Making way towards the big 3–0 is bound to ignite significant changes in one’s life. This is the time when you are probably settled in your career, making good money, acquiring new financial commitments, and as a result, starting to acknowledge the importance of making sound financial decisions. Besides, turning 30 means that you are halfway to retirement, which means it’s time to have a clear plan of the financial milestones you aim to achieve. With demanding responsibilities kicking in, and with time flying by, you can’t afford to be reckless with your finances. As such, here are 7 money goals you need to achieve by 30!
Goal #1: Start Carving Out A Debt-free Lifestyle
In your early to mid-twenties, you are probably still immersing yourself in fun life experiences and using your little money to invest in yourself the best way you know how. And at this point, paying off your debts may not be a top priority. As you near 30 however, and as the fog of early adulthood begins to clear up, the thought of going through life with piles of debt trailing behind you just won’t stack up too well. Actually, entering your thirties while drowning in debt will only have you playing catch up with your finances. You will find yourself using your paychecks to pay off loans, plus the hefty interests they are likely to accrue and as a result, your financial life will be pretty messed up.
If you want to maintain your sanity as you go through adulthood, start paying down your high interest loans immediately. These can be auto loans, high-interest student loans or even credit card debts. Your late twenties are a time to get your hands on different loan consolidation plans and start bidding your debt-filled lifestyle goodbye. Even if you won’t be able to clear all your debts before 30, it’s good to have a plan in place that will point you in that direction. Once you clear your debts, you’ll have some wiggle room to start saving up for big expenses such as buying a home, your children’s education, a car, or even better yet, your retirement. On top of that, getting credit card debts off your plate will go a long way in building an impressive credit score which will be beneficial in many facets of your life!
Goal #2: Start Saving for Retirement
When you nabbed your first salaried job, the thought of calling it a career probably sounded like a far-fetched reality that would take an eternity to arrive. But as you inch closer and closer to your third decade, your employer’s retirement plan will slowly begin to get your attention. You may not realize this yet, but getting your retirement fund up and running by age 30 will give your money ample time to fully exploit the power of compounding, and consequently, multiply by a significant margin.
Most people who start pumping their retirements early, often attain their retirement goals faster, and with less strain. And besides, isn’t the thought of retiring while having enough money to relax and travel the world sound compelling enough? If you plan to retire by age 56 for example, hitting 30 means that you are just roughly two decades away, which is enough time to multiply your money.
From the time you land your first job, starting setting aside 5%-15% of your pre-tax income and grow this amount as time goes by. If your employer has a retirement fund, take advantage of that and if not, consider starting a Roth IRA which offers the benefit of taking back your original contributions when you so desire. The bottom line is, don’t wait until you are high up in the career ladder for you to start saving for retirement, just start now.
Goal #3: Save 6 Months’ Worth of Expenses in an Emergency Fund
Another money goal that you must achieve by age 30 is having 6 months’ worth of living expenses in an emergency fund. Regardless of your age, financial rainy days are something you will deal with, and if you haven’t yet, then they are on the way. I don’t mean to scare you, but this is just plain truth, and the more prepared you are, the more you are likely to pull through easily. Financial rainy days refer to emergencies that arise that have some sort of financial consequence to them and as you march towards your 30s, you need to realize that there’s going to be more of them.
As scary as this sounds, you don’t need to get all soaked up when you can have an umbrella to guard you. And in this case, an emergency fund will be your saving grace. Such emergencies can include things like job loss, unforeseen medical expenses, crippling business losses, or even a worldwide pandemic. Having money securely saved up to cater for such difficult times is an important financial habit that will carry you through adulthood. As a rule of thumb, aim to pump up your emergency fund to the extent that if you lose your primary source of income at this moment, you will comfortably take care of your living expenses for 6 solid months. I know this sounds like a lot of money to stash away, but trust me, you’ll look in the rearview and pat yourself in the back for having a safety net. And here is the best part. All you have to do is save up a small percentage of your monthly income, and within no time, you’ll have your emergency fund fully pumped up and secure.
