financial goals to hit before 30

9 Financial Goals To Hit Before 30

financial goals to hit

Setting goals is  the best way to ensure a successful life. 

We set goals for everything from everything from grade-point averages to relationships.

In high school, they don’t stress that importance of setting financial goals, which is why so many people have no idea what’s going on when it comes to personal finance.

Full disclosure some of you will discover this list after 30...Don’t panic, it’s never too late to start achieving financial goals.

Here is a list of financial goals to hit before 30

1. Get a job or consistent side hustle – There’s no short cut here. The only way to achieve your financial goals is by having a source of income. 

I honestly believe that when you start out young, it doesn’t matter what kind of job you have. With a clear financial plan it’s possible to achieve your financial goals. This is much easier to do when your young but anyone can do it. Don’t let the inability to find a job stop you, here are 26 side hustles that you can start today.

2. Learn financial discipline – This is a difficult task for some people. Growing up we didn’t have a lot of money so it wasn’t hard for me to live frugal. This is one of those things that can be hard depending on what your used to. Make a list of your expenses go over them and see what you can weed out to save you money where you can. It can suck to get store brand potato chips, but over the course of a year savings can really add up. I have friends that always need all the newest clothes, the newest shoes, designer everything. Don’t get me wrong I like fancy shit too, but as an outsider looking in I see it’s causing slow financial death for them.

To clarify, there is nothing wrong with having nice things, I like them too, but there is a time when you can afford it.

Instead of buying the newest pair of $200 designer jeans every month, consider spending half the amount and putting the remainder into a savings amount.

You will have accumulated enough to start making investments sooner than later.

It’s a cruel irony that most of the crap that you want to blow money on when you’re young matters less when you’re older.

3. Pay off debts – I know people that went to high school with me that’s are constantly dodging Sally Mae. Pay off your student loans. Don’t be the person who’s still dodging creditor calls in their mid-30s. Be proactive in your 20s so that you aren’t paying off student debt into your thirties. Pay more than the minimum monthly payment and look into consolidating and refinancing to better terms. But only consolidate if you don’t need income-based repayment or if you are working towards forgiveness. Know what delinquencies are on your credit report. Dispute negative remarks first and see what you can get to fall off, then pay off the rest!

4. Pay off credit cardsPay off your credit cards, and stop maxing them out.  Your credit to debt ratio is a high impact factor on your credit score so it’s a good practice to keep this ratio under 30%.

5. Buy an affordable house – This is one is crucial. I don’t know what about human nature causes this, but when people start making decent money, they feel compelled to go out and get the most expensive house they can afford. It actually makes me cringe when people do this. Unfortunately when people budget for their homes, they don’t factor investment savings into the mix. If possible, duplexes make great first investments.

6. Pay off your first house – Because you have exercised financial responsibility and you lived frugally, bought an affordable house that allowed you to save weekly, you have probably built up a nice little savings. Once you have enough pay off your house. The average person will be paying off their first house for 30 years.

Paying off your house is the first small but powerful step to financial freedom.

Your living arrangements are usually your biggest expense, and aside from your insurance and taxes you have completely relinquished that burden from your financial responsibilities.

Paying off your home unlocks approximately another 30% of your income that you have access to, but before you get to too excited and head off to the Louis Vuitton store, Consider that extra cash as part of your new savings for our next financial goal.

7. Purchase rental property – You’ve paid off your first home, you have extra savings rolling in now what? Now it’s time to start making some additional income. Your not worried about trying to figure out which activities you will have to eliminate to cram in a second job because you’re ready to start building passive income with rental properties.

If your saving is good sometimes you can find a home that you can pay cash for. If not most investment loans only require a 20% down payment. A good way to quickly calculate the down payment cost is to expect approximately 20k toward the down payment for every 100k. 

Since your first home is paid off and you don’t have to worry about rent payments, you will find it gets easier and easier to save up for down payments.

Duplexes make great first investments.

8. Actively raise credit score – After you have repaired your credit. It’s time to start actively making it better. Use your credit cards frequently but rather than using it as a clutch, think of using your credit card as a credit-boosting tool. 

By creating a credit card spending plan, and making sure you never exceed a 30% debt to credit ratio, your credit will begin to steadily rise.

Also be responsible and don’t get subscriptions from to services you can’t afford, and when you do make sure that you are paying on or before your due date.

9. Know your credit score – Get an account at Credit Karma. The best thing about Credit Karma is that it constantly keeps up with your credit score without adding harmful inquiries to your credit report. Download the app. Get into the habit of checking your credit score at least once a month.

Don’t be the type of person that never knows what’s going on with their credit. 

Hint::
When someone runs your credit you shouldn’t be as surprised with your results. And try to avoid 

 

These goals are not easy to hit but if you focus, and you can hit most of these goals by the time you turn 30, you will be on the fast track towards an early retirement.

