When it comes to good financial health, there’s no arguing that the sooner you start, the better off you will be down the road.
While a secure retirement is far from the minds of most 20-somethings, they will all hope to be there some day. With that in mind, here are seven personal finance moves everyone should make before age 30.
1. Save soon and often.
This one’s a no-brainer. The sooner we start saving, the more we will have later in life. But do you know how much of a difference it can really make?
Consider this: Just $50 per month saved during a 40-year period equals $162,140. Saving $50 per month throughout a period of only 30 years causes that amount to drop to $70,900.
2. Build a good credit history.
Having a good credit history and establishing a good credit score is more important than you may think.
It can save you thousands of dollars in interest charges. It can help you save money on insurance. It can even help you land a great job.
Check your credit report often and maintain good credit habits. It is important!
3. Enter your 30s with as little debt as possible.
You should have as little debt as possible when you reach this milestone to allow you to begin ramping up your savings and start investing.
“Your 30s should be about
making money, not giving it away.”
4. Learn about investing.
Investing, whether it is through the stock market, real estate, precious metals or another asset class, is what allows your money to grow over time.
The interest you earn through the increasing value or appreciation of your investments will accumulate into real wealth by the time you retire.
5. Understand the trap of consumer interest.
Consumer interest, in the form of credit cards and other revolving debt, is the opposite of investing. While the interest from your investments works for you, consumer interest charges work against you.
The terrible truth is the interest rate you earn from investing will almost always be less than the rate you pay when borrowing.
6. Borrow for the right reasons.
What I mean by this is to never borrow to support your lifestyle. Only borrow to invest in your future.
This could mean borrowing to further your education, open a business or buy a house. Borrow to support anything that will pay more dividends down the road than it costs you to borrow now.
7. Create and live by a budget.
One of the most important personal finance moves you can make is to create and learn to live within a budget. Financial prosperity is not an accident. It is earned.
You are not entitled to a life of financial abundance. You create and keep it by being responsible with your money.
I really can’t stress the importance of beginning these financial moves early in life. The sooner you begin building good financial habits, the better off you will be down the road.
By starting young, it will be far easier to maintain them throughout your life. Even if retirement is the last thing on your mind at the moment, do yourself a favor and make these personal finance moves anyway. You will be glad you did.
Photo source: under30finance.com