9 simple savings milestones to strive for in your 20s, 30s and 40s

Your 20s are a time of asserting your independence from your parents and building healthy financial habits that will prepare you for the future. Paying off student loans might take up a big part of this decade, as might preparing for first-time homeownership. To get there, follow these tips:

Build your credit

A healthy credit history and a high credit score is key in getting a car loan, home mortgage or even an apartment rental. It can also save you money in the long run by making you eligible for lower interest rates and promotional offers on credit cards. Sign up for a credit card to build your history, but make sure to pay off the balance on time and in full every month. You can do this by charging small, predictable monthly expenses you know you’ll be able to pay off, like your phone bill or utilities. To keep track of your score, you can sign up for a free credit report every year through Equifax Opens in a new window..

Start an emergency fund

Having money in an emergency fund to pay for car repairs or surprise medical bills means not having to charge unexpected expenses to a high-interest credit card, which can cost you more in the long run. In order to take advantage of compound interest, aim to set aside at least a few months’ worth of living expenses in a tax-free savings account Opens in a new window.. This is especially important if you’re among the 17% of Canadians who participate in the gig economy.

Pay off student loans

Once you graduate from your post-secondary program and have secured a job, set up a repayment plan through your financial institution that can help you steadily chip away at your debts.

Your 30s are typically a time of bigger, more frequent expenses like weddings, down payments for a home and furniture, and saving for your kids’ education. But it’s also a decade where you’ll probably secure greater income, along with opportunities for savings, investment and wealth generation. Here’s how to manage it:

Set up separate bank accounts for your household and children’s expenses

If you’ve decided to get married and have kids, you’ll need to adjust your budget accordingly. Make sure your budget is realistic enough to meet your family’s needs, including daycare costs, seasonal activities and a post-secondary education fund. It’s never too early to start saving for your kids’ futures.

Pay off any non-mortgage debt

Aim to clear any outstanding student loan debt, car loans and other bills by the end of this decade so that you can free up more income for savings, investment and retirement planning.

Allocate 10 to 15% of every paycheque toward retirement

Start thinking about and saving for your retirement now. The earlier you start planning, the more comfortably you’ll live 30 years down the line. As part of your retirement planning, you may want to make an appointment with a financial planner who can help you put together an investment portfolio, understand how your pension works and figure out how much to contribute to your RRSP. Other logistics you should consider include drafting a will and naming your beneficiaries, especially if you have children.

There are plenty of expenditures and life changes that come with hitting your 40s, from paying off mortgages and education costs to finally buying that summer cottage you’ve always wanted. It’s important to not let retirement planning get lost in the shuffle, especially as Canadian life expectancy continues to rise Opens in a new window..

Ensure your children are ready for the responsibilities of adult life

In your 40s, your children may only be a few years away from college or university, so now is the time to get them involved in planning for this major expense. You can help them build financial responsibility by asking them to craft a savings budget or consider getting a part-time job.

Revisit your household budget and retirement portfolio

As your expenses and your income change, make sure you’re not ignoring other areas of your financial plan. Keep working with a professional to ensure you’re on track for a comfortable retirement.

Update all your paperwork

This insures your will, life insurance and other relevant policies are up-to-date. Keep in mind that each province and territory has different laws for wills. Life changes, like getting married, divorced or separated, can also affect your will. Consider setting an annual reminder in your digital calendar to ensure your current situation is reflected in your will Opens in a new window..

Planning for your 20s, 30s and 40s doesn’t have to be complicated or intimidating. Even if retirement still seems eons away, following the simple steps above can help you hit financial milestones with ease.