Thrifty Rich Locals: The Best Money Advice for Each Decade of Your Life

A handy financial checklist to guide you through every stage.
Photo: Rawpixel / Unsplash



kick-start your life


Your 20s are all about incremental changes that pay off big down the line. As suggested by Elizabeth Warren (long before she became a U.S. senator, she wrote The Ultimate Lifetime Money Plan), 50 percent of your paycheck should go to necessities, 20 percent into savings and 30 percent toward discretionary spending. How does that work, exactly?


  • Get an app. Besides money-transferring, banking and on-time bill-paying functions (to avoid late fees), some apps can make automatic deductions, round up purchases and add the extra to a savings account—and even teach you investment strategies. Check out Acorns, Digit, Mint and Qapital. Tame bills and debt with Honeyfi, Trim or YNAB (You Need a Budget).

  • Negotiate hard for your starting salary and raises. The employer expects it, but most of us, women especially, don’t do it.

  • Put aside 20 percent of your paycheck—and not for a leased status car, Prada bag or surf vacation, either. If offered a 401(k) or 403(b) (nonprofit) account by your employer, jump on it; most match 50 cents on every dollar you put in. (If your pay is low, make that a Roth 401(k) and IRA.)

  • Don’t pile up credit card debt; pay it off every month.

  • Pay and/or consolidate student loan debt. If your employer doesn’t have a student loan repayment program, explain why they should (it’s key to keeping and growing talent like you).

  • Develop a paying side hustle.

  • Open your social circle to include those you wouldn’t normally rub shoulders with, especially those in business, finance and higher-paid professions. Success rubs off.

  • Reform expensive friends. Take charge of suggesting lower-priced group dinners instead of fancy restaurants or evenings out. Never go into debt for someone else’s destination wedding.

  • Think big about your life and goals. Does your passion have a low salary limit? Make it a side job and find something that pays better.

  • Dare to be cheap. Skip that latte; brown bag it. Clip coupons and use coupon or deal apps like Honey, Scoutmob or SavingStar.

  • Acquire lifelong habits: Read (author and researcher Randall Bell says studies show those who read seven or more books a year are more likely to be millionaires); wake up earlier, at least three hours before your workday starts; and practice doing the uncomfortable. Get used to speaking up in meetings, volunteering to take on more, bringing up new ideas to reset your potential for the rest of your life.


SEE ALSO: 33 Money-Saving Tips, Life Hacks and Savvy Shopper Steals



Flip the Switch 


If your 20s passed in a blur of social, emotional and career activity, but you forgot to save, welcome to the club. Now it’s time to flip the switch.


  • Do all the stuff you could’ve done in your 20s.

  • Get health insurance. Many young people feel they’re immortal. News flash: One freak accident—bike or car, falling while taking a selfie, sliding into home or a mosh pit—can put you behind for life, financially.

  • Supersize your career. Take night or online courses, seek out a mentor, volunteer for projects.

  • Ask for a raise. Go to the meeting prepared and if the answer is no, ask what you can do to get one. Six months later, ask again. Studies show that only 43 percent of workers summon the gumption to try, yet of those who do, 71 percent get some kind of bump.

  • Move on. If there’s no raise or promotion in a year, don’t wait for an unrewarding workplace to come around. You’re now trained—aim for a new job that pays 50 percent more.

  • Learn about stocks, but invest intelligently. Don’t play day trader or take hot tips from friends, TV hosts or the internet. Don’t just hand your money to an adviser who may churn it for fees. Instead, get a flat-fee consultation. Then put some in a low-cost index fund and let it ride.   

  • Buy a condo. Why pay rent?


SEE ALSO: How 4 Savvy Locals Who Weren’t Born Into Money Manage Their Finances in Hawai‘i



Go Big


All the incremental growth should have set you up. Now go into overdrive.


  • Keep doing everything from your 20s and 30s. If you haven’t started, no worries, unless you ignore us again.

  • Take your 401(k) and IRA with you when you change jobs. (If you’re making good money, change that Roth to a 401(k) or IRA.)

  • Learn how your financial adviser is paid. The Securities and Exchange commission says there are four ways advisers earn: a flat fee, hourly rates, a percentage of the value of your assets, a commission on securities they sell you—or a mix of these. Knowing how your expert makes money helps you identify when advice will benefit him or her as much as you. Ask if the fees are negotiable.

  • Write your will. Did we mention that you’re not immortal? Do it for your loved ones and because you’d hate to see half of your estate go to taxes and lawyer’s fees.

  • Buy a house. Keep the condo for its rental income, if you can.



Full Speed Ahead


Your earnings and hire-ability are peaking as you leave your 40s—so cash in on your experience, your network, your well-honed skills.


  • All systems go. You’re a well-oiled financial machine. Your side hustles should be revenue streams by now. (The ones that aren’t, relegate to hobbies.) Invest in real estate; rental income is perfect for college tuitions and retirement. Maximize your retirement contributions.

  • Playing catch-up? You’ve got some work to do. Live below your means. Stop eating out. Clean up your diet and cut back on your drinking. Skip the gym; work out at home or in the park. Rent out your extra parking space and/or bedroom. If you own a house, rent that out once the kids go to college and find yourself a smaller space. Take up knitting.



What’s Your Glide Path?


  • Chart your retirement income. Add up your Social Security, pensions, revenue streams—then debit your mortgage, taxes, food and health costs. Stare at the number. Write it on the wall. Plan around it.

  • Move your investment risk comfort level to conservative. This is not the time to bet the farm—or bankroll junior’s startup. And your financial adviser should definitely be a fiduciary or at least fee-based, with no conflicts of interest.

  • Pick your landing. Don’t wait to be pushed. Ask your company about a part-time work schedule or look for a step-down gig that uses your skills. We all live a lot longer than we used to and the income, and mental stimulation, will come in handy. Plus, for each year you delay taking Social Security after 62 your check increases by 8 percent.

  • Downsize. Your house, your car, your expensive habits. It feels better if it’s voluntary instead of a result of going broke.

  • Plan your giving. Set up trusts for education and housing. Teach your children and loved ones what you know and walk them to the bank to set up their Roth 401(k)s and IRAs.

  • Have some fun while you still can. Try new stuff. Make a plan for each day. Help others. Pass it on.