Posted by Abundant Wealth Planning LLC

Ten Financial Benchmarks to Reach by Age 30

Ten Financial Benchmarks to Reach by Age 30

By the time you reach or are close to 30 years, you need to start a long-term business, which means saving and increasing your financial resources through income, savings, ROI, retirement savings, real estate, etc. Along with building up resources for what's to come, there are other financial goals you should be striving to achieve by the age of 30 to prepare for a successful financial future. Here are some financial goals everyone should reach by age 30.


Pay off your credit card.

Begin your 30s by paying off all your credit card debts from your 20s. If you've paid off all of your credit card debt before the age of 30, that's great! Once you've paid off your remaining credit card debt, you can focus on paying off your car loan debt, student loans, personal bills, and more. Paying off your non-mortgage debt will take you one step closer to higher mortgage payments.


Establish a good credit rating

A good credit rating is beneficial for several reasons. When you buy a new car, house, appliances, etc., your credit score will determine the interest rate you will be charged. A good credit score can lead to better results and save money over time.


Create an emergency fund

It is essential to have an emergency fund that can cover necessary expenses that may arise out of nowhere. It is ideal to have an emergency fund to cover up to three months of household expenses. Because an emergency fund is not an account you have to pay off, it can be easy to carry over. Setting up automatic deposits into an emergency savings account is a great idea, so you'll be making regular contributions. For starters, start saving a small amount of your wages. Create a savings goal of $50 per week, which works out to $200 per month, and increase your weekly savings goal when you feel most comfortable.


Stabilize your finances

You should now have a solid understanding of how to effectively plan your income. A budget tracks your income and expenses and can help you take financial control, identify bad habits, and figure out how much you can spend and save. Make sure you don't spend more than what you earn each month, at the very least, but making sure you have the funds to save without financial strain should be your goal.


Set a date and target amount for retirement

You should already be racking up savings on a 401(k) plan. If your employer does not offer one, you can always contact a financial advisor to explore the best options for you. You should also have a good idea of how much money you will have in your retirement accounts when you retire. The retirement age is 66, so do the math and find out how much you'll need by then. Your financial advisor can also help.


Consider asset allocation

Diversification is the key. Make sure that your asset allocation strategy balances risk / return with the return you feel comfortable with. When identifying other sources of retirement income that you can count on in retirement, besides the typical 401K, look for the Roth IRA, whole life insurance, and the Roth 401K. A tax professional can help you with all your questions and concerns regarding asset allocation and retirement income.


Make a will

Life is unpredictable. It's smart to always be prepared for the unknown. Take the time to write a will so that it can help you make important decisions if something happens to you.


Have regular conversations about money with your partner.

Whether or not you have a partner, conversations about money can be used as a time for reflection and clarity. It is important to create a common vision of your financial goals and those of your partner. Having a conversation can also create a structure for your finances. If you are single, it helps to have this conversation with yourself to make sure you achieve your goals.


Think about continuing your education

Keep learning to stay informed in the market! Consider returning to Community College, online education, part-time classes, or classes through a service such as udemy.com or other online learning repositories. There are many options, and it never hurts to expand your education.


Think about money for fun

Pleasure is part of life and if we couldn't have fun, life would be very boring. When calculating your monthly budget, put some money aside for the well-deserved vacation you wanted to take, the new movie that just hit theaters or the sports game you have wanted to go to.

It is important to understand how to be financially successful before the age of 30 in order to better prepare for what is to come.


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