Five Financial Goals to Achieve before You Turn 30
When in your 20s, you are young, resilient and looking forward to defining the habits and cultivating the inner self you will follow for the rest of your life. This is very true about your finances and should you inculcate great financial habits in your 20’s, you will be more financially secure for the future.
This also evolves the life stage when you create your career-path, get a life-partner, or prepare to establish your family. This makes it even more relevant to self-set savings targets for the Future. Five must-have savings goals are suggested for you to achieve before 30.
Build a Dynamic Emergency Fund
A very important task you ought to be saving for, is an emergency fund which is basically a back-up insurance policy for finances ensuring meeting budget targets and not sink into debt. You may use the emergency fund to cover for emergent medical expenses or house repairs, or cover living expenses, if suddenly laid off.
When initiating budget moves, you could create a small thousand dollar emergency fund. This emergency fund must be built over time with some savings to cover a month’s expenses, gradually increasing it to cover three to six months of expenses. The amount saved, is defined by your job stability and income-levels, debts incurred, and whether you have a single or double-income household. Your emergency fund ought to be very easy to access, so maintain it in a liquid investment vehicle or savings account.
Save for Down Payments for Your Home
A worthwhile goal in your 20s is saving for a down payment for your starter home. You need not purchase your first home in your 20s as your job stability and whether you want to stay where currently employed or possibly disinclined to buy your first home in your 20s, are factors for consideration.
A down payment is usually 20% of the purchase value of your home, but this is variable, depending on the area. But the larger the down payment, the lesser will be your mortgage payments, and the house you can afford will be nicer. You could possibly prefer a larger down payment to avoid paying private mortgage insurance. With early savings, you will be better off financially to buy a house when you need to do so.
Contribute Regularly for Your Retirement
The key to ensure adequate funds for retirement is by saving early and continue to save regularly till you call it a day. You ought to start saving for your retirement fund immediately after securing your first job. This is because compounding interest is your friend for life; the more you save when young, the more your funds grow and the more funds you have to enjoy your retirement.
You could start by contributing up to your employer’s match, till you are out of the clutches of debt. Then, you enhance contributions by keeping aside 15% of your income. This goal is reachable faster by increasing contributions if you get a raise or just by increasing 2% annually.
Start Investing Regularly
To build up wealth, you have to plan beyond only saving money and find ways to invest it. Preferably start investing money before you touch 30. As mentioned earlier, compounding of interest helps money grow quickly, and the earlier you start, the wealthier you’ll be.
You could possibly invest with the assistance of a financial adviser, who recommends sound investments and assists your building an investment portfolio. If you understand and can play the stock market, you could opt to invest through an online brokerage firm. The key to sound investment is diversifying risks across various companies and different stocks. Understanding risks associated with differing types of investments is essential. There is a tendency to be more conservative in investments as you age.
Establish the Savings Habit Early
A key habit to establish when in your early 20s is the essential habit of saving money for a rainy day. This ensures your always looking for very affordable options. You then shop at the most affordable grocery stores, take full advantage of coupons and also wait for items on sale. You definitely look for ways of reducing daily expenses, to ensure more money put away in your savings and investment accounts. This desirable habit also prevents you from piling up excessive debt. By embracing a frugal lifestyle, you have options available and could spend more on things that are of utmost importance to you.
More in Investments & Savings
Hilary Duff & Matthew Koma are Engaged! See Her Gorgeous Ring
It seems it was only yesterday when Hillary Duff was the young teen star of Lizzie Maguire, now she’s engaged for the...June 19, 2019
This is What Brad Pitt Has to Say About the Rumors That He’s Dating Jennifer Aniston
It seems that the shadow of their past relationship will forever follow actors Brad Pitt and Jennifer Aniston, because until today,...June 18, 2019
Harry and Meghan’s Son May Not be a Prince Today, But He can be Once Grandpa Charles is Crowned King
Even before Harry and Meghan’s child had been born, news of how he or she won’t get the title of prince...June 17, 2019
After the Bribery Scandal, Lori Loughlin’s Daughter Makes a Shocking Decision
Grab as many of those bronze palettes with your name of them, from your former dorm room and run like the...June 14, 2019
Beyoncé Just Revealed She Had a Difficult Pregnancy with Her Twins
Just when we think Beyoncé can do everything flawlessly, the famous singer just revealed in her new Netflix documentary, Homecoming, that...June 13, 2019
Take a Look At Anna Nicole Smith’s Daughter Dannielynn All Grown-up
The daughter of the late Anna Nicole Smith, Dannielynn Birkhead, is growing more and more into the likeness of her mother. ...June 12, 2019
Sophie Turner and Richard Madden’s Reunion at the Met Gala Will Make Every ‘Game of Thrones’ Fan Cry
Something Incredible happened for Game of Thrones fans during the 2019 Met Gala, which was the reunion of Sophie and Richard,...June 11, 2019
As Adam Sandler Returns to ‘Saturday Night Live,’ and Discusses His Firing from the Show Many Years Ago
Many famous comedians today had their start in long-running Saturday Night Live, one the most successful being actor Adam Sandler. Most of...June 10, 2019
After Nasty Legal Battle, Justin Theroux’s Neighbor and Lawyer Call Him a “Mob Leader”
Justin Theroux’s lawsuit (earlier involving ex-wife Friends actress Jennifer Aniston), against a neighbor in his co-op building in Greenwich Village has evolved as...June 7, 2019