Life Stages Checklist and Additional Resources
Episode #10 of the course Personal financial literacy: Take control of your future by Riley Burger
Congratulations!
This is the final lesson of the course. By now, I hope you are feeling empowered to take your financial future into your own hands. Below is a checklist for people at each wealth-building stage, to give you some tangible starting points for your next steps.
Wealth-Building Stages Checklist
Stability building:
1. Make a budget, build your emergency fund, and start practicing healthy savings habits with the help of a High Yield Savings Account. You can also check out Certificates of Deposit (CDs) for a less liquid, but higher return, method of saving. Find more info here.
2. Start building credit with a credit card, and work to increase your credit score with a healthy loan and credit instrument practices.
3. Use debt responsibly—only use it to finance what you need, and make sure you have a repayment plan you’re comfortable with.
4. If you make more than $12,200, pay your taxes! (note that the minimum income that you must file for changes year to year).
5. Start preparing for retirement—if you work for an employer, look at your 401k options. If you work part-time, without benefits, in the gig economy, or for yourself, look into opening a Roth IRA.
6. Start investing! Practice analyzing different assets and putting together a small portfolio, so that you can hit the ground running as your wealth increases over time.
Wealth building:
1. Make a budget, build your emergency fund, and start practicing healthy savings habits with the help of a High Yield Savings Account. You can also check out Certificates of Deposit (CDs) for a less liquid, but higher return, method of saving. Find more info here.
2. Work to improve your credit score by practicing healthy habits.
3. Use debt responsibly—only use it to finance what you need, and make sure you have a repayment plan you’re comfortable with.
4. Pay your taxes!
5. Start preparing for retirement—if you work for an employer, look at your 401k options. If you work part-time, without benefits, in the gig economy, or for yourself, look into opening a Roth IRA.
6. Start investing! Create a portfolio that works for your investment horizon, risk appetite, and financial goals. At this stage, you could consider slowly decreasing the risk in your portfolio, by increasing your fixed-income investments.
7. If you are struggling with student debt, look at refinancing options.
8. If you are a parent, consider getting a Health Savings Account (HSA).
9. If you are looking toward retirement, start comparing your financial goals with your current situation. You can use the framework discussed in the retirement lesson to get started. It’s also useful to learn about retirement instruments we did not discuss in this course, such as annuities and perpetuities.
10. Write a will! This is a capstone to your financial journey, and it’s never too early to create one.
Consolidating:
1. Make a budget, build your emergency fund, and start practicing healthy savings habits with the help of a High Yield Savings Account.
2. Work to improve your credit score by practicing healthy habits.
3. Use debt responsibly—only use it to finance what you need, and make sure you have a repayment plan you’re comfortable with.
4. Pay your taxes!
5. Keep investing! Create a portfolio that works for your investment horizon, risk appetite, and financial goals. At this stage, you can consider moving primarily to fixed income assets.
6. If you are retiring, make sure to compare your financial goals with your current situation every few years, to make sure you are on track to maintain your lifestyle. You can use the framework discussed in the retirement lesson to get started.
7. In addition, prepare to live off of your retirement accounts—plan your distributions so that you can maintain your chosen lifestyle.
8. Write a will! This is a capstone to your financial journey, and it’s never too early to create one.
Additional Resources: Never Stop Learning!
One of the fascinating things about personal financial literacy is that there is always room to learn more. I want to leave you with some educational resources for continuing to take control of your financial future.
• Investopedia is one of the greatest free resources I’ve found for all things financial. This is my first stop for any questions I have about my professional and personal endeavors in finance.
• Khan Academy is another great free resource, primarily for the economic and analytical reasoning behind many of the topics we discussed in this course. Try their video on the Yield Curve, which helps explain the relationship between economic conditions and bond yields.
• Wall Street Journal is a great news source for financial news. Stay updated on monetary policy and changing economic conditions that can affect your wealth by following news sites like WSJ.
Hopefully, many of the concepts in this course resonated with you, and you are able to use this as a springboard for your personal financial literacy journey.
Thank you for joining me for this course!
All the best,
Riley
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