Financial Moves Should Make Before Turning 30
Approaching “adulthood” can be rough, especially when it comes to finances.
Budgeting your first salary to pay your bill and other expenses can be tough, especially if you are also covering to pay your student loan.
It may be tough to start but it is better to learn the ropes of proper money handling at a young age. It’s common for young adults to be burdened with debt, and while not all debt is necessarily bad, it’s important to prioritize repayments. Better to pay down your debts with high-interest rates first. Loans that carry interest rates above 7% can be a major financial drain over the long run. Credit cards are often the culprit. Do nothing until that is paid off. Personal finance experts tend to stress the importance of having an emergency fund to cover unanticipated expenses to avoid long-term financial damage. If you are not set up to tap cash for something, it can derail you financially if you put it on credit card. The original expense can bloom because of interest.
Once high-interest debt is history, start stashing away money for emergencies. You can start by saving a 3-month cushion for unexpected expenses or emergency cash. Having a stash of cash gives you more freedom and control over your life, whether it’s leaving a bad job, starting a new career or exploring a new hobby or business idea.
You may also want to figure out what you really want with your finances. Create concrete goals can make a financial plan more realistic and successful. Setting goals that are “time-lined”. This will allow you to tailor your budget and set specific savings and spending targets.
You also need to be time conscious. So the earlier you get started, the better. First, the money comes out of your paycheck before taxes and also grows tax-free, so you won’t owe any taxes until you withdraw it.
Many of us leave the bulk of our assets in cash, which means they aren’t earning much from it. Explore the possibilities of “investment”. Some of us can be more hesitant when it comes to investing. But we have to know that fear can mean missing out on opportunities to grow and create wealth. Keeping a diversified portfolio with broad market exposure can help alleviate investing jitters. To get started, try to invest 1% of your paycheck and increasing the amount regularly. Investment can mean: “Pay yourself first”. Do it every paycheck, and you will never notice how far has your initial investment have grown.