How many of these goals have you hit? Let me know in the comments section below and don’t forget to subscribe 🙂

pay off student loan debt

Student Loan Debt

Unless you come from a rich family, student loan debt is all too familiar to those with those looking to further their education. Todays guest post comes from Michael L. owner of the person finance blog, Super Millenial. If this article helps you, or you want to hear more from Michael, take a moment to visit his website. Without further ado….take it away Michael…

Student loan debt is a necessary evil and a reality many young people will face to continue their education. According to the Wall St. Journal “ About 7 in 10 seniors set to graduate this spring borrowed for their educations. Along with their diplomas, they’ll carry an average $37,172 of student debt as they enter the workforce.” Before we go into let’s take a look at three easy ways to approaching paying down student debt:

  1. Live Like A Student: You’ve been doing it for past 4-5 years, keep doing it as a way to keep costs down to pay more towards your student loans

  2. Set Up A Plan: Know how much you can afford, when your expected pay off date is and how you can pay it off sooner. As you reach certain dates and reach goals make sure to celebrate to stay motivated!

  3. Refinance: If you’re committed to paying down student loans early look at ways to consolidate your loans to the lowest payment possible. This will ensure you’re paying more towards the loan and less wasted on interest.

So should you pay off student loans or look to start investing in your retirement funds? A good place to start is the Federal Student Aid by comparing your student loan interest rate vs. your expected portfolio returns. Student loan debt has ranged from 3.86% (direct, subsidized loans) to 6.41% (Direct Plus loans). Historically the stock market has been ~8% but there will be bad times in the economy, drops in the stock market, and potentially another bubble or recession.


Student Loan Debt Interest >=< Expected Investment Return?

In the end it is a very personal decision as some may not be able to sleep at night knowing they have a debt looming over them. Here are the benefits of both investing by building assets & paying off student debts:

Investing (Building Assets)

Emergency Fund: Do you have enough money in savings to pay for basic expenses for three to six months? If not then start saving & automating 1o% of each paycheck towards your emergency fund until you reach your goal.

401K: Are you currently contributing to your employer’s 401K? If they match a percentage or amount, invest at least up to that amount to take advantage of free money from your employer. If you invest $3,000 and they match, you just doubled your investment instantly. This habit will ensure you automatically pay yourself first and contribute towards your future.

Pay Down Credit Card Debt: With high interest rates these will do more damage to your credit and your potential for lending than student loan debts.

Roth IRA: By opening a Roth you can increase your savings and also still have liquidity if needed as there is withdrawal flexibility if you need to use those savings in the future (unlike a 401K). Generally, early withdrawals from an IRA prior to age 59½ are subject to income taxes, plus you’ll pay a 10% tax penalty. However, you may be able to withdraw your contributions (before any earnings) tax-free and without penalty.

Taxes: Depending on your income you may be able to deduct up to $2,500 of your student loan interest costs. If you pay your loan off early you may reduce your tax savings.

Paying Down Debt

Now that we’ve covered the benefits of building assets it’s important to also evaluate the benefits of paying off student loans:

Predictability: While the market has historically been 8% returns the future may yield different results. Your student loan payment is fixed for the life of the loan and will give you consistency in your budget planning.

Credit: Paying down your loan make a big impact on your credit score as you are lowering your overall debt which can increase your credit score. The higher your credit score the more likely you’ll be able to get a lower rate on buying a car or house

Stress: Debt is a burden to many, some people can’t barely sleep at night knowing they owe money. Once your lower your debt or completely eliminate it you’ll be able to enjoy peace of mind and really begin to start increasing your net worth.

Dealing with debt is like meal prepping for a full week; it’s necessary but not always the most fun (until you see the results). I’ve mentioned before it’s important to find a balance in your life and finances, same goes for investing and paying down debts. Start by eliminating credit card debt then accelerate your student loan debt while investing in your emergency fund, 401K, and Roth IRA. The most important part is identifying your debts and setting up a game plan for each paycheck.

Have you had success paying down either type of debt & investing at the same time? What strategy worked best for you?

Michael L. is the creator of Super Millennial. He teaches people how to evaluate their financial situation, simplify money management & learn how to automate your investments to reach their financial goals. Subscribe for his personal finance “Keys To Success” PDF and blog updates HERE.

DIY Credit Repair

When I was 17, for some strange reason I was approved by a local apartment complex to rent a 1 bedroom apartment. My first shot at adulthood, I was moving in with my girlfriend. I had an unreliable job, no financial education, and was still figuring life out.  In hindsight that was a train wreck waiting to happen, but it was learning experience. After a few months I was laid off from my job, lost the apartment, and had utility bills that had no chance of getting paid. Unfortunately while we are young, is when we do the most damage to our credit, as we incur bills and student loans that can effect our credit.  As maturity sets in, and we realize how useful credit can be, and thus we embark on the journey to credit repair.

Why do we need good credit?

Credit is your financial responsibility track record, its how companies determine whether your business is a liability to them. People with better credit get better opportunities, better rates, and more financial options.  Your credit determines how much your insurance premium is, if you can rent that nice apartment that you’ve had your eye on, the car you can afford, and if you ever have plans to buy your own home, or start investing you will need to get your credit in decent shape. Your credit is even the determining factor. People with bad credit are looked at as risky and unreliable. Fortunately we can redeem ourselves, here are some DIY credit repair tips!



