The Money Milestones That Actually Matter

At our financial planning firm, we focus on helping professionals in their 30s and 40s. That means we’re constantly seeing clients go through big life transitions or working toward significant goals.

Between buying homes, starting businesses, growing families, advancing careers, traveling the world, upgrading lifestyles, and more, there are a lot of achievements that our clients want to secure — and that often means talking about and planning for major financial milestones.

Through thousands of financial planning conversations, we’ve learned a thing or two about the kinds of milestones that really matter… and they probably don’t look the way you’d expect.

Here’s what you need to think about when considering the benchmarks to use in your own life, and what to keep in mind when wondering how your progress compares to your peers.

Don’t ‘Should’ Yourself to Death

A lot of people want to ask questions like, “What milestones should I be hitting by this age?” or “What kind of net worth should I have by now?”

But putting the word should in your question is a good indicator that it’s the wrong one to ask.

Clearly, there are some actions that are more beneficial to you than others. If you never save for the long term, Future You is going to be in a tough spot one day.

On the other hand, building a savings habit today and making regular contributions to an investment account so your assets can grow helps you develop financial stability throughout your life.

But here’s the thing: There is no single, set course for everyone. There is no universal “should.”

When it comes to financial milestones, the ones you need to aim for depend on your specific goals and priorities. Without that context, it’s hard to say what kind of milestones you need to hit and at what ages or stages of your life.

Material Things Don’t Make Meaningful Money Milestones

Too often, we focus on things like “buying a house” or the material things you can afford to buy (be it luxury travel or fancy cars or the latest tech) as metrics for how financially successful someone is.

This is misleading, because it doesn’t actually tell you anything about someone’s wealth or financial well-being. What someone owns or possesses is only a reflection of what that person is willing to spend.

Wealth, on the other hand, is what you don’t spend.

Wealth shows up on your balance sheet, in your assets, the value you can create in your life — and wealth is also completely relative. It’s determined by your ability to do what you want with your time.

The Financial Milestones to Look for in Your Own Life

When we put together financial strategies for clients, we don’t worry about whether or not they’ve bought a home by a certain age.

We don’t judge their net worth and make a determination about having too little, or not enough, just by their life stage.

Instead, we start by looking to understand what you value and find most important in your life — whatever that is.

Maybe you genuinely value living in a certain neighborhood, which means owning a certain kind of house. Or maybe what’s most important to you is the freedom to travel anywhere, anytime.

Perhaps having the ability to devote more time to your family than to your job is your top priority. Or you could feel so passionate about the difference you’re making in your career that you know committing to a specific relationship or growing your family is not the right move for you at this point.

That’s what determines the “right” level of cash on hand, or assets in an investment portfolio, or homeownership status for someone to have.

What matters is not what set of boxes you have or haven’t checked off in your financial life (or life in general, for that matter).

What matters is developing clarity around what matters to you, and then setting your own personal benchmarks based on the milestones you choose for yourself.

Only then can you look at your financial habits and actions in context and determine what you “should” be doing (or not). You may need to make adjustments to stay aligned with your stated goals or priorities, and that’s fine.

What you don’t need to do is worry about what someone else’s milestones look like, or whether your path matches what people think you should do.

Money Milestones We Can All Aim to Hit

All this being said, there are some common financial milestones that we can all share and have in common. Here are the top four:

• Prioritizing savings
• Building assets
• Leveraging opportunities as they arise
• Protecting against downside risks

When it comes to prioritizing savings, for example, we work with our clients to hit a targeted savings rate. That usually looks like saving at least 25% of their gross income per year.

Or with building assets, we’re asking questions like, what kind of investment accounts are you using and are those appropriate for your goals? Are you diversified enough or taking on too much risk? Are you considering tax liabilities and planning ahead for those?

Leveraging opportunities often looks like strategizing on the next best career move. For some people, that means getting into positions where they’re earning not just a salary but also equity compensation. For others, it means planning to start their own business.

We also look at protecting families and what they’ve built, so the “protection” milestone looks like getting things like an estate plan in place or ensuring someone isn’t over- or under-insured.

Finally, financial milestones can be feelings. You know you’ve hit some really important ones when you feel confident about where you’re headed, or good about your future potential.

Another major milestone? Simply feeling at peace with how your money works in your life, because you know it aligns with what you say is most important to you.

If you’re ready to optimize your financial life and enjoy the confidence that comes with knowing you’re making all the right money moves, start here.