Guest Blog Post by Aaron Hatch
Establishing financial goals is the first step toward reaching your financial aspirations for your life. Without goals, no one would ever be able to set a path toward achievement.
Of course, all financial goals will be deeply personal to you and your family. There are, however, a set of goals that we’ve organized here to offer some guidance of the sorts of goals you may want to be working toward once you’re in your thirties. By this age, you are likely earning a higher salary and able to put more toward your future. By this age, you are also very likely dealing with a few life changes and perhaps even one or two additions to your family. Securing your finances for today and tomorrow can suddenly become very important, seemingly overnight.
Here are fifteen financial goals you can start working toward in your thirties:
1. Max Out Your Retirement Contributions
Maxing out your retirement contributions is an important goal you should be striving for in your thirties. Ideally 15% of your income is going into retirement savings.
2. Live Debt Free!
Try to get out from any and all debts – credit cards, loans, everything. Living debt free means that you don’t owe anyone any money. With the exception of a mortgage, try to get out debt as soon as possible and then stay that way.
3. Live Within Your Means
This means that you spend what you have today, not what you will have tomorrow or think you can afford. Even if you use credit cards, operate like you’re on a cash system alone so that you only purchase what you can literally afford.
4. Maintain Good Credit
Good credit is important so that you can borrow at a lower interest rate. You can use credit cards just fine and enjoy the perks of their rewards programs by paying off your balance every month. Having good credit will enable you to secure a mortgage at a lower interest rate, which can wind up saving you tens of thousands of dollars.
5. Hello Fully Funded Emergency Fund
Life is full of change and uncertainty. You need to have an emergency fund and it should be able to cover your fixed expenses for at least six months. No ifs, ands or buts about it.
6. Proactively Direct Your Money
Direct your money to what is most important to you. There is no reason to spend money in ways that doesn’t help you reach your financial goals or bring you joy. Sure, we all have expenses we can’t avoid, but try as best you can to put the rest where you want it to go.
7. Be Financially Organized
It’s good to have a system to organize your money so that you can easily manage your finances. Bills, credit cards, checking accounts, savings accounts: consider linking them so you can access everything in one place.
8. Delay Gratification
Rather than charging a purchase, especially a large one, and thinking about it later, plan for a large purchase, save for it, and then purchase it when you can pay it off in full.
9. Reduce Your Taxes
Are you paying too much in taxes? Find out and stop overpaying in taxes if you are. There are tax incentives out there that you very likely qualify for. Consult with a CPA and your financial advisor to see ways you can minimize your tax exposure and keep more of your money.
10. Build Your Net Worth
By getting out of debt and increasing your income and assets, your net worth will grow.
11. Practice Generosity
Generosity is a great financial goal to have. When you have enough money that you are able to share it with causes and charities that you believe in and support, that is powerful.
12. Cut Out Unnecessary Expenses
Don’t waste money on unnecessary expenses and fee. Double check your credit card statements and make sure you cancel any recurring charges that you no longer need. Even the small fees add up over time.
13. Work Toward The Future
At this point, work with your eye toward your future. Retirement isn’t as far off as it once was. Make financial decisions through a lens of financial stability and security.
14. Set a Clear Career Path
As you round your thirties, what will your career and income potential look like for the next twenty five years? If you are able to set a career path that maximizes your income potential and helps you reach your financial goals, as well as your career aspirations – all the better!
15. Get a Financial Plan that Maps Out Your Life
A financial plan can help you in all of these areas of your life and can work with you to establish specific financial goals for you and your family. Start making your financial dreams come true.
Based in the far Northern California city of Redding, Woven Capital specializes in helping small business owners, entrepreneurs and physicians navigate their biggest financial hurdles to make smarter decisions with their money.
Aaron and I became friends after meeting at a financial planning conference geared toward Gen X & Gen Y advisors and I asked him to write some thoughts as a guest topic for this site.