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As early as now, you probably have a well thought out bucket list for dreams, goals, and must-see travel destinations.
Has it crossed your mind to have a financial one as well? A financial bucket list might be the most reasonable list you’ll ever develop in your entire lifetime. When one hits thirty, it should not only be a symbol of physical maturity but financial as well.
Coming up with an ordinary bucket list is often a no-brainer. Doing the same to a financial bucket list, however, may be a little scary and confusing – especially if you’ve never done it before.
According to a survey by Bankrate, a vast majority of adults – approximately 70% – live in fiscal distress due to a failure to plan for the long-term.
You wouldn’t want to live a life full of financial regrets in your life in your mid-thirties, would you? Just as you value your physical well-being, channel that same amount of attention (or more) into your overall financial health.
The best place to begin would be to set up a few financial goals and work tirelessly towards accomplishing each one of them by a certain point in your life.
The following are a couple of item suggestions for your potential bucket list that you should work to achieve before your 30th birthday:
1. Have a Successful Real Estate Investment
What’s the most out-of-this-world venture you can venture into before you hit 30? Clueless? Why not invest in real estate?
There’s nothing neither too big nor too small for anyone with a positive spirit. You’re never too young to engage in a Lucrative undertaking like real estate.
The best part about it is that you can kick-start your investment journey without having to worry about your rent. Fortunately for you, there’s a certain company that can help you achieve just that.
With Fundrise, you won’t have to pay heftily to enjoy the maximum benefits that come along with it. For a start, you’ll have to part with only $500 that will serve as a minimum beginner investment.
If you’re in your early or late twenties and you have a plan to venture into real estate one day, Fundrise would be the perfect place to begin your investments.
While you only need a minimum of $500, there’s no harm in investing a little more. From there, you’ll have the liberty to go into your Fundrise account and see what you actually own.
The longer you invest in your real estate properties, the more you heighten your chances of crossing out this item from your list before you hit 30.
2. Secure Your Financial Foundation by Consolidating Your Debt
There’s nothing worse than exploring the rest of your financial options with a huge burden of debt weighing you down.
Follow these four steps to rid yourself of all your dues and proceed with every other plan you may have debt free.
Determine How Much You Earn
The first thing you should do to determine how much debt you have in total is to develop a strategic plan of how to go about it.
You probably do a lot of shopping and minor payments here and there. Draft a comprehensive spending plan to help you determine whether you’ll have something extra left to take care of your debts.
More than anything, you need to have a stable source of income to meet all your individual necessities including minimum credit card payments, utilities or mortgage.
Plan for each of these and prioritize your spending. That way, you can have extra cash to pay off your debt faster.
Keep Your Credit Card As Far Away As Possible
It’s impossible for you to gain freedom from debt as you continue accumulating more and more debt. If you don’t have funds in your credit/debit card, you’ll be prone to borrowing a loan. Do whatever it takes to stop creating debt.
If you’re used to going on regular shopping sprees, you’ll have to ditch your credit cards. Instead, immerse yourself into the more traditional envelope system.
It will be a hard move, but one that won’t come back to haunt you once you’ve cleared your debt and are enjoying a financially stable lifestyle.
Give More Priority to Your Debts
The term given to clearing your debts sequentially is snowballing. There are two methods of snowballing: the balance order and the interest order.
In the first one, you clear your debt by paying them off from the smallest to the largest regardless of the interest rate.
The second involves clearing your debt starting from the one with the highest interest rate to the one with the least.
Finance experts advise that you go with the latter. Whichever of the two snowballs you decide to go with, just make sure you’re debt-free by the end of it.
Make The Necessary Payments
Pay the minimum on everything save for the debt with the highest priority that you stated in the previous step. For this one, you’ll have to pay a little higher than the minimum.
The moment you pay off the highest priority debt, gather up the average you were to pay for the minimum and implement it on your next priority debt. Keep up the cycle until all your debt is fully sorted.
Supposing you’ve cut down on your spending and you’ve picked up a side job specifically to pay off your debt, you’ll probably have some extra money left. The remaining cash can be used to take care of your lowest debt.
Most youths develop a debt problem as early as 22 years. Where should you begin if you want to enjoy a debt-free lifestyle later on in life?
Don’t wait until you’re older to start thinking of how to get rid of your debt.
3. Operate a Six-Month Emergency Fund
At your current stage in life, you may have a good job, fulfilling life and nothing to worry about when it comes to making ends meet.
Don’t wait till it all falls apart for you to see the need for an emergency fund. Anything can happen at any time, prompting you to rid your accounts to your last dollar just to take care of the issue.
By the end of it all, you may end up being very broke. If you don’t have an emergency fund to fall back on, you may find yourself in a humbling experience where you need to ask for assistance from your family or friends.
At the moment, while you still have time, try to work towards operating a six-month emergency fund.
It may be a really complicated process trying to amass six (or more) months’ worth of spending in a high-yield savings account.
That’s equivalent to an average stash ranging anywhere between $20,000 – $50,000, of course, which will depend greatly on your income and location. Do this especially if your monthly expenditure adds up to approximately $4,000 per month.
