Financial planning sounds incredibly boring. I’m feeling sleeping just thinking of those two words, ok well maybe not quite sleepy.
Financial planning might not sound like 2 very appealing words but when you look at them much more closely you’ll soon see the appeal behind them.
When you were younger you probably didn’t give much thought as to what your financial future might look like. This is a common issue among many young people.
I know I certainly didn’t think about money in that way when I was younger but I should have.
Perhaps a lot of the financial predicaments I found myself in may not have happened if I had understood money better.
Today I want to run through 8 things to do before 30 so that you can get a head start on planning out and reaching your financial goals.
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8 Money things to do before 30
1. Budget plan
Before you think about doing anything else, you must have a budget set in place. As boring as it might sound it will help you out a great deal so that you can see exactly where your money is being spent.
Without having a budget it will be impossible to save anything for the future.
You can get a copy of my free budget worksheet by filling out the form at the bottom of this post.
2. Pay off your debts
It’s imperative that you make a plan to begin paying off your debts.
Debts are basically a chain around your ankles. If you want to be financially free you must find a way to get rid of that chain.
Now that you have your monthly budget all planned out you can see exactly how much money you have coming in and going out each month.
With this in mind, you need to put aside some of that money to clear off any existing debts that you may already have.
It’s easy to ignore debts and just pay back the minimum each month but doing that will do you no favors at all.
By simply paying back a small amount on top of the minimum payment each month you could potentially save yourself thousands of dollars in the future.
Money that you could very well end up needing in an emergency of some sort.
3. Work on your career goals
If you set yourself with career goals very early on it will help you to build the stepping stones that you need to get there.
Don’t forget the saying “if you fail to plan, you plan to fail”
Never has there been a truer word spoken.
How can you get to your destination if you haven’t mapped out the route yet?
Dream big and never let anyone take that away from you. This is really important.
When I was in school I wanted to be an accountant because I loved numbers and figuring out how to solve problems in the best way possible.
At school, we had a careers day and everyone had to say what they wanted to be. I said I wanted to be an accountant and the teacher pretty much told me I couldn’t be and that I would be better suited to be a secretary.
Well, guess what I ended up doing serval years later? Yep, you guessed it I was a secretary.
My confidence was completely blown by the teacher’s comment and I believed I couldn’t do it. I had no plan of how to become an accountant so I missed the mark.
Passion alone can drive so much. You don’t have to be the best at doing something to do it, you just have to be able to work hard enough.
Set those crazy career goals and GO FOR IT!
Make a plan and write it down. Don’t just leave it in your head.
- In 1 year get an entry-level job
- In 3 years be in x position
- In 5 years making $x amount of money
- In 10 years start your own company or something else.
Don’t feel restricted by this. You can amend this as many times as you like so don’t feel that once you have it written down it’s done and dusted because it’s not.
4. Have an emergency fund
Make provision for an emergency fund, one day you will be so glad that you did.
Emergency funds are great backup plans.
Now it’s important to not get this confused with everyday savings.
Your everyday savings should be completely separate from your emergency fund.
Savings can be for all the nice things that you want in life but can’t necessarily afford right now.
An emergency fund is just that, its for emergencies like if someone were to suddenly pass away or you were to lose your job unexpectedly.
Your emergency fund should hold at least 3 months of your wages, more if you can.
Take part in the 52-week money savings challenge to help you get motivated.
5. Plan towards home ownership
We all have to live somewhere and I’m sure you don’t really want to be 30 years of age and still living at home with your parents.
Don’t get me wrong, if living at home with your parents is a “money move” then that’s all good. If you live at home with your parents because you can’t afford to move out then you need to revisit your long term plans.
Owning a home is the number one thing that all young people struggle with.
Parents have been forced to step in and help towards getting a deposit sorted. Often meaning that they have to forsake their own savings in order to do this.
If you know you want to be a homeowner in the future then it’s a good idea to plan towards that event rather than waiting for it to hit you in the face.
Decide how much you will need for a deposit. It could be roughly 20% of the value of the house in the area that you would hope to buy in.
Once you know that rough figure, break it down into years and then months.
For example to save $30,000 over 6 years
$30,000 / 6 = $5000 per year
$5000 / 12 (months) = $417 per month (or $5000/52 weeks = $97 per week)
Add this figure to your monthly or weekly budget spreadsheet and now you have a plan in action.
6. Consider investing
Investing money is a really great way to make your money work for you.
This is definitely something that I wish I had dabbled in when I was in my 20’s.
You should take the time to learn a little about investing money for yourself.
The more you learn about investing the more confident that you will become with your money and making it work to your advantage.
This is the number one thing that separates the rich from the working class.
People who are rich are not necessarily so because they worked really hard in a 9-5 job. It’s because they took a chance and did something different. They continuously have investment portfolios.
Rich individuals may have failed 100 times but 100 times they got back up again and that’s what truly counts.
I’m not suggesting that you invest all your money into an area that you know nothing about but you can dabble whilst gaining understanding.
Even investing $10 that you have spare is a good idea. Remember you can control your level of risk when it comes to investing.
Choose your investment opportunities wisely.
As a wise person once told me, never invest anything you can’t afford to lose.
If you follow this mantra you should be A-OK!
Acorns is a great place to start if you are unsure about investing.
You simply link your credit or debit card to your Acorns account and they track any spare change that you have from transactions and make it available for you to invest with.
The whole process is pretty painless and its a great way to learn a little more about investing.
You can take a look at Acorns here
7. Keep an eye on your credit score
Your credit score is there is to help you know how financially healthy you are.
It’s a good idea to keep an eye on this from time to time.
You might think, but I haven’t borrowed any credit or that you always pay things back on time but honestly, things can happen outside of your control that you may not know about.
Identity theft happens all the time and it can happen to anyone.
It has happened to people in the past and has gone undetected for years. You can avoid this by simply keeping an eye on your credit score with a company like Experian.
You will want to have good credit so that in the future you can use that to your advantage.
Having a good credit score keeps interest rates lower for you which in turn saves you money.
8. Make saving a habit
There are lots of ways that you can save money but some of the most basic ways I will list below for you.
Most people think that once you have been quoted the price for something that is the end of it. The truth of the matter is that prices are rarely ever fixed. You can always negotiate.
Its good skill to have, to always negotiate prices.
The more you do this the more opportunity you will have to save money for clearing debts and future payments.
3 Ways you can save money straight away:
If you haven’t heard of Paribus yet then you have definitely been wasting money.
Paribus is great for saving money. You simply download the app and it will notify you if a product that you purchased has dropped in price.
You simply shop as you usually would, Paribus will track any purchases that you make online and if the price drops they will help you get a refund on the adjusted price.
It’s a simple way to save money on things you have already purchased.
You can sign up to Paribus here.
Digit is another great way to make savings.
You just connect your bank account to Digit and they analyze your spending habits. Digit will then save the perfect amount of money for you each month.
It very much a set it and forget it type system because it is automated meaning that you don’t have to go out of your way to remember to save up.
This works perfectly if you have irregular income.
Ibotta is basically online couponing. You earn cash back on products that you purchase through them.
You simply download the app and go to “offers” where you will see products for sale. If you see something that you want to purchase you just tap the “earn” button and follow the instructions from there.
It’s so easy to use and it will save you money along the way.
Final thoughts on things to do before 30
If you put the above principles into place before you turn 30 I can guarantee you that you will already be one step ahead of your peers.
Being in your 20’s is the best time to start saving and planning your future.
It doesn’t have to be boring, and in fact the more you plan these things the more excited and more you will gain a drive to succeed financially.
If you can get these financial goals into place you will be well on your way to financial freedom.
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