In life, nothing is certain. The same truth applies to finances and even the best-laid financial plans often go awry. It is not enough to assume your finances will be in great shape by the time you want to get married, buy a house, or have kids: you will need to plan and prepare to get there. To ensure that you are financially stable by age 30, you should integrate some of these steps into your personal life:
Realize the Power of Hard Work
You will not become financially stable simply by getting a job. To make the most of your income, you have to have a plan. You will not achieve your financial goals just by showing up 8 to 5; think of your finances as a small part-time job that you run on the side. Treat your bank account like a business: give yourself a bottom line, a goal, and a timetable. Hard work and clear goals are the only things that will get you to financial stability.
If you have student loans, it is easy to feel overwhelmed at the thought of paying them off. One way to combat this is to set a clear timetable and payment plan for yourself. A general, “I will pay them off,” is not as effective as, “I will pay off $3,000 by April of next year.” When you set a clear timetable for yourself, you have a better sense of what needs to change in your lifestyle and what kind of salary you need to earn in order to reach that goal.
Focus on Short Term Goals
To achieve financial independence, you will need both short- and long-term goals, but before age 30 it is best to focus on the short-term. Fast-looming deadlines feel higher-stakes than a light-years away retirement fund, and your short-term goals can provide the incentive you need to work harder. If your love life is getting serious and you want to be able to afford custom engagement rings in Brisbane, you may need to work a small freelance job on the side. When you know your short-term goals, you are able to plan accordingly.
If you need to live small in order to achieve your financial goals, do not be afraid to do it. There is no shame in living small and you might even be happier. If you are ready to buy a home but need a loan, take note of the stamp duty in Queensland and talk to a community of home loan experts. Do not be afraid to find creative ways to stick to your budget as you plan your future.
Figure Out Your Finances
You might be skilled in a profession by now, but that does not mean you are skilled in finances. Just because you understand how a basic budget works, you are not necessarily able to navigate every detail of your financial situation. 401K plans might remain a mystery to you and mortgage payments make cause you to turn green. That is no reason to avoid them; quite the opposite. Take the time to learn how finances really work and equip yourself to understand your own situation.