A Personal Finance Checklist To Kick Off Your 30’s

A personal finance checklist can help you achieve financial goals.

A personal finance checklist can help you achieve future goals.

A personal finance checklist can be useful to ensure you are on well on your way to achieving financial success (or even simply evaluating where you stand).

Your 20’s are a great time to figure your life (and yourself) out. By the time you are 30, though, you should ideally have much of your life in order. Today’s millennials do tend to take longer to get married and start their lives, as recent reports show, but in order to set yourself up for your later years, you should analyze and improve your finances now.

I just celebrated my 29th birthday at the end of April, which encouraged me to reflect on my life experiences thus far and consider the future. The last decade was focused on enhancing and nurturing my career and my personal life along with developing myself as a full-blown adult. Basically, I spent the last 10 years getting my life in order.

As I prepare for a new decade, it’s time to take the next steps for my future. One of the first steps includes using my own personal financial checklist to accomplish over the next year in order to achieve more of my financial goals. With each milestone, my monetary ambitions change, and yours should too. I’ve already accomplished some of these topics and others still need improvement. As you begin to map out your own, this personal finance checklist will hopefully help you in more ways than one as well:

Budgeting 

  • If you have not already created a budget for yourself, you should do this first and foremost. Tracking your income and expenses is definitely not fun, but it does help to keep you in check and help you build wealth.

Reduce your debt 

  • By the time I was 27, I had paid off my car and two credit cards. My credit score not only went up significantly following these achievements, but I was able to use the money I was using toward this debt to increase my savings account. While I still have my student loan debt I am working on, my credit cards were my top priority to pay off as their interest rates tend to be higher than student loans. I’ve been able to pay more than the minimum amount each month over the last few years with less debt hanging over my shoulders though.

Save for retirement 

  • If you have not been lucky enough to have a 401(k) or similar retirement plan with your job, it’s time to open your own Roth IRA or another retirement savings account option. If you do have a 401(k) with your employer, start contributing more toward this fund. Ask your employer about a match program they may offer and do what you need to do in order to take advantage of this benefit. If you can swing it, you could invest in a separate plan as well as following one with work.
    • How much should you put toward retirement? A common recommendation is a minimum of 10% of your income. If that does not seem feasible at this time, especially with other savings plans you may be contributing to, such as an emergency fund, shoot for 2-5% and work your way up to the 10% goal.

Diversify your financial portfolio

  • As you reach your 30’s, this becomes important to include on your finance checklist. Mix up your investments through stocks, bonds and the like. Before going into such a venture blindly, be sure to do your research and even consult with a financial adviser or stock broker.  Buying stocks is pretty easy – you just need a brokerage account.

Plan for the future

  • No one ever wants to really think about dying or life emergencies, but the fact of the matter is, anything can happen to any of us at any time. As you begin to build financial stability, consider starting a family and reach more life milestones, you will want to contemplate the following:
    • Life insurance. Having a life insurance plan for you (and your spouse, regardless of whether or not he or she works) will be imperative in making any hurdles life throws your or your family’s way a little easier to deal with.
    • Naming beneficiaries on your accounts. Appointing your assets to various people in the event of your passing may not seem necessary at this point in your life, but you need to be prepared for anything. If you are not married and do not have a family of your own, you will want to consider leaving your financial accounts and any assets to your parents or siblings. Your beneficiaries will most likely change and need updated multiple times throughout your life, but get it started now so that it is not a worry later.
    • Estate planning. You do not need to be wealthy in order to start your estate planning. Get a power of attorney and a health care proxy to act on your behalf should you become debilitated and/or lose the ability to make your own decisions. Doing this will ensure you still have a full say in what happens particularly to you and your family.
    • Disability insurance. Regardless of age, you should be prepared for any event in life. If something happens that causes you to no longer be capable of working, disability insurance will provide you with a source of income.

Have a financial plan with your significant other

  • Married or not, live-in couples and relationships that openly discuss finances tend to have a higher success rate in surviving the partnership. Talk to your significant other about a financial plan and goals and compromise when needed.
    • Not married or living with a significant other? Create your own financial plan and be as specific with it as possible.

While a personal finance checklist may seem a bit daunting, it does not have to be all work and no play. It is still important to remember to splurge on yourself from time to time. As you become more financially responsible (and stable), you will find this much easier to do without placing much stress on your bank account.

Start a new decade off right with this personal finance checklist as a beginning point. If you are already in your 30’s and have yet to incorporate any of the above items, take some time to begin including these in your life goals and plan.

What would you add to the list?

 

What to Look for When Buying Your First Home

First-time home buying is exciting but also stressful.

First-time home buying is exciting but also stressful.

Buying your first home is an exciting new chapter in your life, whether you are tackling it as a bachelor (or bachelorette) or with your soon-to-be wife (or husband).

