Millennials may still feel quite young, but in many ways we are adults. So it’s time for our money management to grow a little too.
In your twenties, setting up automatic transfers to high-yield savings accounts and starting your 401(k) are the biggest hurdles. But once you hit your thirties, you need to do more.
Enjoy a higher credit score. Good credit can qualify you for better loan terms, so put that to good use. On the one hand, “in terms of value for money, refinancing is a big thing that you should be doing,” said Priya Malani, founder and CEO of Stash Wealth, a financial advisory firm in Charlotte, North Carolina. “If you can move even a quarter of a percent on a really big mortgage, it’ll save you tens of thousands of dollars.”
You can also get a better credit card deal. Combine higher interest cards. And if you’ve had success with the same card you’ve had since you were 21, you should consider a card that earns cash or travel rewards instead. (But keep the old one and use it occasionally to keep it active.)
Diversify your investments. Consider contributing more to your retirement account. You should save 10-15% of your pre-tax income. Next, map out your medium-term goals for the next five to 15 years. Consider taxable brokerage accounts and 529s to help fund early retirement, save for your child’s education, or plan for another major expense. Money for short-term goals (within five years or less) should not be invested.
Plan your next career move. Are you in the right job? Once you are financially stable, you may begin to wonder if you are in the right field or the right job in your field. Also, are you able to earn the amount of money that allows you to live the lifestyle you want as you age?
Believe it or not, Shehara L. Wooten, certified financial planner and founder of Your Story Financial, a financial advisory firm in Dallas, says it’s also time to start thinking about retirement lifestyle and retirement. amount of money you need to save to make it happen. .
Your current career – and salary potential – are all built into the plan.
Protect yourself and your loved ones. What worked when you were 25 and single won’t work when you’re 35 with two kids and a mortgage.
On the one hand, Malani recommends a term life insurance plan if you own a home with someone else, have a co-signer for a loan, or someone depends on you for support.
Second, you should consult with an estate attorney and other professionals about making a will, appointing guardians for the children, medical power of attorney, and how much money you’ll need (and how to do it).
Besides life insurance, you may need to make changes to your retirement and other investment vehicles and may need accident or disability insurance.
Give to others. As your salary increases, it becomes easier to meet your needs and you still have money left over each month. Some of this money can be budgeted for important causes. Estate planning can also help you determine how you want to give money or valuable property to charity.
“I like people to write their story and go to the end of their life,” says Wooten. “What do you want it to look like? What do you want people to say about you? What do you want your legacy to entail?”