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30-year-old financial check-up: 5 tips to make sure you’re on the right track

November 04, 2019

Do you remember when Family Matters and Boy Meets World used to be on back to back during TGIF?  Nothing better than Steve Urkel right into Topanga Lawrence. Those were simple times, weren’t they? All you had to think about was how many scoops of ice cream you were having that night. 

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Well, now you’re in your 30’s and have responsibilities. You think you have your finances under control, but aren’t totally sure. Don’t worry, I got you. Here are five tips to ensure you’re on the right path to financial success.

1. Advance your career and make that money

No one loves to network, but it is a necessity if you want to advance your career quickly and efficiently. I don’t mean you have to go to a Wednesday night mixer at a rooftop bar in NYC to shake hands and kiss babies. Instead, hop on Linked In and search for people who went to the same college as you. Is anyone in a profession similar to yours? Or maybe an industry you’d like to transition into? Hit them up for a cup of coffee or a quick call. If they say no, which I assure you they won’t, then they aren’t the type of person you want to network with anyway.

Tip: Ask questions and be sincerely interested in their response. Most importantly, LISTEN. The person who talks the most in a conversation is always the person who “thinks” it went best. Make sure they talk more than you. Lastly, ask who else they think you should talk to. Keep moving up the chain.

Your goal at this age should be to put yourself on the best path possible to make more money each year. Your expenses are growing, your income should be to. 

2. Prioritize debt

Now is the time to have a plan in place to eliminate all debt. You should start with high-interest debt, such as credit cards, and then make a point to address your student loans, if you haven’t done so already. This might mean temporarily pulling back on -- not stopping -- retirement plan contributions, but make sure to always contribute enough to receive your employer match if they give one.  That’s just free money!

3. Emergency fund

What is an emergency fund?  Simply put, it’s an account -- a high-yield savings account preferably -- that will only be used for unexpected expenses, such as a loss of job, unforeseen medical bill, or car breakdown. Three months’ worth of living expenses is the minimum amount this account should be funded to. However, if your employment situation is unstable or unclear, I prefer your emergency fund to have six months of living expenses saved. 

4. Be insured

Health insurance is necessary.  You probably have it through your employer, but if you are self-employed, there are some fairly affordable individual health insurance plans out there. 

Homeowners and renter’s insurance, depending on your living situation, are both necessary as well. Your emergency fund should be a backup plan to these insurance policies, but your primary protection will be your insurance policy. 

For example, if the home you were renting were to flood or have a fire, you’d have to pay out of pocket to stay elsewhere while things were being fixed up in the home. Your renter’s insurance will help subsidize this cost -- or possibly pay for it all -- while your emergency fund will provide backup if needed.

Disability insurance comes in two flavors; short term and long term. Short term usually covers you for 3-6 months, then long term would cover the remainder depending on your policy.  This could get fairly complicated, so I’ll cover this deeper in another blog post. Just know it is important to have and for the most part inexpensive.

Life insurance is necessary when there is someone else depending on your income, so we’ll bring it to the table to discuss once a client gets married, but more so when they have their first child. Term life insurance is also the way to go more times than not because it is cheaper than whole life, and accomplishes your main life insurance goal of income and family protection. Your individual situation may dictate otherwise so be sure to discuss this with your advisor.

5. Invest, invest, invest

It is not that complicated to become wealthy in life.  Save more than you spend. Invest what you save.  Sitting in cash for the next 35 years until you retire is not the best use of your hard-earned dollars.  Pretend that every single dollar you own is one of your workers and their job is to make more dollars.  How will you put yours to work for you?

Here’s a simple example using a compound interest calculator:

Initial Balance:  $0

Annual Contribution Amount: $12,000

Number of years:  35

Investment return: 7%

Total Contribution:  $420,000

Ending Value:  $1,774,962

Now is the time to get your financial life together. It will be a journey that evolves over time, but there is no better time than the present. If you are unsure where to start, reach out, I’ll be happy to set you off on the right track.

Disclaimer: This is meant to be general information and is in no way a recommendation for any investment product.