Making the right financial decisions at an early age can set you up for financial success in the future. Here are some targets to hit by age 30.
Financial Goals by Age 30 #1 – Appreciating Assets
Free Money Finance says that the median net worth of a person 20 to 29 years of age is just $6,400. This shockingly low number shows that 20-somethings spend way too much of their money on things that depreciate in value and not enough on appreciating assets. If you want to have a sizeable sum of money by the time you are 30, then you need to invest in assets that will most likely increase in value with time. You may want to spend more time investing in assets like stocks or real estate and less time worrying about the next car you would like to own.
Financial Goals by Age 30 #2 – Contribute More for Retirement
The average balance in a 401k plan is $71,500 according to Fidelity. This includes all individuals both young and old. It is estimated that the bulk of money saved in retirement plans is by individuals that are age 50 and older. $71,500 may seem like a lot of money, but it really isn’t if you are close to retirement. If you want to avoid having a small amount of money to retire on, then you need to max out your retirement plan contributions every single year. This way you will be on the track to avoid poverty in retirement.
Financial Goals by Age 30 #3 – Get out of Debt
The average young person has a massive debt load by the time that they enter their 30’s. Most young adults are saddled with student loan debt and credit card debt. The average student loan debt is over $23,000 and credit card debt adds another $5,000 among the 25 to 34 year old crowd. This makes it hard for young professionals to make any progress on saving money. I’d highly suggest being more than halfway to debt freedom by age 30 if possible.
Financial Goals by Age 30 #4 – Increase your Salary
By the time you are 30 years of age, you want to be in a position where you are watching your income grow year after year. Going back to school, gaining additional skills, or working more hours can all help you increase your earning’s power exponentially. As you make more money, remember to avoid significant lifestyle inflation so you can use the extra to hit the rest of your financial goals.
Where We Stand
I am 28 years old. My husband and I invest a lot into assets that we hope will appreciate over time – mainly stocks and bonds. We do still have about $60,000 of mortgage debt but are on track to being completely debt free by age 34. We also sock away $10,000 into Roth IRA’s for retirement and contribute to my husband’s pension plan fund as well. We are on target to have more than $2 million saved for retirement alone by age 52. In regards to salary, my husband’s is pretty set as a school librarian and I have more than doubled my own by pursuing my online career. In short – so far, so good.
What do you think of these targets by age 30?