As I was clearing out my reader the other day I stumbled upon an interesting article on MSN titled “6 Financial Milestones before 30.” The article addresses 6 milestones you should either hit, or have a plan for by reaching the age of 30. They are:
The article was definitely a good read, most certainly worthy of your time. However I was somewhat surprised at the fact that two essentials were left out. To add my two cents to the article I’d add the following milestones:
Start Investing
Starting to invest is not limited strictly to putting money into the market place. Right now there is a lot of fear in the market place and there are many of us starting out who are skeptical on putting money into stocks just to watch the value diminish. Starting to invest can also include researching and learning fundamentals of the market. By the age of 30 you should be able to read a companies financial sheet and understand the terminology of the stock market. If you start feeling comfortable with it you can start investing real money. One method that Phil Town promotes is to paper trade. That is, you take a set amount of fictional money say $5,000 and you divide that into stocks you think are good. You write down the amount you would buy on paper and after a year you see how you did. If you are not ready to put real money into the stock market this is an excellent way to obtain comfort.
Build Savings
Everyone says you should have 3-6 months worth of savings in the bank. Set yourself a goal to save a certain amount every paycheck into a savings account and build up your emergency fund. Building a Savings is not limited to emergency funds, retirement savings is also included in this milestone. The sooner you start saving for retirement the less you will have to continually pump into the account and the higher your potential return will be years down the road. My office seems to be getting younger and younger. Us twenty somethings outnumber those over 30 by almost 5:1 and it simply amazes me how people I know spend their pay checks as soon as they receive the check while saving little to nothing. There are also many who do not participate in the company retirement plan which has a match. They are throwing away free money simply because they do not understand the plan or want to spend the money.
My Cents
So there are my two additions to financial milestones you should reach by the time you are 30. I’m sure there are many more but I will leave that to the readers. Do you have an additional mile stone you feel should be on the list? Leave a comment and let everyone know!
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I think you should start investing and saving before you’re 20. 30 is a little late IMO.
Definitely good additions. But the article assumes people are in debt and haven’t paid attention to their finances to this point. Many people are in that situation, but I think it is important for people to start earlier. If you can avoid credit card debt in your twenties, and invest instead, you have a great leg up on your retirement years.
[...] 8 Financial Milestones by 30 at Twenties Money — Are you still looking for New Year’s Resolutions? Here are great ones you can add to your list. [...]
1. I don’t have any credit cards to clean up because I stayed away from those bad boys (or girls)
2. I’ve started saving to purchase a 250K townhouse at age 25
3. I think I have a lot of marketable skills (still working on more)
4. I regularly contribute to different charity programs
5. I know exactly what I am trying to accomplish (Retire at 25)
6. I have a lot of mentors for different areas in life
7. I started investing in the stock market when I was 13 years old
8. I saving now for my emergency fund, for a another used car, for my future house. Also, next year I am going to start saving and investing about $600 into the S&P500. By the time I am 50 it will be well over a million dollars at 10% interest a year.