As we mentioned in last week’s post, good financial habits are like sunscreen – the earlier you begin to apply them the more you’ll thank yourself as you age. Last week, we addressed the specific needs of people in their 20s. This week, we are offering 15 SPF (Sound and Practical Finance) Tips to make life easier for people in their 30s: Finish paying off your student loans. If you took out a standard loan with a 10-year repayment schedule, and you completed college in your 20s, now is the time to wrap up that payment schedule. Then, to lighten that financial burden for the next generation… Open a college savings account for any children you have. Do this as soon as possible to allow those funds to earn compound interest. Consider buying a home but make sure it’s one you can comfortably afford. Shop around for the best mortgage rate and don’t panic purchase an overpriced house. Aim to have a year’s worth of salary saved for retirement. It will grow over time. Establish a good credit history by paying off your credit cards each month and making car, house and educational loan payments on time. If you have children, name a legal guardian for them. You will need a will to do this. Check the beneficiary designations on your life insurance policy. Do this annually to make sure they are current. Maintain an emergency fund with three to six months of income in it. Increase your job skills, obtain certifications and/or advanced degrees. Do the work now to increase your earning capacity later. Educate yourself about your finances. Read books, listen to podcasts, attend seminars and sit down with a financial advisor at least once a year. Achieve financial independence from your parents if you have not already done so. Pay for good insurance policies, including health, homeowners or renters, life and car. Plan your meals ahead of… | Read More »
Month: June 2021
Apply this SPF 15 protection to your money (for people in their 20s)
Good financial habits are like sunscreen – the earlier you begin to apply them the more you’ll thank yourself as you age. Toward that goal, here are 15 SPF (Sound and Practical Finance) Tips to make your life easier: If you have a 401(k) or other retirement plan option through your work, contribute the maximum each month, especially if your employer offers a matching contribution. Those employer matches are an important part of your benefit package so make sure you access them. Consider the magic of compound interest. If you invest wisely, any money you save will earn interest. As that pool of money grows, so does the amount it earns. For instance, if you save $3,000 a year annually from the age of 22 through 30 and you earn a respectable 6% on that money, you will have saved $34,761 in just those nine years. And, that’s where the magic begins. Because even if you never save another dime, that pool of money will continue to grow by earning 6% each year. If you don’t touch your original $34,761 and allow it to earn that 6%, you will have accumulated $267,175 by age 65. If you continue to save $3,000 each year between 30 and 65, and that money earns 6% annually, you could be a millionaire by the time you retire. Begin saving early, invest wisely and your 65-year-old self will be very, very happy with you. Develop the healthy habit of designing a reasonable budget for yourself and then sticking to it. There are plenty of apps that make this process less daunting than it used to be. But, you still have to look at the numbers. Sit down once a year and review your spending habits. Then, adjust your budget accordingly. Budgeting sounds restrictive, but if you commit to it, you’ll find you actually have more spending money than you did before you started paying attention…. | Read More »