Category Archives: Money

Do These 5 Things With Your Money Before You Turn 30

We see lots of lists shared on the internet talking about what you need to accomplish before you’re thirty. Some of them tell you all of the countries you need to visit. Others detail the many adventures you need to experience, from skydiving to going on a blind date.

Today, I want to talk to you about the five things you need to do with your money before you turn thirty. These tips will set you up for success in your third decade and help forestall any quarter-life crises you may begin to experience.

1. Open a High-Yield Savings Account

Imagine if your savings account could be earning almost three percent interest simply for sitting in a certain bank account while you ignore it. Fortunately, it can with high-yield savings accounts. Two to three percent might not seem like much, but every penny counts, right?

My personal favorite high-yield savings accounts include Barclays and Ally Bank. They’re free to use and incredibly easy to set up.

There’s another reason besides the extra interest to set up a high-yield savings account. It allows you to separate your savings from the rest of your cash in a deliberate way. As you roll into your thirties, you’ll have more control over dipping into your savings when you really shouldn’t.

2. Make a REAL Plan to Tackle Your Student Loan Debt 

It’s truly terrifying how often I hear people in their late twenties saying that they refuse to tackle their student loan debt. No matter how insurmountable your educational loans may seem, ignoring them is simply not an option, especially as you enter the years in which you are more likely interested in settling down.

Don’t let your missed student loan payments destroy your debt, and stop letting them accrue ridiculous amounts of interest. Now is the time to formulate a solid plan on tackling your debt so that you don’t drag it around like a ball and chain for the rest of your life.

3. Learn How Your Credit Score Works – Then Improve It

If you’re too afraid to check your credit score, or if you don’t know how to check it, make sure you overcome these problems before you’re in the full swing of adulthood. Understanding how your credit score works and what it is an essential part of growing up.

Once you know what your credit score is, it’s time to work on improving it so that you can set yourself up for success in your thirties and beyond. Whether that means getting a credit card and continuing to pay it off on time or eradicating large chunks of untouched debt, do what you have to do to make that important number higher.

4. Identify Your Main Savings Goals in the Next Decade

Right now, you’re probably feeling relatively untethered. You might not have children, a spouse, a house, or even a car to worry about saving for. However, those circumstances could very well change once you hit the big 3-0.

Think about where your savings goals will take you over the next decade. Even if you don’t plan to have children any time soon, do you plan to have them before you’re forty? What about buying a house? Traveling the world? Having a big wedding?

Before you turn thirty, check in with your hopes and dreams, then determine how you can start saving for them far, far in advance. Trust me, you’ll thank yourself later when you have a Friends-esque thirty-year crisis on your birthday.

5. Check-in With Your Retirement Savings

Last but not least, let’s talk about the word none of want to really think about: retirement. Unfortunately, now is the time to stop goofing off and finally open one of those 401k things everyone keeps talking about. Unless you want to keep working until you’re 80, you’ve got to start preparing for your future today, not tomorrow.

Visit your company’s HR department to talk about your 401k options. They’ll be able to walk you through the process of opening one and teach you how to start contributing. Additionally, you may be able to take advantage of a company’s match policy, which is basically like tapping into free money for your future retirement.

If you don’t work at a company that offers a 401k policy, or if you’re self-employed, educate yourself on investing through IRA accounts. This may seem more complicated, but that’s no excuse for turning thirty and having no retirement accounts to show for all your years of work.

In Conclusion

Let’s be real: no 29-year-old wants to turn thirty. However, you can feel a heck of a lot better about aging if you’ve got your money working in your favor. Use these tips to start your third decade out on the right foot, and remember: age is just a number.

Things to Consider When Combining Finances With a Partner

Moving in with a significant other is a huge step and one that can be beneficial for both of you. However, I’ve seen my share of partners struggle with the addition of financial confusion to their already complicated relationship. It can be a rocky transition, even when you love each other.

If you’re on the verge of moving in with a partner and beginning to merge our finances, there are a few things you need to consider. Here are my top tips for making the transition as smooth and painless as possible.

You Need to Have a Real Financial Heart-to-Heart

In today’s society, talking about your financial mistakes and secrets can be as embarrassing as talking about that secret mole on your back or that time you threw up in class during high school. Unfortunately, no financial merger can survive if you both refuse to air out your dirty laundry.

The period before you officially combine finances should serve as a platform for an intense discussion about the good, bad, and the ugly aspects of each person’s money situation. Now’s the time to reveal that your credit score is low or that you’re facing 70 grand in student loan debt.

