The 3 Goals Every 30-Something Year Old Should Have
30 is a divisive number. To the young, it’s the time when you’re thrust into full blown adulthood, whether you’re ready or not. To the young at heart, 30 may be considered the early years before your true confidence shines, in your career, in your relationships, or even in yourself. Either way, your 30s are an incredible age when you’re comfortable with a bright future ahead.
The same can be considered for your finances. At 30, you are likely earning more than in previous years, but have not yet reached your highest income years. Similarly, your expenses are likely higher than in years prior due to rent/mortgage, car payments, children, vacations, and similar items. By 30, you have had some financially hard years and some good years too, but for the young at heart, 30 likely was not the hardest year or the best financial year of your life. Most financial professionals agree that this age is a perfect time to tackle these three financial goals:
1. Retirement Goals
A fantastic article by Forbes covers 7 commandments a 30 year old should make from a financial standpoint. One of their primary decisions revolves around how accepting a job offer can severely impact your retirement future. “A 30-year-old who doesn’t carefully research his or her benefits and chooses to work for a company with no company match or retirement contribution could be way behind someone who works for a company with robust benefits. For example, a 30-year-old making $75,000 a year who saves 10% of his or her income in a 401(k) and earns an 8% average return would have a balance of just under $600,000 at age 55. Compare that to a 30-year-old who saves 10% at a company that matches 5% and adds a profit sharing contribution that averages 5% a year. He or she would have almost $1.2 million in their retirement account—double our first example’s amount—at age 55.1”
2. Emergency Fund
Even if your money is tight, it’s so crucial to create an emergency fund. After all, you’ll never know when an emergency might strike, so do as the boy scouts do and always be prepared. Nerdwallet suggests, “Start by aiming to save enough to cover up to three months of your household expenses and gradually grow your emergency fund to cover at least six months of expenses. If money is tight, building an emergency fund can be overwhelming, so start small. Contribute an hour’s worth of wages each workday and gradually increase it to two hours’ worth of wages per workday. If that’s unrealistic, save $50 per week ($200 per month) and increase it to $75 a week or more as you are able. Use automatic deposits to your savings account to ensure regular contributions.2”
3. Major Purchase
And finally, your thirties are an amazing time to start planning for some major purchases in life. Whether that’s a new car or a new home, a dream vacation or starting a new business, always try to look at the bigger picture. Short - term sacrifices can lead to a long term rewards as you build the life you love!
*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2021 Advisor Websites.