Your 30s and 40s can really sneak up on you in terms of your finances. One day you're binge watching Netflix and eating Ramen noodles as a 20-year-old and the next day everyone is asking you why you haven't gotten around to opening up a 401(k) yet. Thankfully, saving money doesn't necessarily have to be a difficult or perplexing enigma you have to solve immediately. There are ways that you can start today — regardless of how much money you make or how much debt you have.
Do a Little Homework
While you may be many years removed from school, it doesn't hurt to do a little homework on your finances. This is a good (if sometimes difficult) time to consider checking your credit score and making plans for what it is you want out of life. Whether it's to buy a home in five years or pare down your student debt to 15 percent, it helps to have solid, definable goals. If you choose to go this route, design your goals to be ambitious without abandoning reality completely. It can be helpful to take a break for a few days before coming back to the table to decide how you're actually going to go about managing your money to achieve your goals.
Don't Forget Your Retirement
Your 30s and 40s may still seem a world away from retirement, but ignoring the impending event will only make things worse once you turn 50. Financial experts recommend that you put your pay increases into a retirement account rather than allowing them to become absorbed into your regular income. Once you have the extra money in hand, you're likely to become dependent on it in a relatively short amount of time. We can help consult you about the different types of retirement accounts and one that's right for you.
Be careful who your teachers are and question everything
There will be lots of people, especially family and friends, wanting to give you massive amounts of financial advice as you turn 30. Remember that when it comes to money, everyone has an opinion. Most people are enthusiastically ignorant. You must take every piece of information with a grain of salt. People who may seem to be doing well financially may really be broke and living off debt. Seek not just knowledge, but understanding. Question everything and be careful not to live a different variation of somebody else’s life.
One of the biggest things you can potentially do when you manage your money is to start stashing money away for emergencies. In addition to preparing for retirement, it's a way to cut down on the impact a catastrophe will have on you and your family. From car breakdowns to stock plunges, you never know when you're going to have to handle unexpected financial demands. If you happen to own any kind of company stock, your 30s and 40s is the best time to start monitoring its progress. You're likely already established in your company at this point, meaning it will help to have a solid idea of its performance before deciding when to sell.
Make a List
If finances still feel foreign to you at this age, start making a list of what you spend and what you save. You don't have to be a numbers whiz to start identifying what you can cut down on and which accounts you could be focusing on. If you're feeling overwhelmed by the amount of debt you have, it may be helpful to consolidate it all into one payment. That payment may even have a lower average rate than that which you're currently paying. This step can also make your list a lot shorter and easier to manage. Once you have a base idea of where each penny is going, you can start making changes to manage it all a little better.
Financial smarts aren't something that you learn once and then implement immediately. It's a lifelong skill that you'll likely still be trying to master in your 80s and 90s. Starting sooner rather than later can really make it easier on your future self.