Personal Finance Things to do Before You’re 30


Birthday CakeTurning 30 can be a scary, confronting and sometimes even depressing time for many people, as they realise that the carefree days of their 20s are behind them, and ahead lies responsibility and a lot of hard work. It can also be a confronting realisation to suddenly find yourself ‘old’ and this feeling can be compounded when you realise you haven’t achieved all the things you wanted to do before you did get old.

Therefore, to help make sure your 30th birthday is a time for celebration of your achievements, you need to start thinking about your personal finances before you’re 30 years old. In taking control of your finances and putting plans in place for your future, you can be more successful that you could have imaged by the time you’re 30.

There are just a few things you need to do with your personal finances before you’re 30 years old, such as:

1 – Balance your life now

You don’t want to look back when you’re 30 and wish you had had more fun, done more things or gone more places. Therefore, while you are still in your 20s make sure you enjoy life and strike a balance between work and play because this will allow you to set up financial security for your future without forgetting about the present, while instilling important habits about work life balance for a happier lifestyle on the other side of 30.

2 – Look after yourself and your career

Your future earning capacity is a more important investment and will offer better returns than any savings account or portfolio you can find. Therefore, concentrate on developing your skills and experience to advance your career in your 20s so that you will have your pick of high paying positions after you’re 30. Pursuing an online mba program when you’re young and motivated is going to prepare you even more for job opportunities in the future.

If you are just starting to get your career going, there are also more opportunities than there have been in the past because a lot of the baby boomer generation are now retiring and leaving significant labour shortages. If you’re in a position to take advantage of these opportunities with the right experience and qualifications then your finances will benefit in the future.

3 – Set goals

Now is a good time to get into the habit of setting goals and achieving them, because it has been proven that people who plan for the future end up wealthier than those who don’t – for example, you’ve got a better chance of paying off your car loan if you set yourself a goal of paying it off in two years, compared to not setting a goal.

Not all of your achievements need to be as proactive because it can help you on your path to personal finance success to simply write down your goals for the future. Crystallising your dreams and taking control of your life will help you set a path, and take advantage of opportunities on that path which match to your goals.

4 – Plan for the short term

As much as you feel you should be planning for your retirement, before you’re 30 is not the time to do it. So much can change in financial markets and planning in 30 years and as a result, planning for the long term can be futile.

Instead, look at setting short term goals such as paying off credit card debt or personal loans, or goals in your professional life which can help advance your career such as reaching productivity targets. Once you achieve each short term goal, set the next ones, these could be buying a house, being promoted or upgrading your car.

It is important to remember that you can’t achieve bigger goals in the future without first achieving smaller ones in the short term. For example, if you want to have a net worth of $1 million when you are 40, you will need to start now by saving $10,000 and then $50,000 and so on.

5 – Plan for the long term

If you work on becoming financially secure before you turn 30, then you will in turn be more prepared for your future and your retirement, even though you don’t have to start deciding how to distribute your income from your superannuation.

Of course, you should make sure to keep track of your superannuation accounts, because in your 20s you may have already had several different employers, and each one probably deposited your super into a different account. Therefore, shop around for the best super fund and roll your contributions into one account. At the moment the best super fund is one with low fees and easy access, and returns which beat inflation.

6 – Continue to spend less than you earn

When you enter your first job out of high school or university, it is easy to spend less than you earn because you are used to living the lifestyle of a starving student. As you consistently bring home a bigger pay check and become absorbed in the workplace lifestyle, it is tempting to eat out for lunch every day, buy coffees from the cafe on the way to and from work, update your entire wardrobe all at once, and park a better car in the employee lot.

However, it is important that you continue to exercise discretion in your spending and don’t inflate your lifestyle too much too quickly. Instead, put the difference between what you earn and what you spend into a savings account or towards debt or personal loans. It is much easier to maintain a frugal lifestyle to maintain financial security, than to live beyond your means in a lavish lifestyle, and have to return to frugality when you become smothered in debts.

7 – Understand your finances

Out in the world in your 20s your parents are no longer there to explain and guide you in what you should be doing with your money and why. It is now your responsibility to become financially literate before you are 30 because the knowledge – and the habit of gathering that knowledge – will serve you for life.

Also, the more you know and understand about your personal finances and the financial markets in general, the better informed you will be when it comes time to make decisions and set goals, meaning you will make better investments and fewer mistakes. Being knowledgeable about personal finance also means knowing what is going on with your personal finances too, so make sure you keep detailed records, keep all contracts and paperwork relating to your finances and accounts so that you remain in control, and know exactly who to contact if you need more information or to resolve an issue.

8 – Take good risks

With calculated risks come rewards, and before you’re 30 is the best time to take risks, because even calculated risks can go wrong, but you’ll have the time and the motivation to recover. However, there is generally little to recover from when you take good risks such as moving to a bigger city with better employment opportunities or going back to studying to advance your qualifications because the potential returns are great.

Taking good risks is also essential to getting ahead in your personal finances because just as you don’t want to look back and regret the run you missed out on, you also don’t want to regret investments not made, and returns not earned.

9 – Learn the difference between good debt and bad debt

This is a lesson many people well into their 30s have yet to learn, so before you’re 30 you have the opportunity to realise the potential of borrowing for investments, and the detriment of borrowing for depreciating assets.

Good debt is when you borrow money to purchase shares or an investment property, because these things will generate income and appreciate in value over the long term. Plus investment loans often have substantial tax benefits based on a tax calculator which can save you money. You can also accumulate good debt to buy a house, to pay for further education or start a business because you are getting value from the money.

However, when you use borrowed money to fulfill short term needs such as nights at the clubs, countless luxury holidays or brand label clothing, you are ending up with items which are worth less than when you bought them and often can’t be sold to recover the debt. Plus you are paying a higher interest rate on your bad debt such as credit cards and this interest further diminishes the value and increases the cost.

10 – Know what you’re entitled to

In the example of good debt, an investment property can offer you significant tax deductions as you can claim all of the expenses of owning and maintaining the property on your income tax return. There are numerous examples of financial entitlements which could apply to you if you work with your financial advisor to properly claim them.

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  1. This was a great article and I especially appreciated #4 and planning for the short term. I’m starting to freak out about not only taking care of my present but feathering my own future nest entirely by myself working jobs that are still below what I expected to make upon graduation. Thanks for sharing, I am re-sharing on and will link back!

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