Remember that old myth? The one about how every 7 to 10 years each cell in your body is replaced? The idea is that every decade you become an entirely new person.


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Of course, that’s complete horsefeathers (your brain cells never get replaced) but I’d venture to say that the person you are today feels close to nothing like the person you were just 5 years ago.

What does that have to do with managing your money?

The point is that you are continuously evolving. How many people are the same in their 40s as they are in their 20s?

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It’s pretty much the same with finances. Your goals and needs will change drastically from decade to decade. If you’re not prepared, you’ll waste a ton of time.

Don’t do that. Instead, read this kickass guide to managing your money by the decade – from your 20’s alllll the way to your 70s. When we’re through, you’ll be ready to manage your money like a hedge fund manager straight out of a high-rise in Manhattan.

The Roaring Twenties:

Good or bad, the habits you form in your twenties are the ones that’ll likely stick with you for the rest of your life.

This is the time for you to implement strong financial habits.

Start by tracking everything. Track freaking everything. How much you spend, where you spend and how you spend. Get real comfortable looking at spreadsheets – they’re going to be your friend.

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Tracking your spending allows you to pinpoint patterns in your spending and makes you more aware of where your money is going, and therefore more accountable. You’ll see what you actually do, rather than what you think you do. You might be shocked at what you find out, but this little habit will give you the information you need to create a budget.

The key here is to control your money rather than letting your money control you. Budgets allow you to live within your means.

Living beyond your means is where most people get tripped up in their twenties. During the latter half of this decade many people have student loans breathing down their neck like an enraged bull. This is the time to pay down debt aggressively. Allocate your money in your budget to the essentials first (food, rent, utilities, transportation) and then to paying off your debt. Make extra payments whenever you can.
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You may have the least amount of money you will ever have in your life (as your career takes off in the later decades, and earnings with it) but you’ll be glad for the money you save in your twenties. The magic of compound interest means that that money will have the most leverage in terms of time to grow and compound.

This is also the time you will want to educate yourself about finance and investing. The knowledge you gain in your twenties will lay the foundation for the rest of your life. This free “Getting Started in the Stock Market” course is a great place to begin.

Hustle. Hustle hard.

Sometimes the focus on spending less money can only take you so far. You’ve cut down your budget as far as it will go and you find that you’re still living beyond your means.

No problem, because you can always earn more.

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Working that 9-5? Great, start a side business. Take a course in web development and do some freelance work on the side. The time you spend investing in yourself now will pay off huge in the decades to come.

The Dirty Thirties:

By now, budgets are second-hat and you’re pretty much a master of your finances. (If you’re not, no worries. Just head over here real quick to check out our “Managing My Life 101” course).

Your thirties are the decade of change. You’ve likely amassed a fair amount of work experience by now and this is when you can leverage those hard-won skills into big $$$$.

Move up the pay ladder.

Moving frequently (1-2 years) can ensure that you get the most money for your skills. Forget about that 2% cost-of-living wage increase that you pray for every year; often a horizontal move is the fastest way to increase your salary. Don’t get too comfortable where you are, be sure to assess your worth on the market every year by networking, sending out resumes and even going on the occasional interview.

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The era of staying at the same job for 30 years and then retiring is over.

If you’ve been hustling in the previous decade, then this is the time to consider whether you have the ability to take your side business into the spotlight. If not, then continue working on creating multiple streams of income. Like I said before, the era of staying in one job forever is over, donezo. As is the idea that there will be plenty of jobs to go around. So many jobs are simply disappearing – automated away into the hands of robots and sophisticated computer programs.

Don’t buy a house.

I repeat: don’t buy a house. Keep living within your means. Someone much wiser than I once said, “the day you borrow money is the worst day of your life”.  This is the time where you may be tempted to buy a house. Consider that decision very carefully. A house has all the markings of a terrible investment. Imagine if I tried to sell you an investment instrument that came with layers of fees, taxes and maintenance that NEVER goes away.

Yeah that’s what a house is.

The idea that house prices always go up is also incorrect and poisonous. Every housing market is different and just consider: from 1900-2012, the average annual home price increase was 0.1% per year (after inflation), and we haven’t even taken the costs of owning a home into account.

The Naughty Forties:

Think deeply about retirement.

You’ll be making the most money you’ve ever made if you’ve played your cards right.

It’s time to bank all that extra cash and, if it’s something you’re interested in, think about early retirement. If you, despite all my protests, have bought a house, then it’s time to finish paying that off and get serious about saving for the future.

Now that you’re in your forties, life probably looks very different from your twenties and even from your thirties. You might have people who depend on you. This is definitely going to factor into your retirement plans and you need to account for it. How much do the rugrats need in the future? Do you need to start a college savings fund?

Next, look at your budget (you have first-hand knowledge of how these have changed over the last two decades) and consider how much income you will need once you retire. To do this, you’ll set up an income goal and work backwards from there to figure out how much you need in your retirement fund.

Consider your estate

What will happen to your family if, god forbid, something happens to you? This might be the right time for you to consider buying life insurance. Ask yourself, how will those you leave behind fare without you?

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Your estate plan includes a lot more than just considering life insurance, however. This is when you can decide where, and to whom, your money and belongings will go if you do kick the bucket. An experienced lawyer can make this part frictionless and pain-free.

That was kind of pessimistic. Let me make it up to you. Quick: think of a baby giraffe licking a kitten.

Congratulations, you made it to the end of the first part on managing your money. Stay tuned for the next instalment!

Click here to read Managing Your Money by the Decade Part II.

To learn more about budgeting and managing your life, check out this course.

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