financial health is a term used to describe the state of personal money affairs. Financial health has many dimensions, including how much savings you have, how much you’re saving for retirement, and how much of your income you’re spending on fixed or non-discretionary expenses.
Therefore, know the seven habits to arrive with wealth at 30 and have better financial health.
1. Stick to a budget
Most 20-somethings have toyed with the idea of a budget, used a budget app, and even read an article or two about the importance of creating a budget. Yet very few people actually stick to that budget, or any budget. Once you turn 30, it’s time to ditch the bland budgeting process and start allocating where every penny you earn goes.
2. Stop spending your entire paycheck
The richest people in the world didn’t get to where they are today by spending their entire paycheck each month. In fact, many self-made millionaires spend their income modestly, according to Thomas J. Stanley’s book The Millionaire Next Door. Stanley’s book found that most self-made millionaires drove used cars and lived in average-priced housing. He also found that those who drove expensive cars and wore expensive clothes were actually drowning in debt. The reality was that their expensive lifestyles couldn’t keep up with their paychecks.
Start living on 90% of your income and save the other 10%.
3. Be realistic about your financial goals
What are your financial goals? Really sit down and think about them. Imagine at what age and how you would like to reach them. Write them down and find out how to make them come true. You are less likely to achieve any goal if you don’t write it down and create a concrete plan.
4. Learn about your student loans
An undeniable reality for millennials is that many of them are confused about how to navigate student loan payments. A 2016 study by Citizens Bank found that more than half of borrowers don’t fully understand the process of how student loans work, making the path to debt serenity seem far-fetched.
5. Find out your debt situation
Many people become complacent with their debts once they reach their 30s. For those with student loans, mortgages, credit card debt, and car loans, paying off debt has become another way of life. You may even see debt as normal. The truth is, you don’t need to live your whole life paying off debt. Evaluate how much debt you have outside of your mortgage and create a budget that will help you avoid going deeper into debt.
6. Establish a Strong Emergency Fund
An emergency fund is important to the strength of your finances. If you don’t have an emergency fund, you’re more likely to dip into savings or rely on credit cards to help pay for unplanned car or home repairs.
7. Don’t forget retirement
Many people reach their 30s without having contributed a dime to their retirement, or are making minimal contributions. If you want those savings you must save now. Stop hoping for a promotion or more wiggle room in your budget. At 30, you still have time on your side, so don’t waste it
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