Making Up for Gaps in My Financial Planning

I am behind when it comes to saving for retirement. Paying for my student loans in my 20s put me behind on saving for my children's college. According to a recent article by Manilla.com, there different stages of financial planning by age. At age 40-something, I've missed at least half of financial milestones I should have met. I don't think life is a competition to see who dies with the most money in the bank. Still, I would like to plan for my family's financial future, making up for many of the gaps in my financial planning through the years.

Working as soon as possible

One of the best things I did was start working at the age of 16 and never stop. I was able to pay part of the cost of my private college tuition, which reduced the amount of money I owed in student loans. I'm going to try to improve my financial situation by working until my full retirement age of 67 or even beyond. Unlike in my teens and 20s, I can save a portion of my earned income for retirement.

Staying out of credit card debt

According to the Manilla.com article, by age 25 a person should have good credit by establishing low-interest credit cards and making regular payments. I ran up credit cards in college, which left me with tens of thousands of dollars of consumer debt in my 20s. I can't turn back the hands of time, but I can stay out of debt by making micro payments on my credit card throughout the month with my online banking. Even if I only spent $7 on my credit card, I go online and transfer money from my checking to my credit card.

Contributing to my retirement

The article suggests people contribute to a 401(k) in their 30s if they have not started doing so already. I didn't have a full-time job in my 20s, but still contributed to a Roth IRA when it was introduced. I saved as much as I could to my 401(k) in my 30s, but made the mistake of taking out 401(k) loans. I'm hoping to make it up by making catch-up contributions when I become eligible to do so. My goal is to max out my Roth IRA each year.

Retiring in place

At age 70, the article recommends people downsize their home or move to a less expensive area. By paying down my mortgage in my 40s, I'll be able to retire in place in my Florida home. Most of the people I know who are struggling on a fixed income in retirement have to juggle the costs of their medications and food costs with mortgage payments. Without a mortgage, I'll be able to compensate for the nest egg I could have built in my 20s if I wasn't bogged down with student loan and credit card debt.

In a perfect world, people could save for retirement, their children's college and emergencies while simultaneously paying off their mortgages. In the real world, it's hard to stick to a financial planning timeline. I learned from my financial mistakes at earlier stages of my life, which I'm hoping will afford me a second chance at financial security if not prosperity and abundance.