10 financial lessons that you need to learn as you advance through life

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A core tenet of personal finance is that you should make decisions about your money based on your priorities. But the goals you have at age 26 can (and probably should) look very different from when you're 66, which is why your financial know-how needs updating from time to time. Read on to learn more about some important financial lessons to learn by your 20s, 30s, 40s and 50s.

• ...in your 20s
• ...in your 30s
• ...in your 40s
• ...in your 50s

You may feel invincible, but learn how to prepare for financial emergencies

An emergency fund acts as your first line of defense against an unexpected loss of income or major expense. Most experts recommend saving three to six months' worth of expenses for emergencies. This can often take a while to achieve, which is why it's important to start building that safety net sooner rather than later.

Don't wait until you're older and have bigger expenses to plan for; you can give yourself a major headstart by regularly putting away some cash for an emergency fund when you're younger and likely have fewer financial responsibilities.

Keeping your money in a high-yield savings account also helps it grow a bit faster compared to keeping it in a traditional savings account. That's because high-yield savings accounts pay you more interest. CNBC Select ranked the UFB Portfolio Savings account as the best account for earning a high APY. The Marcus by Goldman Sachs Online Account also made the cut for not charging any fees.

Don't wait until you're older to start investing for retirement

As with many facets of money management, the sooner you start taking action, the better. This is doubly true when it comes to investing for retirement. When you start investing money at a younger age, your balance has a longer time horizon to weather any economic downturns and grow more.

It can be easy to think that saving for retirement doesn't concern you yet because you're young but don't wait until your 30's or 40's to start investing money for your golden years. Because you won't need to touch these funds until decades later, you can also afford to stomach riskier assets that have a higher potential for large returns.

Begin by contributing money to your workplace 401(k) account (assuming you have one). If you can't afford to contribute the maximum amount ($22,500 for 2023), at least make sure you're contributing enough to receive your employer's full match.

Once your 401(k) is all taken care of, it's a good idea to shift your focus over to IRA accounts. With a Roth IRA, you'll invest post-tax money in the account. Your investments will grow over time and you won't be required to pay taxes on withdrawals in retirement. You can only contribute $6,500 to a Roth IRA per year and cannot make retroactive contributions for years when you didn't fund the account.

Because of this, it's vital to save in your Roth IRA as early as possible. Wealthfront and Betterment are two popular options that offer IRA accounts and robo-advisors to help you pick and manage your investments.

Don't use credit cards to buy more than you can afford each month

It can be easy to see credit cards as "not real money" since you don't actually see the dollar bills leaving your wallet when you pay for things. Because of this, it's important to be cautious in your use of credit cards so you don't rack up a ton of debt. Credit cards charge interest when you don't pay your balance in full every month, so every purchase actually costs you more.

Plus, carrying too much of a balance in relation to your credit limit can lower your credit score. When you apply for loans, credit cards and even a mortgage with a lower credit score, you'll face higher interest rates since you're seen as a riskier borrower.

Make sure you don't spend more than you can afford to pay off each month to avoid amassing a mountain of credit card debt. If you're in college, there are some credit cards that are actually geared toward students. The Discover it® Student Cash Back card, for instance, considers applicants with fair or no credit and doesn't come with an annual fee, making it more affordable for students (who often have limited income) to manage.

The Capital One Savor Student Cash Rewards Credit Card is another solid option since it also doesn't carry an annual fee, but it offers a small, but exciting, welcome bonus: Cardholders can earn $50 when you spend $100 in the first three months.

Just because you have more money doesn't mean you have to spend more money

As you get older and progress through your career, you'll (hopefully) start to earn more money. It may sometimes be tempting to simultaneously upgrade your car, move to a fancier apartment, splurge more on nights out, do more shopping and so on. This is called lifestyle creep, and it occurs when you earn more money so you inflate the amount you spend on discretionary items.

The key to knowing the difference between lifestyle creep and simply enjoying a higher level of income lies with your goals. There's nothing wrong with spending your money on purchases that make you happy. It's only when you overspend and threaten your progress toward your long-term goals like buying a house, continuing your education, and saving for your kids' college tuition that you need to take steps to rein things in.

Don't wait until your kids are 18 to start thinking about how you'll pay college tuition

If you're at a phase of life where you have young children, now's a good time to start thinking about what their college tuition needs may look like. If you plan on providing some financial assistance — whether it be for their entire undergraduate education or just the first year — you'll likely want to save or invest for it while you still have a long time horizon to do so.

Saving for your kids now will help them avoid taking on too much student loan debt to pay for college. While a high-yield savings account can be helpful for saving for large purchases, a 529 plan might be the better tool in this case. A 529 plan is a state-sponsored savings plan designed for funding a college education. The growth is tax-deferred and withdrawals are tax-free for qualifying education expenses.

