Life's financial milestones; expert shares formula to navigate challenges
MILWAUKEE - Sometimes, we put pressure on ourselves to earn or save more money when we hit a certain age. How much should we saved at 20, 30, or 50 years old? We asked an expert to help navigate life’s financial milestones.
Kiana Ayala is still searching for her dream home.
"We wanted to find a house that was close to where my boyfriend works," she said as she strolled through Milwaukee’s Johnson’s Woods neighborhood.
Kiana Ayala
In August, Ayala made an offer $2,000 over the asking price for a 3 bedroom, 1 bath ranch. But after a closer look, she decided it wasn’t the right fit. Ayala has been saving up for more than a year and a half to become a first-time homeowner.
"If I’m being honest, saving is like a muscle I’ve had to develop," Ayala said.
Kiana Ayala
Ayala cut back on things she didn’t need. Instead of going to restaurants for dinner she cooked. A night out with friends became a night in.
"I set the goal to be a homeowner by 30," Ayala said. "I felt like my 20s like, transitioning into adulthood, I just wanted time to figure out how to do life, for lack of better words."
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The weight of her own expectations started to take a toll.
"When you don’t take those steps maybe in the speed as some other people, you can start to doubt yourself," Ayala said.
Experts say that is where most of us go wrong trying to reach life’s financial milestones. Don’t compare your finances with someone else’s. Instead, make your money have meaning.
"The more you spend time on why money matters to you and use those resources on things that matter most to you, I think you have a better chance of living a more fulfilled and happy life," said Joe Maier, Johnson Financial Group Senior Vice President and Director Of Wealth Management.
Joe Maier
Most of his clients are in their 50s or 60s. Here’s what Maier wishes he could tell them had they stepped through his door decades earlier:
"For every 20 something coming out of college, make sure we’re having conversations with them that say try to build your budget on 80% of what you bring home – or 90% of what you bring home," Maier shared. "If you can develop that discipline and if you can put money away and care for your future self, you’re going to be really happy at 45, 55 about the options you have that you wouldn’t have had if you hadn’t done it."
Joe Maier
Maier gave us his "two cents" on how to do that even if you’re living paycheck-to-paycheck. First, he says ditch the plastic. Pay off your credit card debt and stop using them unless you have money set aside to cover it. Second, save with purpose. Have an understanding of what you are saving for - whether its retirement, a better life for your kids, -or like Ayala, a dream home. Maier says that makes it easier to set financial goals.
"It’s less about a number and more about habits," Maier added.
"I want it to be move-in ready," Ayala told us outside a home for sale. "We didn’t want to have to move in and fix the roof or plumbing."
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Ayala's search has only intensified. Her real estate agent urged her to take a home-buying class. She said saving money became fun. Her dream is now much closer to reality.
"If you want your future self to be somewhere, your current self has to start doing the work," Ayala said.