peak. If you've followed the previous money management tips, you should be in good shape financially. Find out how much you can expect from social security and your pension. Don't forget to factor in increased expenses for health insurance and prescription drugs. Finally, since the ways in which you withdraw your retirement funds can have a powerful effect on the taxes you'll pay, it is a good idea to consult with a financial planner to make sure you've covered all your bases.


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