Last updated: March 2024
Key Takeaways:
- Establishing financial stability before turning 30 is crucial.
- Key steps include creating a budget, building an emergency fund, and starting retirement savings.
- Reducing debt, improving credit score, and considering long-term investments are also important.
Introduction:
Approaching the milestone age of 30, it’s imperative to lay a strong financial foundation for the future. This pivotal time calls for strategic financial planning, from budgeting to investing, to ensure a secure and prosperous journey ahead. Here’s what you need to consider to navigate your finances with confidence as you approach this significant decade.
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What should I do with my finances before turning 30? Before turning 30, you should focus on creating a solid budget, saving for emergencies, starting a retirement fund, paying off debts, improving your credit score, and exploring long-term investment opportunities. These steps are essential for building a stable financial future as you enter a new chapter of adulthood.
- Have two accounts
The number one problem that every one faces is saving. It’s difficult to save. This is why I suggest setting up two bank accounts. One is for your daily transactions and expenses. This is your primary account. Then create another one, a secondary account, just for the saved money. For the second bank account you shouldn’t hold any debit or credit cards, even if the bank gives it to you. Hide it inside your house somewhere. One is always a savings account and that you don’t touch.
- Save first, Spend Later
This is the most talked about tip in all finance articles, but this isn’t practiced. When you get paid you get super excited and spend crazily. When you are young, and you get paid money in the beginning of the month, you finish off 70% of your salary in the first 15 days. This is a bad way to live. Whenever you get paid money, make sure to save the money first and then keep money ready for your expenses.
- Know your expenses
Having a sub conscious awareness of how much you can spend does wonders. If you aren’t sure how much to be spending when you go out, or on a month, then you are going to splurge and you will be broke by the end of the month. You should at least be saving 20% at the minimum of the income you make and the rest of your expenses should be split between rent, electricity, gym, internet and you should have an awareness of how much you can spend for entertainment and partying. So have a mental idea of how much you are allowed to spend and then anything extra you have in your account, put it back in your savings account. Or if you are like me, the extra can go into a travel budget which I add money to travel the world.
- Live within your means
We are all too eager to grow up too quickly and want the big life very soon in our lives. Sometimes we have friends who are extremely wealthy and are able to afford rich meals and visit costly restaurants all the time. You need to know where you stand. Don’t stretch your lifestyle. If you cannot afford it, don’t do it. Don’t run behind branded bags just because your friends are carrying the same thing. This is a hard truth, but nobody is going to tell you this. If you are obsessed about branded products, then look out for clearance sales and discounts and jump when you get the opportunity. You should be able to do one or the other.
5. Invest like a boss
Money saved is money earned. Money invested can be wealth earned. Thanks to the world, the money you save can double or triple and make you wealthy. Investing in stocks, bonds and a variety of investments can set you up very well for the future. If you don’t know how to invest then contact a small brokerage firm whom you trust to get you to invest on your behalf. No point in wasting time. Look for long-term investments, where you can make dividends out of the stocks you invest in.
Thinking about money seriously can really make your life easier in the future. When you are young there is a feeling on invincibility. This world is unpredictable and it’s run with money. If you get it right, you can hope to have a comfortable future when your risk appetite is much lesser.
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