Although you might be nervous about opening your financial situation up to scrutiny from your partner, there’s nothing worse than unearthing money problems later on in the relationship. Rip the bandaid off now and have a frank, kind conversation with each other in which you’re completely honest about your finances.

Some topics to cover in this discussion include:

  • Any outstanding debt
  • Credit scores
  • Savings accounts
  • Salaries
  • Big financial goals
  • Subscription services or other monthly expenses

Talking About Your Responsibilities Beforehand Is Essential

Since you’re merging finances for the first time, it might not be very clear as to who is in charge of what. Who will pay the rent each month? Who is responsible for handling grocery shopping? What about monthly expenses like electricity, internet, and water?

Don’t wait until later to clearly define both of your goals. This will make it easier to start things out on the right foot. Plus, you’ll spend less time fighting about who let things slip between the cracks. You don’t want to wind up resenting each other because you never clearly outlined fiscal responsibilities.

Establish a Method for Checking In With Each Other and Your Finances

Although you definitely need to have a conversation about your finances upfront, the communication can’t stop there. Deciding to merge your finances means that you’re committing to sharing things with your partner, including when you splurge on a new toy or a fancy pedicure.

Between keeping up with your budget and re-evaluating savings goals, there are many topics to continuously discuss with your partner. That’s why I suggest setting up a time once a month where you can both sit down and review your situation.

Things to talk about at this meeting can include:

  • How much you both spent over the past month and where you overspent
  • Any financial changes you may face in the next month
  • Big expenses that are coming up in the near future
  • Saving goals and what needs to be done to achieve them
  • Any issues you have encountered, either with each other or with your finances
  • Ways to improve your financial situation in the coming months and years

In Conclusion

Combing your finances can certainly seem scary, but what’s scary is entering into a monetarily bound relationship without making boundaries and expectations clear. Take time to thoroughly explore your financial situations together before they become intertwined.

You’ll thank yourselves later as you watch other couples fall apart over budgeting arguments and hidden bank accounts.

3 Myths About Saving for Retirement

Unfortunately, there’s a lot of confusion surrounding the topic of saving for retirement. You’d think it’d be something we learn about in school, but most of us just gather bits and pieces of knowledge from parents, coworkers, relatives, or friends. Although almost everyone knows that saving for retirement is important, many people don’t have their facts straight.

Today, I want to break down three of the most common myths about saving for retirement. As a society, we need to do better about educating young people (and old people) about the value of saving early and saving correctly.

Myth #1: It’s Not Worth Saving If You Make Less Than $20/Hour

I can’t count the number of people who’ve told me that they aren’t going to save money for retirement until they’re making at least $20 an hour at a full-time job. So many people graduate from college and start a part-time gig that doesn’t pay well, and as a result, they assume that they’re not ready to save for retirement.

That’s simply not true. The earlier you start saving for retirement, the better, no matter how much money you make. Think about it this way. If you saved just $1,000 a year for retirement (about $83 a month) for three years after college, that money could be worth over $70 grand by the time you retire!

Every little contribution counts, so start now regardless of how high or low your salary is. Don’t wait until it’s comfortable to start saving. Trust me, the sacrifice will be worth it in the years to come.

Myth #2: You Can Only Save If Your Job Offers a 401K

Many people don’t even contemplate the idea of saving for retirement until they see a 401K listed in one of their job benefits. In truth, you can start saving for retirement much sooner, with or without a full-time job.

Even if you don’t have access to an employer provided 401K, you can open an IRA with a bank and begin socking away money for the future. You won’t get a company match, but you’ll get the same tax benefits and compound interest. You are never too young to start saving; I’d even recommend beginning your contributions at age 18. It’s not difficult to open an account, and you can easily learn to invest with something like the Couch Potato Method.

Myth #3: I Need a Million Dollars to Retire

Oh boy, don’t we wish this one was true. Reaching a million dollars in your 401K or IRA isn’t the end-all-be-all of retirement saving. At one point in time, a million could take you a long way after you quit working. Now, that isn’t necessarily true. People are living longer and inflation is changing the value of our dollar.

Experts estimate that depending on when you retire, you likely need 10 to 12 times the amount of your current income. That means that if you and your partner are used to living on $150K a year, you’ll likely want to have $1.5 million or more in the bank before you retire.

If you’re worried that you’re not aiming to save enough, reach out to a financial expert for advice. Don’t just assume that achieving the “millionaire” status will mean you can lead a cushy life once you stop working full-time.

In Conclusion

Don’t believe everything other people tell you about saving for retirement (including me!). Do your own research. Make your own calculations. Whatever you do, don’t leave the task until your 30s or 40s. The earlier you can start, the less you’ll have to worry when you’re old and gray.