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20 Tips For People in Their 30s To Better Manage Their Money

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20 Tips For People in Their 30s To Better Manage Their Money

Turning thirty, the big 3-0, is probably the most crucial financial crossroad in the lives of many people today. Whether you are embarking on a new career path, planning on buying a house, or preparing for the responsibility of children, how you handle this monetary pivot in your life can very well lay out the blueprint for what the rest of your finances will look like.

However, if you are willing to keep an open mind to the possibilities of new ways of thinking, there are some practical ideas that may be all the inspiration needed to take charge of your own life and financial security.

These 20 tips will give you a different perspective on managing money, well into your 30s and beyond.

1. Be patient and delay pleasure

As you approach your 30s, it is safe to assume that you have probably spent the better part of your 20s in college, surviving on ramen noodles and fast food. Your impulse upon entering your 30s will be to jump into the nice house, the cool car and begin living the American dream. But be careful not to accumulate more liabilities than you have income or assets to pay for.

2. Your house is not an asset

Most people have been conditioned to the belief that buying a house and owning real estate is the secret to financial success. This is really only half the truth. If your home is taking money out of your pocket, (i.e. in the form of a mortgage), instead of putting money in your pocket, (i.e. in the form of rentals or home businesses), it is a liability, not an asset. As you turn 30, be sure to understand the difference between assets and liabilities before making large purchases.

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3. Cut back on your vices

Leaving your college years behind, you might have accumulated more vices than you care to admit – alcohol, cigarettes, and undoubtedly fast food, just to touch on a few. To be honest, I have had more than my fair share of those 3 am greasy Taco Bell runs after a night out with friends. As memorable as these times were, a realization dawns as you enter a new decade. Not only are those nights hard on your health, they are also hard on your wallet.

Also, do not forget that as you go from a fun college atmosphere to a stressful work environment, what started out as a fun way to pass the time can become a detrimental and financially draining addiction or coping mechanism.

4. Learn to cook

You don’t have to be a gourmet chef by any means, but If you are serious about managing money, you must at least know how to prepare some basic staples and simple meals that will cut back on how often you have to eat out. It can also be very helpful to plan out your meals for the week ahead of time. This will help create your grocery budget and eliminate random spending on unnecessary food.

5. Don’t be content simply being an employee

In this day and age of rising inflation and stagnant wages, you will probably find it very difficult to make enough money to save and invest after paying for basic survival essentials like food, clothing and shelter. This hardship is a consequence of generations of conditioning children to aspire to simply become employees. Whole generations are told to get a secure job with good benefits and work hard. If you find yourself feeling smarter than your job title, you probably are. As you turn 30, start thinking of ways to accumulate the knowledge that inspires you to create something of societal value.

6. Write out a budget

This might seem like an obvious duh, but how many people do you know who have actually taken the time to write a financial plan, let alone learn how to follow one? Unless you write out a detailed budget, you are playing chicken with your financial future.

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7. Save first, pay bills later

Set a savings goal and adjust your lifestyle to meet it. Do not set your saving goal to meet your lifestyle, you will always be broke. Ideally, you should be saving about 25 – 30 % of your income after taxes. The logic in society today is to pay bills and then save. This way of thinking is one of misplaced priorities and an attachment to stuff. If you want to get ahead financially and create true wealth, you must learn to pay yourself first.

8. Go through your debit/credit card statements

Don’t just throw away those monthly statements from the bank, actually go through them. Think of it as a statement that reflects your spending habits or behavior. If you are running out of money before the month’s end, your statement will very well show those loose purchases that add up to cost you tons of money. Go through with a highlighter so you can color code your expenses. This system will help you build your budget.

9. Your time is your most valuable form of money

Time is the one resource we all admit to not have enough of, yet it is the most wasted of all resources.

If you spend 10 – 12 hours of your day at a job you don’t particularly enjoy, do you really believe you are managing your time well? If time is money, then you should learn to invest it in things that add value and joy to your life.

10. Ditch cable

With so many tools available for entertainment – i.e. Internet, YouTube, Netflix, Redbox etc. – it makes no sense to pay $150 – $200 per month to watch reruns. You are probably never home anyway and when you are, there are more effective and creative ways to pass time. Cutting your cable bill can be a good way to, over time, invest $2,000 in your future.

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11. Consider the cost of having kids

Having a child is a joyous occasion. However, as you consider growing your family in your 30s, be sure to understand the cost that having a baby can add to your finances. Not to say that if you are blessed with the unexpected gift of a child you won’t be able to lead a happy and financially secure life, but it will unarguably create a few more challenges for you to overcome. The care of another’s life is a huge responsibility and should not be undertaken lightly. So in an age where birth control options are innumerable, take the responsible route and plan for the right time to add to your family.

12. Do not Cosign a loan or lend money

“The borrower is always slave to the lender.” As you get older, you may begin to have family members and friends look to you for financial assistance in getting loans. But try to remember that the bank requires a cosigner for a reason. If the borrower misses a payment, there is a good chance they will come after you. As such, be very hesitant to cosign on any loan. Not only are you risking losing your money, but you are also risking the loss of a great relationship.

