You’re in your 30s. You’ve got a lot going on. You’ve got a job, maybe a family, perhaps a side hustle. You’ve got some bills to pay, dreams to chase, and fun to have.
But are you in control of your finances? Maybe you are buried in a mountain of credit card debt, have minus $100 in your savings account (what savings?!), or have been dreaming of going on your next vacation or starting your own business..
The right question would be, how do you set and achieve money goals that help in a realistic, manageable, and rewarding? How do you balance your current needs and wants with your long-term vision?That’s what we’re here to talk about. You still have plenty of time to get your money in order and set yourself up for success (35 is the new 25!). We’ve got 5 essential tips to help you on your way.
Let’s get started.
1. Pay Off Your Credit Card Debt
Credit cards are magnets for accumulating debt. The more credit cards you get, the more bills you have to pay. The average APR these days is 24%. This means that if you buy $100 dollars worth of groceries and don’t pay out your balance at the end of the month, you will effectively end up paying $124 . This can spiral into a vicious cycle, of debt making it hard to have leftover money each month.
A personal loan could help you lower your interest rate, simplify your payments, and save money in the long run.
However, not all personal loans are created equal. You need to find one that suits your needs, budget, and credit score. And that’s where MoneyLion comes in. MoneyLion connects you with lenders who offer personal loans for various purposes, including credit card debt consolidation. You can compare rates, terms, and features from multiple lenders in minutes and choose the one that works best for you.
2. Pay Off Your Student Loans
If you went to college or grad school, chances are you have some student loans. The average student loan debt in the U.S. is almost $38K (thanks, boomers!). And while they may have helped you get an education and a career (maybe), they can also be a significant roadblock towards achieving your financial goals like buying a house, starting a business, or traveling the world.That’s why another money goal you should aim for before you are 35 is to pay off your student loans. Or at least make a dent in them. The sooner you pay off your student loans, the sooner you’ll save on interest, and help boost your net worth.
Paying off your student loans may seem daunting, but it’s not impossible. And it’s worth it because every dollar you pay off is a dollar closer to financial freedom.
3. Save For Retirement
Saving for retirement may not seem like a priority when you’re young and have other goals to pursue. But trust us, it is. Retirement should be about having the freedom to comfortably live out your golden years in a manner of your choosing, such as an elderly base-jumping group. The earlier you start saving for retirement, the more time your money has to grow and compound.
But how much should you save? And where should you save it? Well, there’s no one-size-fits-all answer to that question. It depends on your income, expenses, goals, risk tolerance, and tax situation. But here are some general guidelines:
- Aim to save at least 10% of your income for retirement every year.
- Take advantage of any employer-sponsored retirement plans like 401(k)s or 403(b)s.
- Contribute enough to get the full employer match if available.
- Consider opening an individual retirement account (IRA) if you don’t have access to an employer plan or want more options.
- Choose between a traditional IRA or a Roth IRA, depending on your tax bracket and preferences.
- Consider Investing your retirement savings in a diversified portfolio of stocks, bonds, and other assets that match your risk profile and time horizon.
- Rebalance your portfolio periodically to maintain your desired asset allocation.
- Increase your savings rate whenever you can, especially when you get a raise, bonus, or windfall.
Saving for retirement may not be the most exciting or glamorous money goal, but it’s one of the most important because it’s not just about saving money. It’s about saving your future. Investing is subject to risk of loss, including loss of principal.
4. Start Investing
Investing can put your money to work for you, and that’s a big help to those building wealth or seeking financial independence.
Investing money can help you create passive income, which is income that you earn without active involvement or effort. Passive income can come in many forms – such as dividends, interest, rent, royalties, or capital gains. Passive income can supplement your earned income (income received as compensation for your labor), which you can use how you please – like to cover your expenses or fund your goals.
But how do you start investing? Again, there’s no one-size-fits-all answer to that question. It depends on your goals, risk tolerance, time horizon, and knowledge. But here are some general tips:
- Start with a clear goal and a plan. Know why you’re investing, how much you need to invest, and how long you have to invest.
- Educate yourself on the basics of investing. Learn about different types of investments, how they work, and how they fit into your plan.
- If you are considering stocks, be sure to do your research on the stock market and keep track of stocks using tools like MoneyLion’s stock tear sheets.
- Choose an investment platform that suits your needs and preferences. You can use an online broker, a robo-advisor, or a financial advisor.
- Diversify your portfolio across different asset classes, sectors, and regions. Don’t put all your eggs in one basket.
- Invest for the long term. Stick to your plan and ignore the market noise.
- Reinvest your earnings. Use the power of compounding to grow your wealth faster.
Investing money may seem intimidating or complicated at first, but it doesn’t have to be.
5. Build Up Your Credit
Credit is another essential component of your financial health and success. Credit is your ability to borrow money and repay it on time and in full. Your credit history or ‘credit score’ is how banks, lenders, and financial services determine your access to loans, mortgages, credit cards, and other financial products and services.
Having good credit can help you achieve many of your goals and dreams. But having bad credit can prevent you from achieving those same goals. Or make them significantly more expensive and difficult, like buying a home, or car.
That’s why one of your money goals before 35 should be to build up your credit score and history. And one of the best ways to do that is to use credit cards responsibly.
So, how do you use credit cards wisely? Here are some best practices:
- Choose a credit card that matches your needs and goals, whether it’s a cash-back card, a travel rewards card, a balance transfer card, or a secured card.
- Pay your bills on time and in full every month. This is the most critical factor in building credit and avoiding interest and fees.
- Keep your credit utilization low. This is the percentage of your available credit that you use. Aim to keep it below 30% at all times.
- Monitor your credit score and report regularly. Check for errors, fraud, or identity theft.
- Don’t apply for too many credit cards at once. This can lower your score and make you look desperate for credit.
- Don’t close old credit cards unless they have annual fees or other drawbacks. This can lower your score by reducing your available credit and average account age.
Using credit cards smartly can help you build your credit score quickly and easily. And once you do that, you’ll unlock more opportunities and benefits. This is the way.
These goals take commitment. They require a bit of discipline, some patience, and a dash of sacrifice. If you’ve read this far, you’re on the right path.
And if you need help along the way, MoneyLion is here for you.We believe in you.
So don’t wait. Life awaits.