4 Important Money Goals You Should Reach in Your 30s
Reaching the age of 30 is a big milestone. You’re likely established in your career, you’ve reached your educational goals, and you’re (hopefully) pretty stable. One area that should also be relatively stable by this time is your personal finances. Here are four areas of your financial life that should be in order by the time you reach your thirties.
1. Invest for retirement
Save for retirement | Thinkstock
One important financial goal you should focus on as early as possible is setting aside money for your retirement nest egg. While it’s best to start saving as soon as you’re able (preferably in your 20s when you start your first job with benefits), if you reach this goal by 30, you’ll still have enough time to accumulate a decent nest egg. You’ll have to save more than if you began 10 years earlier, but all is not lost. Don’t wait until your 40s to set up a retirement account, reasoning that you can’t afford to save. You can’t afford not to save for your golden years. The longer you wait, the harder it will be to accumulate enough cash to retire comfortably. And if your employer offers a retirement match, take advantage of it. When you ignore a retirement match, you’re leaving money on the table.
2. Get proper insurance
Medical bill and health insurance | iStock.com/everydayplus
By the time you reach your 30s you should make sure you are properly insured. This includes life, health, and disability insurance. Even if you’ve been relatively healthy for many years, it would be in your best interest to prepare ahead of time just in case you experience a setback. Life insurance is especially important if others would be affected financially by your passing. “If someone will suffer financially when you die, chances are you need life insurance because it provides cash to your family after your death. This cash, known as the death benefit, replaces your income and can help your family meet many important financial needs like funeral costs, daily living expenses and college funding,” said the experts at Life Happens, a life insurance education website.
3. Attain financial literacy
Man with piggy bank | iStock.com
You should be at a point where you have a good grasp of basic personal finance. You should know what a stock is, the basics of banking, and how to establish and stick to a budget. If you don’t know these things by now, there are plenty of personal finance books and financial workshops you can take advantage of. “Research has shown that people who are financially literate end up with more wealth than those who are not. There is a strong monetary incentive for becoming financially sophisticated. Taking the time and effort to become knowledgeable in the areas of personal finance and investing will pay off throughout your life,” said Ken Hawkins, founder of Ohow Investor Consultants.
4. Have at least six month’s of emergency savings
Life happens when we least expect it. Be prepared for emergencies by having enough cash. This will reduce the chance that you’ll need to rely on credit cards to get you through a rough patch. Depending heavily on credit cards will just dig you into a deeper debt hole. Trent Hamm, founder of financial website The Simple Dollar, said saving for a rainy day isn’t meant to be torture.
Quite often, people who don’t have an emergency fund see the idea of having to save up money as some form of punishment—after all, money put in a savings account and locked away is money that can’t be used to live, right? Actually, it’s quite the opposite – having an emergency fund means that you do have room to breathe. You don’t have to completely panic if your car breaks down or if you lose your job or if you suddenly need to replace a hot water heater. Instead of having to find some way to squeeze those expenses onto a credit card or beg a friend for some money to help, you can just pay the bill — no worries.
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