13. Be careful who your teachers are and question everything

There will be lots of people, especially family and friends, wanting to give you massive amounts of financial advice as you turn 30. Remember that when it comes to money, everyone has an opinion. Most people are enthusiastically ignorant. You must take every piece of information with a grain of salt. People who may seem to be doing well financially may really be broke and living off debt. Seek not just knowledge, but understanding. Question everything and be careful not to live a different variation of somebody else’s life.

14. Your success is determined by what you do in your down time

Most wealthy people will tell you that you are only as successful as what you do during down time at your job. Marshall Mathers’s rapper counterpart “Eminem” seized every opportunity to battle in freestyle raps, even on lunch breaks at work. Those precious moments of time used turned out to be worth millions of dollars.

Remember as you approach 30 that you will be extremely busy, overwhelmed with work and bills. How you manage your down time is a good reflection on how you will probably manage money.

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15. Avoid mind numbing activities

Social media and games like Candy Crush help occupy boredom. But remember that humans are most creative when bored. Just like down time, how you treat this boredom may tell how much success you have. You are more likely to think of something productive to do if you don’t numb and distract your mind with social media and games.

16. Shop by dollar amount, not by unit price or deals

In a world of coupons, mega savers and deals, do not loose money chasing a bargain. If walk into a store with a budget of $15 for a variety of groceries and see one item on sale at 10 for $10, it may not be a deal to you to get the item as your budget does not support the purchase. You simply can’t afford the deal. Going over your planed spending amount to secure a bargain will ensure that you spend the rest of your life doing just that. Again, be patient.

17. Have an emergency fund

Financial adviser Dave Ramsey has a principle that I love and practice and it is called a G.O.K. (God only knows) fund. You have probably gone through your 20s having your financial mishaps covered by Mom and Dad. However thing are about to get real in your 30s. As Mom and Dad begin to withdraw their help, you must learn to create your own safety net, lest Visa and MasterCard catch your slack.

18. Rethink higher education

As you approach your 30s, you are probably thinking of ways to increase your income. The general advice from parents and elders is to go back to school. However, there are many other ways to do this without the debt of a Masters or MBA. The train of thought that more education equals higher pay is an old way of thinking that doesn’t really apply to this generation. While a specialized degree may be relevant in some cases, you are best served to really count the cost of your education and weigh its potential return.

19. Reaize that your savings plan and 401K may not be enough for retirement

Saving money and planning for retirement are good habits to have. However they may not be enough to sustain you and your family in the future.
So far, you have learned a few new tools to aid your financial literacy. Start looking for ways to keep income coming into your pocket even well after retirement. In your 30s, you are able to take a few well informed, calculated risks.

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20. Be familiar with self-reliance and D.I.Y.

Self-reliance and learning to create or do things on your own is a big part to saving money. Fortunately, we live in an age of infinite access to information. For example, vinegar and water make a cheaper replacement for Windex. These types of tips for everyday living can be found on YouTube or Google and can really help save money.

These tips aren’t a guideline to strictly follow, by any means. But they are definitely some food for thought as you enter your 30s and seek ways to really buckle down on financial stability.

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Last Updated on July 20, 2021

Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

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Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

Have you ever considered your life now, and how it would be if you had more time to spend with your family and less worries about money?

Nowadays, financial stress is one of the most troublesome weights in life. If you’ve ever encountered financial stress, you know the difficulty of not having enough income to pay your obligations or bills.

Many people say that money is not the ultimate goal of life. While that’s true, money certainly plays a very significant role. The meaning of financial freedom changes with the different phases of our life, but ultimately, it is something that many people strive for.

In this article, we’ll explain how to capture that financial freedom you’ve been looking for. Read on to learn the secrets to financial freedom.

Break Free of Your Finances

Financial freedom is about having a constant flow of cash from your assets to cover all your regular needs.

When you are not worried about your income, or living paycheck to paycheck, you gain a great sense of freedom. It’s the freedom to be obtain and do what you truly need to make your way through everyday life.

Gaining financial freedom, though, is a process of growth, making small improvements and gaining emotional strength.

Though it seems hard to believe, it is really very simple to get financial freedom.

To do so, you simply need to make sure that your assets exceed your liabilities. In other words, you’ll need to find the sweet-spot where your residuals meet or surpass your expenses. This is something that you can achieve with the proper plan.

While not every person will accomplish financial freedom, the potential for anyone to do so is certainly there. Anyone can achieve this success, regardless of their income level.

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Outlined below are 9 secrets that will help you in your goals of achieving financial freedom.

1. Stop Unnecessary Spending

We often spend money inwardly, instead of objectively.

For example, you may spend when you’re anxious, depressed, restless, exhausted, from fear of missing out, or to please others. This is a very unhealthy way to handle your finances.

To stop this habitual spending, log down all your spending over the course of a month.