It can be fun daydreaming about designing your new home, but one of the biggest mistakes you can make is putting the cart before the horse. First-time home buyers have the tendency to house hunt first and prepare later. Avoid this mistake, which can cost you time and money, by following these guidelines before buying your first house:

  • Check your credit report and score. Don’t even bother reviewing all those online listings until you know whether or not your credit can handle buying a home. Even if your credit can handle it, you want to have a strong enough financial background that you will be able to get a lower interest rate on your loan. It is recommended to review this at least six months before the shopping process so that you can spend some time improving it.
  • Know what you need, and prioritize. There is a difference between needs and wants, and when going into a large purchase like this, you may have to make some sacrifices of what you want for what you need. Factors such as the neighborhood, school district and location should all make your checklist. Basing your home buying decision on looks and layout alone may leave you feeling regretful.
  • Know what you can afford. Getting your finances in order and knowing what you can afford each month for your new house will be imperative to avoiding future issues. Often, there are hidden costs that are forgotten once those papers are signed such as taxes, insurance, maintenance and so on. It is safer to over-estimate your monthly payments to ensure you are fully financially prepared. Another good home-buying practice is getting an idea of what your down payment will be. This venture is all about being as prepared as possible for all costs.
  • Get pre-approved. Once you know your credit score, it’s time to see how much you are able to borrow. Sellers want to know this number, and it’s important for you to realize your spending range as well. Getting pre-qualified for a loan will help to save you time and energy as you begin the process.
  • Find the best real estate agent for you. Buying your first home is no joke, so you should spend some time finding the right real estate agent for your needs, budgets and goals. Talk to co-workers, friends and families for referrals to try to find that person you feel like you can already trust. Take some time to shop around for a real estate agent as you shop around for your home. You may want to even look into hiring a realtor to take your search one step further and ensure that credibility.
  • Consider educational seminars or consulting. The best way to make sure you are making a wise home-buying decision is to know your stuff. Research, know what you are signing off to and keep yourself educated on the process. You may want to look into one-day seminars offered by real estate companies or even consulting with a mortgage lender to really grasp what to expect.
  • Get a home inspection. Last but certainly not least, get that home inspected. You definitely do not want to make such a large purchase without knowing what is beneath those walls. Issues within the home can be fixed prior to you taking over, which will be a huge relief off your shoulders. Just be aware of all the additional expenses in maintenance that would become your responsibility upon ownership.

Don’t be afraid to ask for help as you begin the home buying process. The more you understand, the better the chances are that you will set yourself up for financial success with your new home.

 

Financial Mistakes to Avoid As A Recent College Grad

Mistakes are unavoidable, but you should be especially careful when it comes to your finances.

Mistakes to avoid financially as a recent college grad

Mistakes to avoid financially as a recent college grad

As you prepare to graduate college, you also prepare for the “real world.” You’ve spent the last four years obtaining as much knowledge as possible in your field, making memories, applying for jobs, and writing and rewriting your resume. Graduates beware, though; student loans are the second highest form of personal debt, according to this New York Daily News article. And with college debts increasing, it will be more important than ever to have a smart financial strategy in place and avoid as many mistakes as possible.

By taking a step ahead of your peers in choosing wise investments, you can create healthy habits for your personal finances for years to come and avoid future debt issues.

Financial mistakes can be easy to make, but there are ways you can avoid them.

  • Having no credit. Everyone talks about saving money, and we are no different. Unfortunately, all this talk about savings has college graduates a little hesitant on taking out loans or credit cards in fear of creating an overwhelming debt. Plus, not to mention, college already creates those financial obligations, and it is increasingly harder for those under 21 to sign up for a credit card with no existing income. So, what’s a newbie to do? Build your credit history slowly and regularly by opening accounts and your own credit cards as you are able and paying them off by or before the due dates as well as routinely.
    • Why this is important: When you want to make big, future purchases, like a house, you will have a hard time being approved for a loan without a co-signer or at all. When I was still in college, I bought my first car with cash from money I had saved from my summer job. Not long after graduating, I needed to purchase a new vehicle, which proved to be a challenge due to my lack of credit. Over the years, I have been able to develop a favorable credit score through paying off a credit card, paying off that new (used) vehicle I finally was able to obtain and maintaining my bills.
  • Not having a plan. Having a limited or non-existent financial plan is one of the biggest mistakes recent college grads make. As a college student studying and working tirelessly toward that degree, you are lucky if you have two pennies to rub together as you battle the choice of groceries or rent. When you say “yes” to that first job out of school, though, it can be easy to fall into poor spending patterns very quickly. To avoid this, cut back on going out to eat by spending more time enhancing your cooking skills and spreading out your personal purchases instead of buying everything for your new apartment at once. Additionally, focus on always paying bills first at the beginning of every month so you know how much is available in the bank the remaining weeks.
    • Why this is important: Money adds up quickly, and developing these positive habits ahead of time can save you not only hundreds but possibly thousands per year.
  • Waiting to save and worrying about finances later. Consider consulting with or finding a financial mentor to help you along this new journey. Waiting to save or even failing to worry about beginning to pay off your student loan debt can cause inconveniences and hindrances in your future. Knowing where to invest savings is also tricky, but a certified financial specialist can help you. You could try to contact old friends from college with a finance degree who may be willing to provide some advice at no charge as they begin their careers.
    • Why this is important: The sooner you start working toward chipping away those student loan bills, the better your overall financial situation. If you were to plug your debt numbers into this student loan calculator tool, you may be appalled at the time frame it will take you to pay it all off (with interest) with a low monthly payment. Plus, creating a savings account will help to keep you out of potential sticky situations with money. And if you start investing now, you could be sitting pretty with a nice retirement fund.

By thinking about your future now, you can avoid these common financial mistakes recent college grads make, while building yourself a nice, comfortable financial safety net.