How To Achieve Financial Goals Before Your 30s With 7 Best Steps
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Approaching the 30s is like climbing a tall mountain. After years of work, study, and experience, you’re nearing what most people would call the prime of your life. As you approach this crucial stage in your story, you might be wondering if you’re financially ready. If you want to have a happy and fulfilling life, now is the time to learn how to achieve financial goals. To help you get started, here is how to achieve financial goals with seven important plans before hitting your 30s!
Financial Goal 1: Become financially independent
What this means:
Being financially independent is an essential part of living your life. It means that you become capable of paying for your own needs and living expenses. You’re far past the point of relying on your parents or on loved ones to spend on your needs. Whether you have a stable job or a steady routine, you can’t keep living off of others. How else can you learn how to achieve financial goals if you can’t afford it, right?
Why it’s important:
Everything that will come up on the list will depend on your ability to finance your own life. By reaching your 30s, you will enter the age where many important and meaningful goals need a strong foundation. Simply put, the only way to know how to achieve financial goals is to plan accordingly. With a solid fund and a disciplined approach to money matters, you can turn your dreams into reality!
How to do it:
While there are many ways to get financially independent, they all start with a proper money plan. The best way to know how to achieve financial goals is to set out SMART goals. SMART stands for Specific, Measured, Attainable, Realistic, and Time-based goals. In other words, you have to know what to achieve and what timeframe is needed.
For example, anyone can dream of being a millionaire. However, it’s different when you set a goal to save one million dollars by the end of the year. This can help you control the pace and set the parameters. Remember that to learn how to achieve financial goals, you must know the pathway to get there.
Financial Goal 2: Build and maintain an emergency fund.
What this means:
Emergency funds have been frequently mentioned in this blog, mainly because there’s never a bad reason to have one. When you want to master how to achieve financial goals, you should always have a safety measure. Emergency funds are exactly that! It’s a budget that you set aside for any unplanned expenses. To be safe, experts recommend saving about three to six months’ worth of living expenses.
Why it’s important:
Since 2014, an annual survey from Bankrate polls over 1000 Americans about their emergency savings. According to the 2022 report, the percentage of those without emergency savings increased, bringing that total to 34%. What’s worse is that the same report showed that 1 in 3 Americans has a higher credit card debt than emergency savings. So, how can you learn how to achieve financial goals when you don’t have a backup?
The importance of an emergency budget is to always prepare for the unexpected. Even with our best efforts, there’s no telling what tomorrow brings. If you want to learn how to achieve financial goals, you should always have a plan and a safety measure in place. That way, you can cover any unexpected changes without destroying your savings.
How to do it:
If you want to start an emergency fund, you should examine your living expenses first and see how much you spend every month. Knowing how much you use up regularly can help you set a benchmark for the amount needed. With a calculated plan, you can learn how to achieve financial goals with your existing income and expenses.
The next step is to keep a separate account for your emergency savings. This should not be touched until you face an emergency. Lastly, you should start depositing cash into your emergency fund to build it up over time. While the recommended amount is 20% of your income, you can start with a smaller amount first. That way, you can understand how to achieve financial goals while slowly building a safety net for all scenarios.
Financial Goal 3: Learn to automate your finances effectively.
What this means:
Modern technology has made financing easier than ever. From banking apps to digital investment platforms, the possibilities are endless. Learning how to achieve financial goals is much easier than when the world relied on paper and ink. And nothing is more simple or effective in learning how to achieve financial goals than automated financing.
Through apps and the Internet, banks nowadays allow you to automatically send your hard-earned cash directly to your savings account. It’s a useful trick to show you how to achieve financial goals. You can also use automated financing to renew your subscriptions or pay utility bills with one tap and one click!
Why it’s important:
Automating finances allows you to learn how to achieve financial goals in two different ways. Firstly, you can use high-end technology to make all transactions fast and easy. Secondly, it allows you to avoid overspending. After all, you can’t spend $200 if it’s already directed from your paycheck to the bank account. Easy and effective, automated finances can streamline your plans in a jiffy!
