Are you set up for financial success? The financial decisions you make in your 20s and 30s will have lasting consequences for the rest of your life. When you’re young, it can feel like you don’t have a lot of money to work with. That’s exactly why you need a plan for how you use it. By making the right choices today, you can lead a life with less financial stress and retire more comfortably.
Below are some of the most important financial goals you can achieve before you turn 30. Set yourself up for financial success early.
#1 Pay Down Debt
Paying back student debt should be one of your first financial goals after graduation. Student debt will have a lasting effect on your life. One study found that student debt can:
- Restrict your career options
- Discourage entrepreneurship and delay starting your own business
- Cause lower job satisfaction
- Delay starting a family or purchasing a home
The sooner you can pay off student debt, the sooner you can move on with the rest of your life.
#2 Invest in Your Retirement
When you’re young, financial advisors may tell you that you can “afford to lose” and push you toward higher-risk, higher-yield investments. You do have more time to earn and recover from any losses, but peak earning ages are coming earlier and you have less time to prepare for your retirement. Economic downturns are inevitable and your portfolio should be in a place that can adapt.
If you want to prepare your portfolio for a recession, you should consider investing in gold and silver. Gold runs counter-cyclically to the stock market, so when your savings invested in stocks are down, gold prices should be heading in the opposite direction. Gold gives your portfolio flexibility. You can sell gold at higher prices and snap up cheaper equities during the recovery.
You can start by setting aside 5% of your income to invest in retirement savings. Ideally, you should aim to grow this to 20% in time.
#3 Start Paying Bills on Time
Late fees are an unnecessary expense, and paying bills late – even when you have the money – is bad for your credit rating. Your credit history is checked for everything these days, from your mortgage to job applications to leasing a new apartment.
#4 Save for a House
If at this point, you’re wondering where all the money is going to come from to pay down debt, save for your retirement, and save to buy property, you should learn about ways you can fund your first down payment using registered retirement savings. Your home will likely be the largest purchase you ever make and take up a significant share of your assets, something many seniors rely on to retire.
#5 Save 6 Months of Living Expenses
Having an emergency fund is the best gift you can give your future self. Financial set backs such as unexpected expenses or job loss can put you into debt. People spend years recovering from maxed out credit cards and lines of credit. By giving yourself 6 months of living expenses saved up, you can give yourself time to get back on your feet without going into debt.
If you can accomplish these 5 financial goals when you’re young, you will be in a great position later in life.