5 Money Goals in 2022 Before 30
Like most of us, you feel you need to start saving for the future. Not because you’re necessarily worried about money, but because you want a financial cushion if mayhem goes down.
Whether you’re a millennial just starting in the world or your mid-to-late twenties, here are five money goals to help you through the year 2022 and achieve financial freedom by the time you turn 30.
On that note, here are five money goals before 30 you can start working on right now to ensure a fat bank account and a great financial future.
1. Have an excellent credit score
Having an excellent credit score will allow you to make big purchases without worrying. It will also make it easier for you to find a job, get a cell phone plan, and rent a car.
The average credit score is 695. To get an excellent credit score, you need at least an 800. In fact, the higher your credit score is, the more likely it is that you will be approved for credit.
An excellent credit score can earn you access to low-interest rates and exceptional perks and benefits not available to those with lower scores.
An excellent credit score will help you in the following ways:
- Qualify for better interest rates on loans and mortgage
- Apply for some jobs without providing a credit check from the employer
- Get approved for low-interest cell phone plans
- Rent a car without paying extra fees or deposits
2. Diversify your investment portfolio
It’s essential to have a balance between stocks and bonds — and even cash if possible — to ward off the risk of market volatility that could affect your retirement funds.
If you can’t stomach the thought of watching your money fluctuate, consider investing in index funds or exchange-traded funds (ETFs) such as VOO or VTI, which mimic the behavior of different indexes, such as the S&P 500.
3. Set up proper insurance
Your health insurance should cover things like your medical, hospitalization, and prescriptions.
Your dental insurance should cover:
- Checkups
- Cleanings
- Routine procedures like fillings, root canals, and crowns.
Your property insurance should cover your:
- Home against damage from fires, floods, and hurricanes
- Car against damage from accidents or theft
- Belongings against damage from natural disasters or burglary.
And your life insurance should cover your funeral costs and final expenses so they don’t fall on loved ones left behind. Insurance is often looked over by most people, but not you. Think of it as an investment that safeguards you from out-of-the-blue financial burdens.
Expect the unexpected.
4. 50/30/20 rule
You’re probably already aware of the 50/30/20 rule of budgeting, but just in case, here’s a refresh button.
It essentially recommends that you take 50% of your income to spend on needs such as rent, food, and utilities, 30% of your income on wants such as entertainment and clothing, and lastly, save 20% of your income on savings and investments for future goals like your retirement fund or a house down payment.
These proportions are default amounts, and yes, you may switch things up according to your preference (e.g., 50/25/25 or 60/20/20). If you want to pull off a budgeting method successfully, stick to it religiously. As simple as that.
5. Set up a retirement timeline
When you have a specific goal in mind, such as having 1–2 years of income set aside by the time you’re 30 years old, it gives you a target that drives your behavior.
Let’s say you’re 25 and make $50,000 a year. You still might be able to contribute to your 401(k) at work and save some money from your paycheck in an IRA on the side, but if your goal is to have a sizable nest egg by 30, you’ll need to ramp up your savings efforts and find ways to reduce expenses.
This is easier said than done for many people — most people don’t even have enough saved for retirement — but not you because you want to beat the odds. So start early and be disciplined about your savings efforts; you’ll thank yourself later.
Start setting money goals in 2022 before hitting 30
Planning for your future is essential because it allows you to set aside money for things later. Leaving money for your later years isn’t only helping yourself–it will help the world around you.
With a long-term goal in mind, saving money and being more frugal boils down to figuring out what your friend Joe Rogan calls “If this, then that.”
If one thing happens, then another occurs automatically. So, say if you earn income, save and invest a proportion of it. This method is limitless and can shave years off of your reaching financial freedom. Godspeed.
