The period between when you start regularly earning money and when you turn 30 is an amazing time.
However, many people turn 30 and realize that they don’t have their finances in order, and if they had started working on it 1, 3, or 5 years earlier, they would be in a much better financial situation.
There are so many useful pieces of information that we found out after turning 30 that would have been so much more potent if we had learned it in our 20s or even late teens.
So, to save you the pain that we went through, here are 7 pieces of advice that we wish someone told us 10 years ago.
When to Start Saving
One of the questions that we get asked most frequently is when is the right time to start saving? That question has a simple answer – now!
The sooner you start saving, the more benefit you will see in the long run.
If you don’t have one already, then you should open up an ISA savings account as soon as you finish reading this guide.
You should also look into setting up a 401k as soon as you can.
Interest builds up more quickly than you think.
Budgeting
We understand that budgeting seems time-consuming, restrictive, and boring. However, it is a habit that all financially successful people develop early on.
Here is a super helpful guide to building a yearly budget by the amazing team at Credit Ninja.
If you want to be able to afford a car or pay off your debts then you need to be in control of your money. Having a budget is the only way to do this.
Having a budget doesn’t mean that you can’t spend money on the things that you want, it just means that you are spending with intention.
Credit Cards
Credit cards sound like an amazing idea, but they are something that you have to be really careful with.
We have often been told that you shouldn’t get a credit card until you can afford to have one. While on one level this is a good piece of advice, it’s not something we recommend.
Why?
Well, having a credit card that you only spend $50-$100 a month on and paying it off on time – is an amazing way to build a solid credit score.
The most important thing to remember about credit cards is that you should never spend more than you can afford.
Emergency Funds
No one really stresses the importance of preparing for emergencies to people under 30. If you don’t have pets or children that you have to look after, it can be a little harder to get into the mindset of preparing for emergencies.
One of the most important things you can do with your money is to put together an emergency fund. This fund should contain 3-6 months’ worth of wages. This fund will allow you to know that if you lose your job or something unexpected happens, you will have the funds to keep on living without taking out debts.
Paying off Debts
When you are young, everyone tells you to avoid getting into debt – but no one tells you how to get out of it. That changes today.
If you are in debt, it is important you go about paying it off smartly.
If you have multiple debts, you should consider taking out a consolidation loan. This will cut the amount of interest you are paying each month. You can then put the money you would be paying in interest towards paying the debt off early.
Remember that not making your monthly payments can damage your credit score, so it is important to prioritize doing that over spending money on yourself.
Goals
It is never too early to start thinking about long term financial goals.
We all have both long and short term financial goals.
A short term goal may be to buy a car, to go to school, or to buy some software that will make you better at your job.
A long term goal may be to buy a house, to own your own business, to have a certain amount of money in your bank account/
Take the time to outline what your short and long term goals are. Then start to take actions that will help you to move towards them.
Curb Over-buying
Unless you have a lot of self-control, there is probably at least one thing you buy too much off. It could be anything from buying takeaway when you have perfectly good food in the fridge, buying new makeup a lot faster than you can use it up, or new notebooks and never using them.
Whatever your weakness, you should try and move towards intentional spending. One of the easiest ways to do this is to challenge yourself not to buy any of that item for a month, 3 months, even a year.
You will surprise yourself with how much you can save.