Just as some people keep a food diary, keep an expense diary. Remember not to just write down how much and what you spent the money on, also include the circumstances of why you spent the money. Was it an impulse buy at the checkout line or was it something you planned to purchase?

This increased self-awareness could enable you to avoid triggering situations in the future when you are considering an impulse buy.

2. Plan a Monthly Budget

This is a great opportunity to get serious.

Take a seat with your spouse or partner and make a monthly budget based on your income, not your expenses. You are never again going to spend more cash then you have on hand.

Overspending is the thing that led you to more financial obligations. Make sure you decide every month what is coming in and what will be going out and stick to that budget… no matter what.

3. Cut-up Credit Cards

Perhaps you are the type of person who always pays your credit card balance in full before the end of your billing cycle, and enjoys the reward points you gain. If this is the case, then you’re already way ahead of the game.

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If not, you may want to consider ridding your life of the burden that credit cards bring.

Many cards have strategies set up so that if you make a certain number of late payments, they will raise your interest rate much higher. This can really add up in the long run and you won’t be doing your financial situation any favors. If you’re prone to late payments or have a large balance due on your cards, cut them up!

Without proper self control on credit card spending and payments, you are basically throwing your money away. To ensure that you have better control over your spending, use only cash or debit for all future purchases (and don’t forget to pay at least your minimum payment on your cut-up cards each month!).

4. Increase Savings

There is no doubt that for a comfortable retirement you must accumulate satisfactory savings throughout your working life.

It’s good practice to save up to 15% of your income.

Start with your workplace 401(k), if you have one. If not, a Roth IRA (if you are eligible) or a traditional IRA (if you are not eligible for the Roth) are the next logical steps.

Increase in longevity means you might be able to look forward to 25 to 30 years in retirement, or possibly even significantly more. Investing now in good retirement plans will ensure that you have a guaranteed a stable monthly income when the time comes to stop working. [1]

5. Invest Wisely

Consider investing in funds.

Specifically, you will gain higher returns if you invest in different types of mutual funds such as Debt funds, Equity funds and Hybrid funds with a proper balance, although it absolutely relies on your personal preferences and sense of risk taking.

To get the most of these benefits, make sure you are investing in a variety of assets. Another resource of investing in mutual funds is SIP (Systematic Investment Plan) where you invest some money every month in funds. SIP works by averaging the per unit price of the stock.

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Mutual fund investors are aware of the benefits of an SIP (Systematic Investment Plan). For one, it is the most secure way to invest in equity mutual plans so that wealth is created over a long period of time. This plan also helps you to gain a better sense of financial discipline, which will come in handy in all your financial endeavors.

6. Invest in Gold

There isn’t really a better way to invest in gold than to have the physical gold itself in your possession.

You can purchase gold coins and bars from mints as well as from coin dealers and other private sellers.

Another way to invest in gold is through ETFs (Exchange Traded Funds).

These are is similar to mutual funds but they are exclusively investments of gold. ETFs are great because they offer more liquidity; the ETF owns the actual physical gold, stores it, and retains the value of the shares. These shares can then be bought and sold in the stock market, and one big benefit is that the transaction costs of gold ETFs are much lower than the that of physical gold.

With its consistently-increasing demand, investment in gold can be very wise long-term investment to make.

7. Stash Emergency Funds

Whether it’s a cash gift or a work bonus, always try to save any extra money that comes your way rather than making unneeded purchases.

If you get paid every other week, you’ll get an “extra” paycheck (three rather than the usual two) twice a year. Either save those paychecks towards your emergency funds or utilize the money to pay down other obligations, such as loans, credit cards or other debts.

Make it hard to get your cash.

Put your savings in an alternate bank, maybe an online bank that forces you to delay for several business days before transferred money hits your regular bank account.

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8. Find Fabulous Mentors

Find a mentor, such as a friend or family member, who has exceptional control over their finances and pay attention to everything they do.

If you do not have any friends or family that are enjoying financial freedom, then find a mentor online! There are numerous blogs and guru websites featuring the advice of many people who have reached financial freedom, and they exist primarily to let you in on how to achieve it for yourself.

There are also plentiful forums available that share tips and tricks on how to best achieve financial freedom. Read as much as you can and start changing your habits for the better.

9. Be Extra Patient

Patience is the key of financial success.

Being patient can be quite tough, especially when you’re struggling with your finances, but having faith is worth it. You’ll continuously be on the right track if you are taking the proper steps above.

So don’t be discouraged, even if you are only saving a few dollars a month; it all adds up. Within just a few years you’ll look back proudly at your accomplishments and be glad that you had the patience to get there.

Financial Freedom for All

Anyone can achieve financial freedom, regardless of their financial circumstance.

Use the tips provided above to get yourself on the track to financial freedom and toss your monetary concerns out the window. If you wish to achieve a life with financial freedom for yourself and your family then you must adopt a disciplined approach towards your finances.

Following the simple secrets above is a great start to making your money work for you, so you can work less and live more!

Featured photo credit: rawpixel via unsplash.com

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Reference

[1] Hartford Gold Group: IRA Retirement Accounts

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