When you are in your 20’s you experience a lot of exciting changes in your life – graduating from college, starting your first job, buying your first car, getting your first apartment, etc. And of course not everyone moves at the same pace or takes the same path in life, but it is important to plan ahead and set some financial goals.
When you set financial goals, especially at a young age, it can set you up for financial freedom later on in life. It might not seem super important right now to plan 20, 30, or 40 years ahead, but doing so can give you more choices in the future. It is a great feeling knowing you are on track with your money, and now is the perfect time to start working towards financial security.
Here are 5 financial goals you should shoot for by the time you’re 30:
- Pay down your debt. Most people aren’t able to pay off their student loans by the time they are 30, but you can make a big dent in paying it down. You should also pay down any credit card debt you’ve accrued and even pay off any auto loans you have. If you know you will need a new car in the near future, start saving money now so that you can put down as much as possible.
- Plan for retirement. I know, retirement is so far away, and you have plenty of time to save. Trust me, the years start flying by and there is no better time to start saving for your retirement than yesterday! Even if you can only put away $50 a month, that money will continue to grow – although your goal should be 15% of your paycheck. Once you get used to putting the money away you won’t even miss it.
- Get comfortable with credit. Having no credit is right up there with having bad credit. Why? Because a lender won’t know if you are responsible or not. As mentioned in #1, pay down any credit card balances you’ve accumulated. Get in the habit of paying off your balances in full as you use your card. You’ll show that you’re an ideal candidate for credit and this will pay off greatly once you decide to purchase a home
- Save, save, save. You should have a few different savings accounts depending on what your financial goals are for your future. If you plan to buy a home, start saving for your down payment. Keep an emergency savings fund for those unexpected incident – car repairs, medical bills, etc. If you have kids, you’ll also want to start a college fund for them as well.
- Focus on a career vs. a job. Your 20’s is a great time to figure out what your career goals are. You can test out working a few different jobs or companies to find out what you really like to do. Take the time to create a solid professional network and to consider all of the options that are available to you. Just because you have a degree in a certain field, doesn’t mean you need to do that for the rest of your life if you find out you really don’t like working in that field. Your 20s are a great time to explore different options.
Your 20’s are the perfect time to establish solid financial skills. You can learn how to manage your credit and also fix any mistakes you may have made in the past – like paying bills late or running up large balances. Create a budget that you can live with and follow it. Need help creating a budget – check out this article: CLICK HERE. If you have these habits established, it will be easier to keep moving forward as life gets more complicated with kids, relationships or other career moves.
Litchfield Branch Manager, Vice President