While your 20s were likely filled with incurring a staggering student loan and maybe living off your credit cards a little too much, entering your 30s means it’s high time to get your financial act together.
As sad as it is to realize – unless you went to business school – you probably didn’t learn much about finances in school. A basic course in financial literacy should be a requirement in high school before opening your first bank account, but until that happens, many of us will continue to go through our 20s without saving a penny, or knowing the difference between a stock and a GIC.
As you get a little older and wiser, you’ll want to make these financial goals more of a priority.
Become Debt Free
For many of us, this means finishing off paying down those student loans. Others might have incurred considerable credit card debt, or taken out a business loan for their risky startup idea. Understanding your total debt and coming up with a manageable repayment plan should be your number one goal in your 30s if you’re still carrying a hefty sum around. The relief you will feel from being debt free is an absolutely incredible feeling.
Improve Your Credit Score
It’s probably safe to assume you would like to reach the point of home (or at least condo) ownership in your 30s. If you spent your 20s abusing your credit cards, raking up debt without paying it back on time, and paying your cable and phone bills late – your credit score is probably going to be so low you won’t get a good rate on that mortgage you want. Improving your credit right now is vital, and it doesn’t take years and years to fix – so find out your score and talk with a financial expert at your bank to come up with the best solution to improving your credit score stat.
Have the Insurance You Need
While you should already have health and life insurance taken care of, now is the time to make sure your beneficiaries are all up to date. If you are recently married or had kids, it might need an update. It’s also time to get the extras such as disability and renters or homeowners insurance.
Save For That Big Expense
Going back to the mortgage point – if you want to be a homeowner, you’re going to need a big chunk of money upfront for that down-payment. Once your debt is clear, putting away as much as possible toward this goal should come next. You’ll need to pay about 20% of the purchase price upfront, so figure out what your budget will be and work toward that amount.
Contribute to Your Retirement Fund
While you may be so focused on saving for the big goals that you’re not as concerned about saving for retirement yet – the earlier you start, the faster and larger it will grow. You might have been contributing a small amount in your 20s, but now is the time to step it up – that compound interest will fund all your golden year dreams.
Diversify Your Portfolio
If you were smart, you learned a little about investing in your 20s and maybe even opened up a GIC or bought equity in a company or three. Now is the time to sit down with an investment expert and learn what you can be doing to grow your money even more. The (very) general rule is, the younger you are, the more room you have to play with riskier stocks. The older you get, the more you’ll want your money in the safer bet.
Know Your Goals
While this list might seem overwhelming, it’s up to you to know where you’re at financially and where you want to be in 1, 3, or 5 years. Your 30s are about solidifying your personal, professional, and financial goals so that you can achieve them with rampant success. Figure out what you want out of life, and work toward the top 3 financial goals that will help manifest those dreams. Once you’ve crossed one off, add another. Trying to do it all at once might make your head (or wallet) explode.
