Okay okay… as much as I hate to admit it … I am getting older. And as I live in a constant state of fatigue with a current minor knee injury, the tell tale signs are hard to ignore. (Plus I get residual grandma reminders frequently). 2018 is going to be a big year for my friends, my family, my career, this blog, and for me. Whew… there’s a lot on he horizon (and I’m so freaking excited and terrified)
I am turning 30 in 10 months, and most of my friends are also turning 30 at some point in the upcoming year. So this post is as much for them as it is for me. I’ve been dropping a few jewels here and there (more frequently as of late) on how to tackle your student loans in a practical manner. The truth of the matter is I graduated in 2010 with my BA and MA and about 90,000 dollars in student debt. Out of that 90,000, about 60,000 were in private loans and 30,000 were federally provided loans. Stick with me… there’s a minor difference.
I spent four years mostly complaining about having to pay back my student loans, while making minimum payments. That was pretty much a pointless waste of time and my money. In 2014 I decided to make a plan that would excel my private loan repayment schedule because those loans had the highest interest rates (13-17%). I am happy to say that after three years on a teacher budget I have been able to make a serious dent in my principle, and have 14 months left before that balance hits ZERO!
This brings us to the main event of this post. You have to learn what to do with your money. Those four years I spent complaining were a complete and utter waste. I was paying almost 7000 in interest a year without ever seeing the balance decrease at all. By the time you turn 30 you should have just a bit more know how when it comes to managing your finances and if you don’t hopefully this starts to point you in the right direction.
10 Things To Do With Your Money Before You Turn 30
1. Stop living paycheck to pay check or 1-2 paychecks into the future: I don’t care how many of my friends I offend with this… because honestly I’m throwing shade at my damn self as well. STOP LIVING BEYOND YOUR MEANS! I do this often when I work summer school or overtime. Essentially spending the money that hasn’t arrived in your hands yet is a dangerous, pointless and childish game to play with your hard earned money. When I think of how tired I am on the train in the mornings at 5:30, or how exhausted I am staying after school to tutor… I should know better than to make extravagant purchases because I have “money coming”. That is a terrible way to think when it comes to responsibly managing your money. It also will essentially keep you living from paycheck to paycheck. And that my friends is no way to live if you have a choice.
2. Pay Off Your Student Loans : Now for some this may not be possible to do before 30, but you want to start making moves in the right direction. Speak to a financial advisor, repurpose your money and pay off the principle. Those interest only payments are going to do nothing but get you vexed down the line (trust me… I speak from experience).
3. Increase/ Max Out Your Retirement Plan: Every time I get a raise at work I increase my retirement percentage and it sucks. I don’t even think I’ll make it to retirement but the responsible old grandma inside of me won’t let me spend that extra money frivolous. Especially because I can borrow from my retirement plan in order to buy a home. Repurposing my own money and paying myself back with interest! I believe the current maximum contribution is 18,000 into a 401K. That may be a lot to lose out on in your day to day living, however it will help you pay back less taxes therefore saving you money in the log run. If it is not possible for you to max out your retirement plan start slow and increase in small increments. The first four years in my teaching career I stayed between the 5-7% range. I’m currently at 11%.
4. Look Into & Open A Supplemental Retirement Plan : There are supplemental retirement plans you can add on to ensure your money is going into the right place, and setting you up for a much easier retirement process. Don’t just rely on one source of income now in your 20s, and later when you retire. That is why it is important to look into your other options when it comes to saving for retirement. Coz I know I plan on baling out when I no longer have to work.
5. Have 10K or More In Your Savings Account For Emergencies: As you grow older your emergency fund must also mature with you. In my early 20s saving 1000 dollars was a blessing. And at that time it was fine because I had less bills and responsibilities to take care of. Now I aways keep a particular number in my savings (I’m not trying to have all my business on the internet) that gives me peace of mind if ever I wouldn’t able to work for an extended period of time. My savings habits into my savings accounts (yes I have about 5 different savings accounts for different things- one is for my dog) is what has essentially helped me pay off large amounts of my principle.
6. Get Rid Of Your Car Payment: Do I really need to go into detail as to why you need to get rid of your car payment? Like c’mon. Car payments have always been the bane of my existence so whenever I could I got rid of them. I’ve only had two cars and both I’ve paid off within 2 years of purchase. Cars depreciate guys… pay the note and be done with it. (And cut it out with that lease nonsense… leave that for the foolish and the 1%)
7. Cut Cable & Reassign that money to another bill/ debt : I’ve been living without cable for over a year and you know what I don’t miss it at all. Get you a Firestick, Kodi, Netflix if you must and call it a night. You can even get Hulu if you’re feeling fancy, and you will still be paying less than you would with any cable company. The only thing I can not leave behind is wifi. I need Internet for my business, for my career and for my sanity. So with that, I cut cable and kept my high speed internet. I was still able to cut down 70 dollars a month. Next I’m targeting my cellphone bill.
8. Look Into & Learn About Owning Property: I still live at home, and I’d love to move out before I turn 30 that is absolutely a goal of mine. But I refuse to move in and rent anything. No shade to any of my friends that rent, because ya’ll do it and make it look BOSS. Plus it gives me a ton of places to run off to and hang out when my family is driving me crazy. I personally can not bring myself to waste that money. Do my parents get on my last fucking nerve.. ABSOLUTELY! However it is much wiser to save and invest your money into property that you own. I don’t know if I’ll have house buying money soon but a Co-Op or condo definitely may have my name on in it in 2018 or early 2019.
9. Invest In Stocks: With so many sites and companies making it easier to invest in stocks you definitely want to step into the game with some sort of knowledge. I started investing in stocks about 3 years ago and invested in things I liked. So Twitter, Fitbit and Etsy got my money and lost me money. Invest wisely and again speak to a financial advisor for some means of advice.
10.Create a financial Plan: Once you turn 30 that isn’t the end. You still have a whole lot of living to do and that is going to cost some coin. Don’t spend crazy in your 20s and spend crazier in your 30s. Do better for yourself and for your future. No one wants to work until their 90 and if someone tells you do they do they are either crazy or lying. Make better financial decisions so that you can experience true financial freedom. Create goals both short and long term and make your money work for you for a change. Shit… I’m trying to make my money hire an assistant … going a lot harder than I anticipated.
BONUS: *Know Your Worth– And I don’t mean that in a like you go girl independent woman kind of way. I mean it in a get a financial advisor to go over your net worth with you. There are tons of options to finding financial advisors that either work for free or charge a minimal payment. You need to know how much you are worth fiscally. Apparently I am worth more dead right now than alive… but we won’t even go there. Point of the matter is…just like you should always know your sexual status, you should also know your financial net worth.