Many twenty-somethings have this dreaded idea about turning 30. The notion that all the fun immediately stops and old age ensues is popular. So much so, some try their best to not embrace this newfound chapter.
While the idea of getting older isn’t necessarily a walk in the park, it’s an inevitable part of life. Until science develops a magical pill that shifts “Father Time”, we all have to make the best of what we’re given.
One of the ways we can do that is to implement strategic money saving habits before turning 30. Making the effort in your 20’s means your 30’s will be filled with more opportunity and fun.
If you’re approaching the big 3-0 and need some financial guidance, check out these nine money practices that’ll have you celebrating.
1. Check Your Credit Score
Once you reach your 30s, you’ll likely want to purchase properties, settle down or purchase a car. In order to do these amazing things, good credit is necessary. Bite the bullet, face your fears and check your credit. This will give you a good idea of what your spending habits are and how you can adjust. Some checking applications provide easy suggestions that’ll help you raise your credit score. Take those suggestions, pay your bills on time and you’ll be well on your way to buying your dream home.
Some credit card companies suggest getting a loan to consolidate your debts. A fast loan approval is a great way to pay off your debt and raise your credit score. Then, you only have to pay back the lending company. Check the interest with each loan to make sure you aren’t getting overly charged in a month.
2. Set Up a Savings Plan
If you haven’t already, it’s smart to open a separate savings account. Each time you get paid, place 10% of your check in that account. Over time, you’ll see how far that 10% really goes. The trick to really saving is to limit access to your accrued money. Don’t keep the card associated with that account on you. This will minimize the temptation to spend and keep you on a solid saving track.
3. Limit Your Credit Card Usage
The tempting credit card is so convenient in the moment, yet burdensome when your monthly statement is due. While spending limitlessly may seem fun, you’re really hurting yourself in the long run. It’s suggested not to exceed 30% of your spending limit to maintain a fair credit standing. Instead of reaching for the platinum card, reserve this for expenses you can easily pay back in full. Such include gas, groceries and small utilities. One great trick is to keep your credit card hidden from your usual cards. You can do this by leaving it at home or placing it at the very back of your wallet.
4. Create a Budget
Seeing your bills, expenses, and income on paper provides clarity. List your bills and their corresponding dates in order. This will help you delegate your money and understand when each bill needs to be paid. Print this list out and paste it on your fridge or keep it in your planner. Then, you’ll have a clear idea of how much “fun” money you have at the end of the month.
5. Implement the Envelope Method
This is a great way to make sure you have enough money for each of your obligations. Take each envelope and label it with the name of a bill. Then, place the necessary amount in that envelope and seal it. In addition to bills, incorporate fun stuff like going out to eat, grabbing a coffee and hanging with friends. The trick here is to develop a sense of self-control. Once your fun money is spent, you can’t tap into your other envelopes to cover your shopping. This will help you save and develop a healthy sense of self-control.
6. Create Two Sets of Goals
According to science, setting small goals and reaching them will keep you motivated to reach your major goal. Set a short-term spending goal that you know you can attain. A good example is, “I’m going to eat at home for x amount of days.” Once you’ve met that goal, make another one. The key is to keep building on your initial habit until you have a solid ground.
Next, make your long-time goal. This could be saving for a trip, a home, or a designated amount. Keep this goal at the forefront of your thoughts. This will help you truly stick to your goal without slipping. Be easy with yourself as this goal will take some patience. If you give yourself a reasonable amount of time, you won’t feel pressured.
7. Be Mindful With Your Spending
When shopping, ask yourself is this purchase 100% necessary. Then, give yourself three-day rule. If you’re still thinking about that item after three days, evaluate your expenses and see if you can purchase it. Once you approach 30, it’s best to get a handle on your self-control. This will help you save more money and stop unnecessary spending.
8. Check With Your Job for Retirement Plans
Some jobs provide saving options such as retirement plans, 4o1k’s and more. Ask your HR company if they provide these programs and how you can enroll. This will help you plan your future and have a little cushion should anything happen.
9. Gather Your Subscriptions
Over time, you may not realize how much you’re spending on monthly subscriptions, memberships, and boxes. Make a list of all the companies you have a subscription with. Then, eliminate the ones you don’t need or that are breaking the bank. You’ll be surprised at how much money you’re able to save by implementing this method.
As you approach the glorious age of 30, don’t let the “treat yourself” movement drain your account. Be wise with your spending habits and most importantly, remain mindful. Consult with a financial advisor for additional assistance if necessary. Implement these nine tips and you’ll be well on your way to financial freedom.