Your financial goals might not be the first thing you want to think about on your 30th birthday, but once the champagne has been drunk and the cake eaten, it’s worth spending some time auditing your financial situation today for a more secure future.

It takes time and discipline to become money-smart. 

You might think that you’re still young and invincible when you turn 30 (which you are, don’t get us wrong!), but the truth is you’re almost halfway to retirement. 

And that’s if your retirement goal is to do so at 65. In fact, 43% of millennials in the US want to retire early, and in Europe, many are leaving employment before the legal retirement age already. 

That makes it crucial to employ a smart approach to money, working on ticking these 15 financial goals off your checklist. 

As American philosopher William James once said, “When you have to make a choice and don’t make it, that is, in itself, a choice”. 

Not wanting to take the plunge to tackle your finances is entirely understandable. The stakes seem so high, and it’s easy to convince yourself that making the wrong decision will be worse than making no decision at all. But in truth, putting off financial decisions for another day just puts a secure financial future one day further away. 

So if unravelling your financial past as well as planning your future feels overwhelming, don’t try to do it all in one go. Instead, treat this list like a year-long project, and tackle it point by point.

The next step is to figure out where you stand, officially called your net worth. This is simply the value of your assets (what you own) minus your liabilities (what you owe). It’s not only a useful place to start, but also a good way of tracking your progress over time. 

You can do that in a simple spreadsheet. 

List the value of the things you own (property, car or other significantly sized items), plus the money in all bank accounts and any investments. Then list your liabilities, including loans, store cards, credit cards, student loans, payments owed to parents etc. Subtract the liabilities from the assets to arrive at your net worth.

Alternatively, there are many apps that allow you to track your net worth across your bank accounts (e.g. MoneyWiz), so you might want to check them out as well. 

As you’re calculating, you might find that the total may be in minus figures, but fret not. That’s not uncommon if you’re young and have built up debt in the form of a student loan or are just beginning to pay off a mortgage. The important thing is to have a baseline from which to improve. 

Next on the list: becoming debt-free.

Here’s a tip on how to approach this wisely:

Find out the interest rate of each loan, and tackle the one with the highest interest rate first. Once that’s paid off, move on to the next highest interest rate loan, and so on.

One way to do this is with a 0% APR credit card. While using a credit card to pay off debt might sound counterintuitive, it’s worth doing if you find one that offers a (minimum of) 12 month interest-free loan. You can then supercharge how quickly you can pay off your debts.

Having some savings at 30 is ideal, but by no means common. A recent survey showed that 72% of millennials have less than $1,000 in savings — no emergency fund, no holiday fund and no saving for big purchases. 

No bueno.

You might have heard about the 50/30/20 rule: spend 50% of your income on essentials like rent and food, 30% on entertainment and discretionary spending, and save (or invest) the remaining 20%. 

The 50/30/20 budget rule to saving money

Based from "All Your Worth: The Ultimate Lifetime Money Plan" by Elizabeth Warren

However, you can also bend that rule slightly, to be able to pursue your personal financial goals. 

You can spend less on your needs, more on your savings, consider setting a chunk of money aside for investing, and never ever go above the lifestyle spending minimum you decided for yourself. 

The key is to keep your needs and wants relatively low — or lower them over time — to be able to increase the chunk of your savings.

A good rule of thumb is actually to never spend more than 30% of your income on housing. 

According to OECD (Organization for Economic Co-operation & Development), the median burden of rent payments for tenant households is highest in the Netherlands (30%), Norway (30%), and Finland (32%).

At a minimum, you should have a separate current account and savings account, so you don’t inadvertently dip into your savings when you’re buying a coffee. 

Ideally, you’ll have another account where you can save an emergency fund which should hold enough money to cover your expenses if you can’t work for 3-6 months.

Some banks now make this easy, by offering pots or spaces which you can create in seconds to hold money for a specific purpose, such as a holiday, random treats or a house deposit. They generally don’t earn interest, so while they’re not the place to make the most of significant savings, they’re great for removing the money out of temptation's way.

If you’ve been with your current phone, TV or internet provider for more than a year, you can almost certainly negotiate a better deal. Often all it takes is a phone call saying you’re looking to change providers to find that they are willing to significantly reduce your monthly bill. 

And while you’re on the phone, change your direct debit to come out of your account the day after you’re paid. That way all your bills will be paid at the beginning of the month and you’ll know whatever’s left is spending money. 

Any time you want to borrow money, whether it’s a loan, mortgage or car lease, the lender will check with a credit rating agency to see how likely you are to repay the money. You’ll be assigned a credit rating, based on your previous financial behaviour.

Good credit score should be your top financial goal

It’s easy to slip into a low credit rating by defaulting on credit card payments, applying and being refused for multiple loans, or simply not building up your rating where possible. 

Things that help: paying off a credit card in full every month, making sure that you’re registered to vote (this helps because it allows credit agencies to confirm your name and address), and having a good track record for keeping up to date with your mortgage payments. Increasingly, you can now also report your rent payments to credit rating agencies, to help you build your rating even if you’re not a homeowner. 

Over the course of your lifetime, you’ll have various financial goals. In the short-term, that might mean a holiday or new car, while in the long-term it could be a deposit for a larger house, children’s education and, almost certainly, retirement. 

