There is currently a retirement crisis in America!
This is because people are experiencing financial difficulties. The decisions that you make will have an impact on your future, so it is important to take time for yourself and plan ahead.
To be financially secure, there are certain financial decisions that you need to make before you’re 30. Here is a look at the most important ones.
1. Start an Emergency Fund
Save up for an emergency fund. If your car breaks down, or your dog gets sick, these are emergencies that you should be prepared to handle without burdening yourself with debt or relying on credit cards.
The general rule of thumb is saving enough in the bank so you can cover at least three months’ worth of living expenses.
This way, if you were to lose your job or be unable to work for some reason in the future, you would have a source of income that could cover your living expenses until you got back on your feet and found another job.
Starting an emergency fund can also help you avoid bankruptcy. Chapter 13 bankruptcy law can protect you achieve financial freedom. But it must be the last resort. Having extra cash on hand can help back you up in case of a medical or business emergency. While getting a loan is another option, you don’t want to end up in huge debt at the end of the day.
2. Get Life Insurance
When old age starts creeping up on us, we realize how important life insurance is. Life insurance ensures that your family will be cared for should the worst happen. It provides you with peace of mind knowing they are taken care of in case something were to happen to you.
You might think you’re too young to get life insurance. But the earlier you avail of a life insurance policy, the better because the premiums will be lower as compared to when you get one later in your 30s or 40s. Premiums are calculated by insurance companies based on a person’s age, medical status, and other risk factors that may affect a person’s health and safety. So, why pay a higher premium later if you can get life insurance at a lower price with the same benefits?
3. Start Saving for Retirement
It is never too early or too late to start saving up for retirement, even if you are just a few years away from turning 30.
The earlier that you can start investing in retirement portfolios, the more time you will have to grow your money.
Set up a retirement savings account. Talk to your employer about individual retirement account (IRA) benefits and options. Furthermore, consult a financial advisor to help you with retirement planning. Applying all these recommendations can help you retire gracefully without thinking about money once you reach retirement age. In that way, you can enjoy your retirement years worry-free.
4. Get a Credit Card
Before you’re 30, it is important that you get your first credit card so that you can build up good credit history. This will help you when you are ready to buy a home or get a car loan.
A good credit score will also allow you to qualify for lower interest rates on loans and better deals when shopping around.
5. Pay off Credit Card Debt
If there’s one financial decision you need to make before you’re 30, it is to pay off credit card debt. While good credit builds your credit score, bad credit can be detrimental.
Credit cards are a slippery slope and can cause you to get into serious financial trouble very quickly if you aren’t careful with them.
If there isn’t an emergency fund in place, we recommend paying off the balance on your credit card every month so that you don’t end up in a hole that is impossible to get out of.
Make Wise Financial Decisions
The financial decisions you make now will affect your future, and it is important to plan ahead. Take the time to carefully examine your finances so that you can get in a good place financially before you turn 30.
With a little determination and financial wisdom, it is possible. If you would like more financial advice, please visit the finance section of our website.