In your 20s, you learn. In your 30s, you build on what you’ve learned. In your 40s, you (hopefully) enjoy the fruits of the previous two decades. This applies equally to matters of the heart as well as the purse. The question is: just how much have you learned when it comes to managing your finances to put you on track for that next decade?
If you are about to hit the all-important three zero, check out our list of must-know money matters that every independent woman should live by.
1. Create a workable budget
Whether you create your budget using the latest app or the old fashioned way with pencil and pad, the operative word here is “workable.” That means that you make a budget and you stick to it. This involves knowing what funds you have coming in and having an air-tight plan of where and how they will be going out. You may feel like a slave to your budget in your early 20s, but by 30 you should know how to make that budget work for YOU.
2. Remember: temporary sacrifice, long term gain
Much like sticking to a diet that pays off when it’s time to flaunt your look at your high school reunion, by 30 you should understand that by forgoing that irresistible pair of stilettos, you will be standing taller financially down the road. Not sure whether you really need to make a certain purchase? Apply this old saying: “when in doubt, go without.”
3. Have a money review before you say “I do”
Love and marriage—they go together like a horse and carriage. But make sure you do a money review before you say “I do.” With the average age of marriage being 28 for American women, make sure you set financial boundaries with your significant other. This is more than just having a pre-nup. When things get serious and you decide to live together, make sure both parties are fairly sharing any outgoings and enjoying the benefits of incoming funds. If you don’t trust your rose-colored glasses, ask your financial advisor. He/she can give you a more neutral viewpoint.
4. Calculate your net worth
At 30 you should be clear on what your net worth is. This isn’t just based on your cash, investments and assets. Take your total assets: what’s in your savings, investments, real estate, etc. Then you subtract your liabilities: loans, mortgage, etc. Calculating these things will give you a reality check as to where you stand financially.
5. Evaluate needs verses wants
A woman approaching 30 knows what she needs, but what’s not so easy to do is to separate her wants from her needs. Evaluating needs means establishing that all bases are covered before indulging in some well-deserved wants. Needs means shelter, food and utilities are paid.
6. Plan for emergencies by having an emergency liquid savings
You don’t want to sell off your shoe or jewelry collection to pay an urgent, unexpected bill, right? You need to be able to have $1,000 at a minimum in liquid savings set aside for emergencies. The fact of the matter is that emergencies WILL come. Why not be better prepared for them so they don’t become unnecessary mountains of debt?
7. Find the right life insurance policy
Our family situation tends to change as we hit the age of 30. It’s important to know that when it comes to Life insurance, it is not one size fits all. Does your life insurance suit your income? Does it suit the number of dependants you would leave behind should the unspeakable occur? Is term or whole life insurance better for my family? Honestly, you can’t afford NOT to have insurance.
8. Open the right checking account
This is the financial science of being a woman of 30 — balancing a checkbook! While a checking account can help with keeping track on your money and expenditures, opening the right checking account should be done wisely.
9. Pay bills online and save time and money
Making use of technology when it comes to paying bills really can put you in the driver’s seat of bill management. Most banks offer the ability to pay your bills online for little to no cost. Phone apps and online services are making it easier to be responsible and cost effective.
10. Open an interest bearing savings account or money market
As a kid, having a piggy bank was exciting. It was cool to feel it get heavier and heavier as you put your coins in the slot. But consider having a piggy bank that only grew if you added to it. Your savings account is no different (unless it is an interest bearing savings account). Make sure you shop around for the best interest rate. Just make sure you check for any fees!