How to do it:
Automated finances can make your life much easier, but that doesn’t you should rely on it completely. The key to understanding how to achieve financial goals is knowing the tools you have. So, the first step to automating your finances is to know which parts you want to automate. Whether it’s investment, saving, or billing, you can choose whatever style you want to get your plan in order.
Another effective to way manage automatic finances is to review and reassess your plan from time to time. Even though technology has made saving and spending easier, it doesn’t mean it’s foolproof. You can’t learn how to achieve financial goals if you lose track of your progress, even if it’s all online. Make sure to review your finances every so often, even if nothing seems wrong. It’s better to be cautious than to discover an expensive pothole later on.
Financial Goal 4: Clear out any debts in your financial plan.
What this means:
Contrary to popular belief, managing your finances in your 30s isn’t a bad thing. It’s possible to have fun and still manage your money concerns. That said, you need to do so without being overly concerned about the future. One way of learning how to achieve financial goals without fear is to remove your existing debts.
When you have debt, it can feel like a rain cloud that constantly hovers above you. Even when you gain a bonus or a pay raise, the feeling of debt can you make you worry. The key to understanding how to achieve financial goals is to do so with confidence, not fear. The best way to do so is to clear out any expenses you face, especially things like student loans or overdue payments!
Why it’s important:
Protecting your finances is a great way to know how to achieve financial goals. That’s why you should always tackle your debts ahead of time. Nothing keeps your finances safer than to get rid of any potential dangers. Debts are one such threat, as they always divert your potential funds to something else. Plus, removing debts allows you to build a better credit score. This can help you access better loans, mortgage plans, and other deals that banks offer.
How to do it:
One method of learning how to achieve financial goals is to prioritize your payments. There are certain debts that need your immediate attention, such as credit card debts and loan debts. If you want to master how to achieve financial goals, you must know which ones to focus on. Typically, you should always aim to pay the biggest debt first. That way, you can build momentum and erase all other debts quickly and efficiently.
Financial Goal 5: Develop an excellent credit score.
What this means:
One of the most popular and divisive items in the world is the credit card. With it, you can pay for almost anything you can imagine. Because of this, credit cards have become widely used by people of all ages, from baby boomers to Gen Zers. In fact, studies that show 28% of all payments in the country are done by credit card. That’s why it’s important to know how to achieve financial goals through this method.
However, the card itself is only part of the equation. Another important aspect of finance is the credit score. In simple terms, it’s a score that lets banks and financial institutions know your creditworthiness. By frequently using a card and paying your credit bills on time, you build your credit score, which can range from 350 to 850. By getting it up to 700 and above, your credit score can be a great asset in your financial plans. Think of it as a special report that card that shows the bank how dedicated you are to learning how to achieve financial goals!
Why it’s important:
A strong credit score doesn’t only indicate how timely you are in paying your bills. It also lets companies and financial institutions know you can be trusted to meet your payments. This can convince them to approve any application for a loan, as well as lower interest rates for your card and loans. You could also use it to access premium insurance plans and better rental options. In some cases, a good credit score could help you apply for a job, should the company require your FICO score. With a good score, you can learn how to achieve financial goals effectively.
How to do it:
As mentioned before, paying off your existing debts can help you build a good credit score. Doing so helps your pay history, while also giving you more funds to cover your credit bills. By removing your debts, you can quickly learn how to achieve financial goals through your credit score.
Another option is to keep your credit utilization rate low. This rate is the amount of money you owe against the credit limit of your card. For instance, if you used $2000 out of your $10000 credit limit, that means you only used 20% of your card. Keeping your credit rate low shows that you aren’t relying solely on your credit card to cover expenses. This also means you know how to manage your finances well. If you can prove your dedication to learning how to achieve financial goals, you can make your credit score rise up.
