5 Personal finance milestones you should reach by 30
Do you have any financial or career goals set in place? Where do you stand as long as your financial goals are concerned? Are you on track? What is your standing if compared to other adults of your age? Check out the following five financial milestones that every young adult should reach by 30.
1) Become debt free: Even if it’s just for once, try to do it. Every adult should try to become debt free at at least for once. It’s a very important financial milestone to achieve. While I was 25, I was going through a bad financial patch. I had accumulated $14,000 in consumer debts. However, I chalked out a repayment plan on my own and paid it off in 14 months. Getting rid of all your bad financial obligations gives you the insight as how difficult it is to undo any bad financial decision.
2) Develop an emergency fund: We all know how important it is to have an emergency fund of a good figure. However, saving up a good cash reserve and maintaining it as an emergency fund is not a boy’s play. Once you save it up, it’ll get drained for any of the reasons you had saved it for. Now you’re faced with another challenge of putting the money back in the account.
3) Work towards saving for retirement: It’s doesn’t matter how small your contributions are. The thing that matters is when you start saving for your retirement. Time is everything; and the precious moments of life that once pass by, never come back. So the sooner your start saving for the future, the better return you get on retirement. Interestingly, you can keep as little as $20 each month in a Roth IRA or other investment accounts. The point is opening a retirement account and putting away anything on regular basis.
4) Build a side income: Now with the changed economy and workforce, many young adults are looking for additional streams of income and even learning new skills for survival. If you have multiple streams of income, losing a job or cut back in income won’t harm you or your family. Do you have any hobby that could help you earn some quick bucks? If yes, go for that.
5) Know your net worth: The definition of net worth is the combination of total assets minus any debt you might be having. The figure you get is your net value in total, which could both be positive or negative depending on your debt figures. Keep a check on your net worth every quarter to know your overall financial standing.