Before you turn 30, it's important to make saving your money a habit. Where you decide to start saving your money will depend on your own financial situation. If you're looking for a savings account that offers a higher rate of return, we recommend a Money Market account. The Money Market account has a tiered rate structure, which means the higher your balance, the higher your rate of return.
For most of us, the burden of student loans is inevitable. Pre-30 is the best time to start laying down the groundwork for attacking that debt. Even if your loan has a competitive rate, you should still focus on knocking down the amount you owe as quickly as you can. When you can, try and make additional payments to save yourself on interest and lower the total amount owed.
What happens if you’re in an unexpected car accident or you lose your job? Most of us think that it won’t happen to us, but life tends to have other plans. So before you turn 30, it's important to build up an emergency fund for when the unexpected happens. Ideally, it’s recommended that you have six months of living expenses saved up. But, if you’re just starting out, that may be a bit difficult, try and save up $1,000 to start and build from there.
Once we hit our 30s, we should have a routine that fits our lifestyle and helps us reach our goals. We found that by giving every dollar a “job” and understanding where our money goes helps with this. You can start by examining your paycheck and making sure you understand everything that comes out of each paycheck. Ask yourself questions like "Am I withholding enough?", "Am I taking advantage of the health and lifestyle benefits offered by my company?", and "Are there other pretax savings options I can be taking advantage of?".
Once all of the necessities are taken out of your paycheck, take a look at what you have left and determine how much you can set aside to save each pay period. You can set up automatic withdrawals from your paycheck to go to accounts you have set up for saving. You can also take advantage of bill pay and ensure that your bills are paid on time.
When should you start saving for retirement? Now. It may seem like retirement is years away, but by saving now you're setting yourself up for a more secure financial future. Take advantage of your employer’s 401(k), a tax-advantaged retirement account allowing you to build your wealth over time. Most employers will offer to match, meaning they will match what you contribute up to a set amount. If you don’t contribute up to the amount they match, that’s free money you’re letting get away from you.
You may also want to consider an IRA account to help save for your future.
This is the perfect time to finish that graduate degree, get that certificate, or take that class you’ve been thinking about. Looking for ways to continually grow and better yourself can help you to become more successful.
You can save as much as you can now, but also take the time to enjoy life a little. Pre-30s means you have a little financial flexibility. Take that budget-friendly trip, invest in a certification or graduate degree, or get that big budget item you’ve been saving to purchase.
Don't wait to start! Time is on your side, so make the most of it while you're in your 20s. By getting a head start on your finances, you’re setting yourself up for a more financially secure future.