Even if you're unsure how much financial aid or institutional scholarships your child will qualify for once they start applying to colleges, having some money set aside for them is still a lot better than having nothing at all.

Paying down debt improves your financial flexibility

One of the best ways to protect your financial future is to pay down any existing debt you hold. That money you spend on loan balances and credit card statements can then be used to build your savings, invest in the market and live your best life.

High interest rates often prevent people from paying off debt because they suck up money you want to go toward the loan's principal. This is a familiar problem to anyone with significant credit card debt, but using a balance transfer credit card with a 0% intro APR period would allow you to make payments toward your balance without being charged interest for a limited time period. This gives you time to focus on paying down the debt's principal and freeing yourself from a big financial burden.

The Citi® Diamond Preferred® Card is one solid contender since it offers 0% intro APR for 21 months on balance transfers from date of account opening, then 16.49% - 27.24% variable. It does come with an intro balance transfer fee of 3% of each transfer (minimum $5) completed within the first 4 months of account opening. After that, your fee will be 5% of each transfer (minimum $5), which is fairly typical of many balance transfer cards. The Discover it® Balance Transfer weighs in at a 3% intro balance transfer fee, up to 5% fee on future balance transfers (see terms) — but offers a 0% intro APR period on balance transfers for the first 18 months, then 17.24% - 28.24% variable.

Don't stop increasing your income

Anyone at any age should always keep opportunities for increasing their income in mind. But in your 40s, you may have some particularly big expenses to prepare for — such as supporting your aging parents financially or relocating your entire family for a new career opportunity. Having more income makes it less stressful to cover these kinds of costs.

Some common ways to earn more money are to ask for raises at work when appropriate and change jobs for a more significant salary bump.

Reaching your financial goals is often a team effort

Your 40s can be filled with big-ticket expenses, especially if you're buying a home, expanding your family, paying for a child's college education, caring for aging parents and increasing your retirement contributions. All these middle-age milestones can feel daunting to manage, but the good news is you don't have to do it all alone.

If you've never worked with a financial planner before, now would be a great time to find one. They can often take a look at your financial circumstances and goals and offer advice you may not have considered. They're also able to help you plan for a variety of events, including retirement, divorce, marriage, loss of income, an increase in income and more.

Financial planners excel at spotting opportunities that help you reach your most significant goals. So even if you have your own degree in personal finance, you can still benefit from consulting with a planner to get additional advice.

To find a financial planner, start by seeing if any services are offered by your employer as a benefit. If this isn't something that's available to you, you can use Zoe Financial's matching tool to filter financial planners based on your needs.

Catch-up contributions can make a bigger difference than you might think

Catch-up contributions are designed to allow individuals over the age of 50 to stash away a little extra cash each year so they have more money to withdraw from tax-advantaged retirement accounts like their Roth IRA or traditional IRA.

For 2023, individuals are allowed to contribute up to an additional $1,000 to their IRAs (both Roth and traditional accounts). This brings their contribution limit up to $7,500. So let's say a 50-year-old takes advantage of that increased limit and contributes $7,500 per year until they leave the workforce at the traditional retirement age of 65; they will have contributed $112,500 over the course of those 15 years. But if they had adhered to the $6,500 contribution limit for people under age 50, they will have stashed away $97,500 over 15 years.

That $15,000 difference may not seem like a life-changing amount, but it can grow exponentially since it's being invested. Plus, outliving one's savings is a major concern for many older individuals. Stashing away as much money as possible while you still earn an income can help lessen the likelihood that you'll run out of money after entering retirement.

Don't wait until the last minute to think about medical care in retirement

Out-of-pocket healthcare expenses can really eat away at your retirement savings once you're no longer working and don't have an employer-sponsored health insurance plan to fall back on. According to Fidelity's 2022 Retiree Health Care Cost Estimate, the average couple who retires at age 65 can expect to spend around $315,000 on healthcare expenses in retirement.

Because of this, you don't want to wait until you've already retired to start thinking about how you'll afford any medical care you may need. Use this last decade before retirement to fill any potential gaps in what you may be able to afford in the future.

This is another area where it could make a lot of sense to talk to a financial planner who can recommend specific savings vehicles, like a health savings account, to help you grow your nest egg for health care costs even quicker.

Individuals at different life stages likely have different financial goals they'd like to prioritize. While these lessons are great starting points, it's important to consider what you personally would like to achieve and which goals fit your personal circumstances.

When in doubt about what moves make the most sense for you, consult with a financial professional who can provide personalized advice.

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