The best resource I’ve seen so far on financial planning through the ages is The Wall Street Journal’s Lifetime Guide To Money. I thumbed through it to share with you some principles that might help beginners going through the maze of life and finances. I adjusted some of them for Filipno-centric concerns. This could also work as a reminder to those who need to reassess their paths.

For 20 and 30-somethings

“Whatever your goals, the sooner you start saving, the less painful it will be. Once you have made a start, you will find that there is a special satisfaction in facing up to the challenge. Honest.”

Important things to remember:

• Automate your savings
• Start with saving at least 10 percent of your income and increase from there
• Start setting up an emergency fund up to six months of your living expenses
• Invest unexpected windfalls instead of spending them on gadgets or gimmicks
• Try mutual funds
• Inquire about your company’s retirement plan package
• Invest in stocks if you have the stomach for the roller coaster ride in the market. Over long periods, stocks have gone up much more than they have gone down
• Consider bonds if you are a conservative investor
• How much to invest for the long-haul? A rule of thumb says you should subtract your age from 100 and then add a percentage sign
• Just say no to debt other than a home mortgage
• If you can’t live without plastic, pay the entire balance each month
• If you have debt and have savings, take out your money from the bank and pay your debt. Paying off a loan can be one of the biggest investments you can make
• Review your health benefits at work to make sure you have the coverage you need
• Even if you are just renting an apartment, be sure you have insurance on the contents
• You do not need life insurance if you have no dependents. Once you have children (or if your parents are now dependent on you), you will probably need more than at any later time in life
• No-frills term insurance is usually the simplest and lowest cost option
• Think carefully about buying a house versus renting. Since the fees can be steep, buy a home only if you are going to live in it and do not need to relocate in a few years
• Buy only a house you can afford. A lot of people end up getting strapped for cash because of the tendency to stretch themselves to buy the biggest house they can
• Start thinking about writing a will

For 40 and 50-somethings

“These years can be a real juggling act, particularly for people who had their children in their 30s. With retirement beginning to loom in the horizon, these are the years when most people become more serious about setting money aside. Ideally, these are high-earning years in which you have plenty of income to sock away.”

Important things to remember:

• Take a hard look at what you can really afford, making sure you are providing for future needs
• Be realistic about retirement
• Watch out for tax-advantaged retirement funds that may begin due to the recently-signed PERA bill and prepare to maximize them
• Structure your portfolio for strong performance, while working to keep it simple
• Check your safety net (insurance) for holes. Find out whether you have enough
• Plan your career well. Leaving your long-time employer for a lucrative offer may affect your retirement benefits
• Consider getting additional academic training or start a sideline business that might grow into a new career
• Be extra cautious about trying to retire completely while still in your 50s because of the risk of outliving your money
• Talk with your spouse about how much of your children’s college costs you can bear while saving for retirement at the same time
• Beware of the temptation to dip into your retirement fund for a vacation or buy a new car
• Think twice about moving to a bigger, more expensive home that could seem way too large when the kids move out
• Go through the clutter of your investments to make sure they are working hard for you
• Think about how your family would fare if you are disabled and unable to bring home a check
• Even if you do not feel wealthy, figure out how much estate-tax bite would affect your estate

Your 60s and beyond

“The period of life that begins at 60 is characterized by sweeping lifestyle changes—and by some momentous financial decisions that can affect you and your family for many years to come.”

Important things to remember:

• Have a vibrant, active retirement but do not rush into it before you can really afford it
• Tend your resources carefully by investing prudently but not too conservatively
• Arrange your affairs so that a surviving spouse will be provided for and assets divvied up appropriately after death
• Review your medical coverage when deciding when to leave work
• If you receive a lump-sum payment from your employer upon retirement, that can be the biggest lump sum you will ever get. Make sure you learn all about investing and don’t invest it in scams
• Be wary of taking too much risk and too little risk
• Stick to time-tested vehicles such as mutual funds and bank accounts
• Watch for how fast you draw down from your accumulated savings. In the early years of retirement, unless your wealth is immense, you should use only a small part of your savings for living expenses
• Get help on estate tax planning
• Do not feel obliged to preserve all your wealth for others.
• Enjoy your retirement