Each of these goals should be treated separately.

Short-term goals should be saved for in cash. That means simply putting money away in a bank account. You won’t earn much in interest, but your money will be easily accessible and guaranteed as safe up to €100,000

With financial goals set more than five years in the future, you can consider investing to grow your money. And the longer the timeline, the more risk you can afford to take in those investments, because you’ll have more time to recover from any financial downturn. 

An ideal financial portfolio (kind of like your overall financial wallet) will see your money spread over several different types of investments, each serving a different financial goal. 

Mastering the art of investing is one of the key financial goals by 30

The rule of thumb is that you’ll need between half and two thirds of your working final salary to maintain your lifestyle once you retire. The assumption is that you won’t be paying a mortgage or rent, paying for children or commuting once you hit 65.

The good news is that 30 is not too old to start a pension. If you begin today, you’ll have 35 years or more to build up a retirement nest egg through careful investment. 

The important thing is to start as soon as possible. Thanks to compound interest, which is simply the interest you’ll earn on the interest you’ve already earned, the earlier you save, the more time you’ll have to collect that interest. 

A Which survey found that, in the UK, couples who started saving early and had £100,000 in their pot by their 40s only needed to save £170 a month to have a comfortable retirement (judged to be a final total of £215,000). In contrast, those who only started saving in their 40s needed to save £489 a month. 

The chart below shows the benefit of saving in your mid-20s, versus starting at 35, or saving double the amount in your 40s:

The power of compound interest. If you start saving in your 20s, your net worth will be more than double vs. your 30s.

Source: Million Dollar Tips

When you choose your pension, it’s important to make sure you’re maximising your savings for where you live. In many countries, employers have to match a proportion of the money you save, or governments provide tax relief (which simply means you’ll owe less tax) on your pension savings. 

Investing in stocks, bonds and funds can be the difference between a steady but slow growth, and a sharp upward rise in your net worth. 

Start by familiarising yourself with key terms and concepts. Find out about the difference between stocks, bonds, mutual funds and ETFs, then learn how to get started with investing. 

Different types of investment come with different levels of risk. The higher the risk, the higher the reward. Armed with investment knowledge, you’ll be able to tackle each of your financial goals, identifying which are suitable for investment and what that type of investment should be.

Investment risk and return

Life insurance is the ultimate in responsible adulting, and it’s probably cheaper than you think. It provides a lump sum payment if something happens to you, which means any dependents will be taken care of. 

Also if you’re freelance or don’t get sick pay from your employer, consider income protection insurance. This will ensure you have money coming in if you get sick for anything over a month. 

It’s good for the planet and good for your finances to make sure the purchases you make are things that will really bring you joy. 

A good rule of thumb is to wait 10 days before buying anything over €100, but of course, small purchases add up, too. So if that daily latte sets you up for the day, go ahead and buy it. But if you’ve stopped enjoying it and just drink it on autopilot, cut down or even cut it out. It could mean an extra €1,000 a year to put towards something more exciting. 

When it comes to your finances, diversity is always a good idea. It means that if one income source gets adversely hit, it won’t affect your whole financial wellbeing. 

In investment terms, diversifying means ensuring that you’ve got different types of investments in your portfolio (bank savings, stocks, bonds, property). In income terms, that means finding different revenue streams to contribute to your total income. 

This is easier to do if you’re self-employed, but even those employed in a full-time job can achieve income diversity. It could be through the dividends you earn on your investments, rent you collect on a second property you own, or the increasingly popular side-hustle. 

Selling something you make or a service you provide on the side of your regular job can be hard work, but is super-rewarding. Plus, there’s the peace of mind knowing that you don’t have all your financial eggs in one basket. 

Get into the habit of regularly checking on your financial progress, including your debts, savings, investments, pensions and credit score. 

Make a note in your calendar when loans are due to be paid off, and have a plan for what you’re going to do with the money that frees up. Set regular reminders to give your finances the once-over on a monthly basis, and work out your net worth and make any adjustments necessary once a year. 

You can do this manually in a spreadsheet, or use a dedicated tool such as You Need a Budget. This makes it easy to track your incomings and outgoings, and has a dedicated net worth chart you can inspect at any point. 

If all this feels like a lot, enlist the help of a professional. Financial planners don’t have to cost a lot (although they often make money from the services they recommend to you, so be aware of that). 

A good financial planner will be able to understand your financial needs over the course of your lifetime, and recommend the strategies and financial products to make the most of your income. They can also be a useful resource to check in with any time your circumstances change, for good or for bad. 

Conclusion

Pursuing your financial goals is a marathon, not a sprint. Remember: unless you win the lottery, you simply won’t go from the negative net worth to positive within days. 

Don’t forget to give yourself some pats on the back, too! As you progress, it’s important to acknowledge (and celebrate!) your wins along the way, whether it’s paying off a store card or starting a pension. 

Your 30’s are a great time to get more serious about your future, and a lot of freedom and potential is unlocked when you put in a bit of time to understand the basics of investing and financial planning. Take it one step at a time, and keep focused on a stress-free financial future.

Susi Weaser
Susi is a content specialist at Cooler Future, with a love of all things eco.

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