Financial Goal 6: Pay off student debts.
What this means:
This might seem like deja vu, but there’s a deeper meaning to this goal. While all debts are not ideal, student debt is one of the heaviest burdens in the country. Studies showed that as of mid-2019, adults under the age of 34 now owe a total of $620 billion. It’s why so many people, including members of the government, are nervous about paying off their debts. After all, it’s hard to learn how to achieve financial goals when you struggle with such an expensive anchor.
Why it’s important:
While all kinds of debt can be tough, student debt can be tricky to overcome. Unlike mortgages or car loans, education is not an asset that can be reclaimed if you fail to make payments. In other words, even if you were to face serious financial problems, you’re still expected to pay for your loans. That’s why you need to pay this off if you want to know how to achieve financial goals.
How to do it:
Earlier, you learned that paying off debts require prioritization. To truly discover how to achieve financial goals, you’ll need to pay off these priorities. In this case, student debt is one of the highest on the list. Focus on planning your finances and expenses ahead of time. See how much money you can divert to contribute to your student debt funds. If possible, strive to make extra payments or add more cash per payment. By doing so, you can remove your student debt faster and move on to better things.
Financial Goal 7: Have a retirement account ready.
What this means:
Like emergency funds, dedicated readers of this blog will have seen this piece of advice for the umpteenth time.That said, it’s never too early to plan for retirement. One aspect of learning how to achieve financial goals is to know the endgoal. Even if you haven’t hit your 30s, you can still envision what life after a long career would be. If you can do that, you can definitely make the necessary moves to turn that into a reality!
Why it’s important:
Sooner is better. That’s the simplest reason to start learning how to achieve financial goals, especially retirement. By starting now, especially before hitting your 30s, you can secure your future life without delay. The last thing you’d want is to continue working after 65, especially if it’s for something you could’ve done earlier!
How to do it:
The best way to get your retirement account underway is to research your options. Studying can always help you learn how to achieve financial goals. There are many types of accounts available, each one with its own strengths and weaknesses. For example, a traditional individual retirement account (IRA) offers tax-deductible contributions for your future plans. A Roth IRA, however, offers tax-free withdrawals for your retirement plans. The sooner you get this done, you’ll discover how to achieve financial goals effectively.
Takeaways
- Becoming financially independent means being capable of covering your own needs and expenses. You can learn how to achieve financial goals by setting SMART (Specific, Measured, Attainable, Realistic, Time-based) goals.
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Building an emergency fund is crucial for dealing with unexpected costs. It can tech you how to achieve financial goals while preparing for the worst case scenarios.
- Automating your finances can make transactions quicker and help avoid overspending; always remember to review your automated plan regularly.
- Clearing out your debts is a way to eliminate financial anxiety. Do all you can to pay off your largest debts first to free up your funds.
- Having an excellent credit score can open up financial opportunities. That’s why your credit score can help you learn how to achieve financial goals. Improve yours by paying off debts and keeping your credit utilization rate low.
- Paying off student debts, which can be a significant financial burden, should be a priority, and you can tackle this by allocating a certain amount of your funds towards repayment.
- Starting a retirement account as early as possible can secure your future, so look into your options like traditional IRAs or Roth IRAs.
- DeNicola, L. Accessed on April 25, 2023. What Is a Good Credit Score? Experian.
- Dulcio, B. (2023, February 22). How to Increase Your Credit Score. Debt.org.
- Gillespie, L. (2023). Bankrate’s 2023 annual emergency savings report. Bankrate.
- Horymski, C. (2023, February 24). What Is the Average Credit Score in the U.S.? Experian.
- Pokora, B. (2023, March 9). Credit Card Statistics And Trends 2023. Forbes Advisor.
- Segal, T. (2022, December 21). Education Loan: Definition, Types, Debt Strategies. Investopedia.
- Williams, T. (2021, June 21). 10 Ways Student Debt Can Derail Your Life. Investopedia.
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