Here are 6 Financial Goals you should accomplish before 30
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1. You’re winning the war against debt
Notice I used “winning” instead of “won”. After talking to hundreds and hundreds of people about their various types of debt, the reality is that paying it all off before 30 isn’t a realistic option for most.
Between student loans, medical bills, car loans or credit cards, debt is a long war to fight for a lot of us.
While winning that war by the age of 30 might not be a realistic option for most of us, you should be optimistic about the number of battles you’ve won and the progress you’ve made.
Whether you are looking at refinancing (Credible is the only company I trust for checking for lower interest rates), throwing extra money at your loans, or just trying your best to manage them, it’s a major win if you just have a plan for how you are going to deal with your debt moving forward.
2. You’re surrounding yourself with the right people
I’ve met a lot of wealthy people in life and through my work, and the common denominator is that they are just as picky about the people they associate with as they are with their investment decisions.
One thing I’ve learned is that you’re only as good as the people you surround yourself with.
You need to find mentors and friends that are excited about the same things as you like investing and personal finance.
Find people that actually want to talk about money instead of making it taboo.
Believe it or not, there are plenty of them out there (the Making Coins Count private Facebook group is a great place to start).
3. You’re paying yourself first
You might have been told over and over again that you need a budget. My take on saving is a little different.
While a budget is important and could do wonders for you, I don’t think it’s realistic for most of us.
According to a 2014 poll, only 30% of people are successful at budgeting. That makes 70% unsuccessful…why?
Fluctuating bills, unexpected crises, major life changes – and the reality that most human brains are not primed to track 500 distinct transactions per month and tuck them into clear categories.
Besides, who has time for that? Amiright?!
What has worked for me, and others I have recommended it to, is paying yourself first.
Each time your payday rolls around, you want money coming out of your checking and into your savings.
Saving 10-15% of your income is a good target. Most banks will let you set up automatic transfers which means you don’t even have to think about it.
The key here is to force yourself to live with what’s left over instead of hoping and budgeting for anything to be left over.
For this to work, you have to live without your credit card. That means all purchases come out of your checking account.
If the credit card comes into play then you might end up overspending instead of living with what’s left.
4. You have an idea of where your money is going
While I think budgets aren’t for most of us, I still believe it is important to look at where your money is going.
Here’s the quickest and easiest way to get it done:
- Create a Mint account. It’s FREE and automatically categorizes all your expenses
- At least once a month, log into your Mint account and have a look at what you spent money on
- Make adjustments as needed. Maybe you’re doing great with your spending but most of the time, adding and categorizing does help with managing. I’m guilty of spending too much on restaurants so my total each month serves as a good reality check. I might end up on a wild eating spree if this wasn’t part of my process.
5. You understand and are tracking your net worth (even if it’s negative)
At the most basic level, your net worth is everything you own less everything you owe.
So if you own a car that you can probably sell for $30,000 but you still owe $32,000 on it after interest, then your net worth is -$2,000.
Why is it so important?
It’s a snapshot of your financial health. Understanding it can help you plan for your future or give you a kick in the butt if it’s negative.
If you calculate your net worth and realize it’s negative, don’t panic. Knowing how you’re doing is the first step to taking control and turning your financial future around.
6. You’re putting your money to work
How much easier would it be if you could turn $1,000 into $5,000 without “working”?
You could pay off debt sooner, bulk up your emergency savings, or even use the cash to take an extra vacation without having to put it on a credit card.
You can get your money to start working for you and best of all, do it all from home in your spare time.
What’s the secret? Investing.
Investing seems scary and intimidating but the reality is it can be as simple or as complex as you make it.
There are a lot of investing options out there and it can get overwhelming, but if you’re new to the world of investing, here’s a simple step by step guide that takes the overwhelm out of it and shows you EXACTLY how to get started.
The key to making money investing is to understand what you are doing.
6. You’re reducing your taxes
Did you know the average American works for 3 months out of the year just to cover their taxes?
A lot of us don’t realize how much we pay in taxes simply because we never see that money coming out (unless you’re self-employed).
Understanding what tax bracket you fall into, what credits are available to you and how you can minimize your tax burden means more money in your pocket.
Make sure you’re claiming all deductions you’re entitled to. If you’re not, that means you’re leaving money on the table.
You also want to contribute to tax-sheltered accounts (such as IRA) but be sure you understand its ins and outs before you sign up.
It might surprise you to find out certain accounts may not be in your best interest. One, in particular, you want to tread carefully with is the 401(k) and here’s why.
30 isn’t all that bad…
Other than not seeing as well, running as fast, or jumping as high, it’s totally the same as being 20.
That’s what I’ll keep telling myself and on the plus side, it should feel less financially stressful than your 20s.
What other financial goals should be on this list?