Goal #4: Have A Side Hustle
Reaching 30 means that you are full blown into adulthood, hence more financial responsibilities are bound to come up. This makes a side-hustle another crucial money goal that you should attain by age 30. At this time, you are probably starting your own family, taking care of aged parents, saving up for a home, planning for a new car, and maybe servicing your student loans. Now imagine having just one income stream to cover all these expenses and still expecting to set aside some cash for your nest egg. Sounds like a pipe dream I bet!
This is why you need to start thinking of potential side hustles that will help lift the burden off your monthly income by the time you turn 30. By diversifying your income sources, you’ll find it easier covering your living expenses and still leaving some wiggle room for unforeseen financial thunderstorms. On top of that, you’ll find saving to be much easier since you won’t be working with a very uptight budget.
Luckily, side hustles are not very difficult to come by, and they can take different forms. If you are jammed for time, let’ say because of a demanding career, you can consider investing in real estate, stock market, or other ventures that will earn you passive income. If your work schedule allows some room for another side job, consider transforming your hobby into a thriving business starting an online business, learning a new skill and making money off it, or tapping into the growing freelancing market.
With a flourishing side hustle in sight, you can even decide to save up the cash from your side hustle and live off your monthly income.
Goal #5: Build Connections with Money-minded People
If you have your eyes on achieving financial stability by the time you are 30, you need to start cultivating healthy financial habits, and one of the best ways of doing this is by surrounding yourself with the right people. If you want to be a millionaire for example, have a millionaire in your circle of friends. Have a growing network of successful business people that will mentor you, and shed some light on your financial path.
Whether you find them in your line work, or through joining successful investment clubs, make sure you make the most out of time you spend together. Learn about their spending and investment habits, and some of the costly money mistakes they’ve made along the way. Because one thing I can tell you is that the road to becoming financially successful is much easier when you have someone to look up to.
In your late twenties, you are probably deep rooted in your career and you can easily forge such meaningful connections.
Goal #6: Have A Working Budget
Now here’s the plain truth. The ensuing years after turning 30 won’t be as rosy as your earlier years were, especially not financially. At this point, non-discretionary spending habits will only be setting you up for a wrenching road ahead, and the only way to save your sanity is to start budgeting as early as now. Unless you plan on having an ongoing affair with debt, you should master top-notch budgeting habits by the time you turn 30. Have a clear plan of how much money you are earning, and how you intend on spending it, and it doesn’t matter how small or big your monthly paycheck is.
As a matter of fact, budgeting is still possible even on a minimum wage, hence this shouldn’t be an excuse to plunge yourself into debt. Through budgeting you will get to analyze your spending cues, and in the process, block any cracks that may be stealing your bucks. Learn to prioritize on crucial living expenses such as basic necessities and crucial saving milestones. With these sorted out, you can them allocate some money to cater for extra lifestyle needs such as fitness, clothing and entertainment. Regardless of the budgeting technique you intend to use, just make sure it gives you an insight onto how you are spending your money.
Goal #7: Have A Clear Understanding of Investments
When you hit 30, the YOLO phase will be way behind you, and you’ll probably be thinking of ways to achieve financial freedom. In order to make your work easier when the time comes, start learning basic investment skills and knowledge before you hit 30. Start educating yourself on index funds, equities, tax free investment vehicles, real estate and any other investment option that you are interested in.
By the time you are 30, you should have clinched a good investment opportunity to help grow your savings and cushion your financial portfolio. Whichever investment option you settle for will depend on your income, risk-appetite, and long-term financial goals. If you are not willing to wait too long for your investments to snowball, consider high-risk high-reward options like stocks and crypto currencies.
Although risky, these markets carry great earning potential for visionary investors and the best way to manage this risk is to diversify your investment portfolio. Instead of putting all your eggs in one company for example, consider buying into different companies within different industries. This way, you will have spread out any potential risks and increased your chances of obtaining high rewards should the market favor you. If you are interested in the real estate market, start saving for your rental properties from the word go, such that by the time you hit 30, you won’t be too far away from making your big purchase. When it comes to investing, it’s good to start early; don’t even wait until 30, start now if you’re even younger!
So there you have it, the top 7 financial milestones that you must achieve by the time you hit 30. And here is the best part, if you start cultivating the right financial mindset from as early as now, you will find these goals very easy to achieve. Don’t wait until 30 arrives with all its crippling commitments for you to start keeping your finances in check, just start where you are and with what you have.