Some advice is timeless. Look both ways before you cross the street. Drink enough water. Back up your files. But when it comes to personal finance, the truth is that some things change as you get older. Good financial advice for a 20-year-old isn’t necessarily right for someone in their 40s.

Here, we’ll break down some financial priorities to consider in your 20s, 30s, and 40s. Of course, when it comes to saving and investing, starting earlier is better. If you’re in your 20s and are able to jump ahead to some of the goals we’ve listed for your 30s or 40s, that’s great  – and you should go for it.

Your 20s

Build your emergency fund: An emergency fund is the cornerstone of any good financial plan. An emergency fund is, as the name suggests, money you set aside for an emergency – whether that’s job loss, an unexpected medical bill, or a significant home or car repair. You should try to save up 3-6 months’ worth of living expenses for your emergency fund, and adjust its size over time as your situation changes. For more guidance, we recommend checking out our blog post about building your emergency fund.

Tackle your debt: Many of us end up with debt in our 20s, whether it’s from student loans, financing the purchase of a car, or carrying a credit card balance. As a rule of thumb, you should tackle your highest-interest debts first and consider refinancing to lock in a lower rate if possible. Generally, you should pay off your entire credit card balance each month because the interest rates associated with credit cards are so high. For more help taking control of your debt, check out our guide on the subject.

Work on your credit score: Your 20s are a good time to start building your credit. Having a good credit score can be a big advantage down the road whether you’re trying to take out a loan or rent an apartment. You can read more about how credit scores work and how to improve yours here.

Start investing for the long term: You can do this in a retirement account (like a 401(k) or IRA) or in a taxable investment account. It might sound strange to start thinking about retirement when you probably haven’t been in the workforce that long. But because of the magic of compounding, the money you save in your 20s has an especially big impact on your finances in your 60s and beyond, precisely because it has so long to grow. It’s smart to take advantage of any 401(k) matching your employer offers. After you’ve used up your match, consider using an IRA or a taxable investment account to save for the future – just make sure you understand the rules for tax-advantaged accounts (like IRAs) first and choose an option that’s flexible enough to meet your needs. For help choosing the right account type, check out our blog post on the subject.

Your 30s

Keep saving for the long term in a taxable investment account: You might spend your 20s setting up your emergency fund, paying down your debt, and making some early contributions to your retirement account. But by the time you hit your 30s, you should get serious about contributing to a taxable investment account if you haven’t already – these accounts offer a high degree of flexibility and liquidity. As a rule of thumb, any money you don’t need to spend within 3-5 years (besides your emergency fund) should be invested for the long term – that way, your savings are more likely to keep up with inflation. 

Save for a down payment if you plan to buy a home: Many people buy their first home in their 30s – and that usually means spending a large sum of money on a down payment. If you dream of owning a home, you should plan accordingly. Remember, if you plan to buy a home within 3-5 years, it’s probably unwise to take market risk with your down payment and better to keep that money in a high-yield cash account.

If you have kids, think about the cost of college: If you plan to have kids, you might want to help them pay for college. In that case, your 30s are a good time to start looking at your options. Because of their tax benefits and relative flexibility, many experts consider 529 plans one of the best ways to save for college. You can learn more about 529 plans here and read more about superfunding a 529 plan (which can jumpstart your savings) here.

Your 40s

Avoid lifestyle creep: As you progress in your career and earn more money, you’ll want to keep an eye out for lifestyle creep – or spending more money over time, just because you can. While you should reward yourself for your hard work, putting your extra income towards your future (before you get used to spending it) is a great way to increase your savings rate.

Ramp up contributions to your investment accounts: Investing is a great tool for building long-term wealth, and it’s often smart to invest a set amount of money every week, paycheck, or month to make sure you’re consistently adding to your nest egg. To that end, you should adjust the amount you’re regularly investing upwards as your salary increases. And remember to revisit the amount of risk you’re taking with your investments every once in a while – a big life event or change in your income or liquid net worth could change your risk tolerance.

If you have kids, teach them about money: Many of us don’t pick up good financial habits until we’re adults. In some cases, we make avoidable mistakes along the way. If you have kids, you can do them a big favor by teaching them about money (saving, investing – you name it) from a young age. You’ll be doing yourself a big favor too. By teaching them to be financially savvy, you make it less likely you’ll need to help them out down the road.

No matter what stage of life you’re in, you can make decisions that help you build long-term wealth. These tips are just a starting point to help you build the financial future you want. You can check out Wealthfront’s Guide to Financial Health for even more information on saving, investing, and planning for the future.

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About the author(s)

Chris Hutchins is Wealthfront's Head of Financial Advice Automation, a registered financial advisor, and a millennial money expert.