DIY CREDIT REPAIR TIPS

  1. Know Your Credit Score – Because how would you know what needs fixing without taking a look under the hood right. Fortunately, obtaining your credit score these days is easy as its ever been. Head over to CreditKarma.com sign up and get direct access to your credit info. Credit Karma is great because its FREE. After you sign up download the app, to your cell phone. You CARE about your credit now, lets keep it close
  2. Fix Errors – Now that we have access to our report, checking the collections for errors is important. Sometimes creditors make mistakes at your expense, and its up to you to find out. These need to be disputed right away. You can dispute errors directly though credit karma.
  3. Dispute Everything – Disputing derogatory credit remarks on your report is easy and doesn’t cost any money so, it makes since to try them all and see what sticks. When you dispute derrogatory credit marks, the creditor has to prove that you owe them money within 30 days. When your late payment goes in to collections, if you haven’t paid in a while, the original creditor sells your debt to a debt collection company. This company tries then tries to collect the debt from you, if you don’t pay them, eventually they liquidate your account to another debt collector, and the process repeats. Alot of times after a few debt transfers, it makes it difficult for the new creditors to get the necessary info to respond to your dispute. The result is one less negative mark on your credit report.
  4. Don’t Pay Old Debts – Debt falls of your credit report after 7 years, anything over 5 year or older you may just want to wait out. There’s no sense in spending money that could be applied to more recent debt. Anything less than 5 years, you should consider paying off. Depending on the amount owed, set aside a reasonable amount to pay off your debts on a consistent basis. Here is a debt repayment calculator!
  5. Pay Bills On Time – Your not the same irresponsible 19 year old with your first visa any more, time to pay your bills when or before the due date. Part of your credit report is how well you are able to pay your debts on time. Each month credit bureaus document weather you paid on time or not. By making sure that you stay on top of this you will notice a rise in your credit. If you have a problem with time management, set alerts on your phone.
  6. Get A Secured Credit Card – Secured credit cards are like regular credit cards with a major exception. You will need to put a deposit down, usually a minimum of $200, which represents your credit limit. Technically is more like a debit card, but should be treated as a regular credit card. This card SHOULD NOT be used for anything other than a credit boosting tool, not because you need an outfit to wear to the club. I recommend paying for something low like a cell phone bill, or something that you need to pay for consistently  with your secured card. Don’t exceed 30% of your credit limit, and pay this balance of every month, and your score will definitely rise.
  7. Never Exceed 30% Credit Utilization – This is one of the high ranking credit factors, and a very important part of DIY credit repair. Creditors don’t like when you max out your credit cars. A good rule of thumb is not to exceed 30%. This is the perfect range to be in. It shows creditors, that you are responsible, and that you are conscious of your spending.
  8. Maintain Credit Activity – Another high ranking factor in credit repair, is the length of your credit history. You want to keep cards open as long as possible. A halt in utilization for extended periods of time can get your card closed. Always charge at least one thing to each card every month, and pay off the balances when possible.
  9. Negotiate – When you get ready to start paying off recent debt, reach out to the debt collection companies and negotiate a deal. The older your debt gets, the more flexibility you have. Let creditors know that you want to pay off your debt and offer them 30% of the debt. Sometimes they will say yes, if not almost all the time they will give you a counter offer. Try to get the lowest amount possible. When your offer is accepted, make sure to confirm that they will be removing the marks from your credit report as this is not automatic. Get all of this in writing, and store it in a safe place.
  10. Avoid Excessive Credit Checks – STOP LETTING PEOPLE RUN YOUR CREDIT!!!! Salesmen, will often downplay the effects of inquiries but the truth is they don’t care. You need to be firm with people who wish to run your credit. Excessive inquires look bad on your credit report and reduce your score. Only allow credit checks with absolutely necessary.




Things Credit Repair Will Help You Achieve

  • Able to qualify for a mortgage. Unless you are exceptionally financially well off, you are going to want to finance your home. People with good credit have no problems getting qualified for mortgages.
  • Able to finance rental properties. Thinking about investing to earn yourself some passive income?. Good credit will help you to get loans on these properties.
  • Get approved for credit cards. No surprise that credit card companies are going to do a credit check before they trust you with any credit.
  • Lease an apartment. As a landlord I can tell your credit is a major clue about your financial habits. Most landlords like to see that you can be trusted to pay your debts on time.
  • Able to finance a car. You gotta get around right? An obviously something reliable. If you want to rent a car and your credit is bad, the salesmen will politely ask you to come back when your a little more fiscally responsible.
  • Get you lower interest rates. Ever seen one of those car commercials, where they give a low monthly price and then at the bottom of the screen you see the fine print? That fine print says that those super low prices you just saw only apply to those with preferred credit. Lower interest rates means you save more money then those with bad credit.
  • Give you higher limits. When applying for credit cards, your limits are determined by your credit score. Higher credit results in higher limits. When credit card companies issue credit cars, they know if your responsible with money when they see your credit score.

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