How much you should save to achieve these kinds of figures is entirely up to you. Right now, your monthly earnings may not be as impressive.
You may think that the figures stated above are ‘unachievable’ or ‘outrageous’. What you need in this case is a valid action plan. Here are a few steps to start you off:
- Calculate your average monthly expenditure
- Opt for the most suitable savings plan that’s not too hard on your wallet.
- Have a clear estimate of how much you need to set aside to meet your savings goals.
- Settle for a secure tax-free account where you can deposit your savings.
Being prepared for the worst can be really satisfying. If you feel that you’ll never have to cater for the unexpected, the money in your retirement account can easily be transferred to your retirement savings (if you already have one).
Although, based on most peoples’ financial experiences, don’t be so quick to transfer your funds. You’ll need the funds at some point. When you do, you won’t get unnecessary headaches trying to deal with the situation.
4. Restore Your Poor Credit and Build Up Your FICO Score
Before embarking on this venture, you should know that it’s not going to be a walk in the park all through. Restoring credit can otherwise be compared to losing weight – it takes time, patience and planning.
Never go for the quick-fix methods to even your credit score; they’ve been known to backfire 90% of the time.
The only sure way to go about the credit-rebuilding process is by managing it responsibly over time. If you have issues with your credit history, it’s best you look into that first before getting into improving it.
For now, here are a few essential things you can do to achieve a better credit score and boost your FICO score:
Pay Your Credit On Time
One of the most significant contributing factors to your credit scores is keeping tabs of when you need to pay your credit dues. This can be achieved by setting up payment reminders at your local bank via their online portals.
Whenever your payment is due, you will receive either a text message or email on your smartphone. You can alternatively enroll in automatic payments with the help of loan providers and your credit card. Payments will instantly be debited from your card.
Keep Your Credit Card Payments Up-To-Date
If you’ve skipped any bill, make it a point to review how much it is and clear it on time. The more you make timely bill payments, the more you increase your FICO scores.
Accumulation of past credit problems don’t really count, so you don’t have to worry about being haunted by poor credit card performance for the rest of your life.
As time goes by, the impact of older credit card problems on your personal FICO Scores will gradually fade away. Improving your payment patterns will instead be reflected on your credit card report, which further translates to improved FICO scores.
Watch How You Use Your Credit
First of all, don’t go applying and opening new credit accounts at your own pleasure. Opening an account to have an improved credit card mix can’t really be considered a means of increasing your credit score.
It’s good to have credit cards, but be mindful of how you manage them. Make payments in periodic installments to have a higher chance of rebuilding your credit scores.
In summary, ‘fixing’ your credit score is more about getting to know how to correct the errors embedded in your credit history (if any). Following the above tips will make your financial bucket list relatively easier to fulfill.
5. Manage a Successful Retirement Plan
As young as you are, why should you start planning for retirement as early as now? Seems counter-intuitive, doesn’t it?
In the real sense, your 20s are a perfect time to begin strategizing for the best retirement plan. When you start planning for retirement right now, you can accumulate money easier and gradually with little effort.
Yes, it may take a ton of aggressive saving, but once you start in your early 20s, you’ll have the unique advantage of enjoying early retirement.
In today’s world, there are a plethora of options to choose from when it comes to retirement plans. The easiest way would probably be to participate in a 401(k)/403(b) plan or other employer-sponsored plans.
Within these plans, you’ll be able to allocate a specific percentage of your income to your retirement plan. Most employers also make a company match available to you.
Under normal match arrangements, your contributions will be matched to approximately six percent of your salary by your employer.
On the other hand, if you’re self-employed or don’t have a particular employment plan, you still have the option of opening an individual retirement arrangement. (IRA).
IRAs allow you to contribute over $5,500 annually to your retirement account. In addition to your employer-sponsored plan, you can simultaneously operate an IRA account with no problem at all.
Whatever you opt for, just make set your retirement plan into motion as soon as possible with zero excuses or second thoughts.
In the course of your savings, you’ll need to be aware of how to establish lasting investing goals. Learn how to tackle whatever obstacle that comes your way.
6. Become a Cash Back Shopping Pro
Young adults have a knack for shopping – that’s for sure. You’re probably no exception. It’s time you took your shopping savviness up a notch by becoming a self-made cash back shopping pro.
With Ibotta, you can get your cash back by simply saving all your receipts after your shopping adventures.
During the weekend, you can coast through Trader Joe’s, Walmart, Target and all the stores you fancy knowing that you’re going to get your cash back. You’ll finally have a legit excuse never to pay full price for anything. It’s pretty simple, really.
Before you make your way to the store, compile a list of shopping items you would like to buy at the store.
After purchasing each of them, use your smartphone camera to take a photo of the receipt. Send the photo to the ibotta team, who will do thorough checks to prove the authenticity of your receipt before getting the most out of this unique cash back app.
If you enjoy running errands and shopping at your favorite brands, Drop is an alternative app that earns you gift cards on stuff you buy regularly. Think of it as the loyalty card but without the card.
For a bucket list item, becoming a cash back shopping pro is more of a fun experience than a challenge.
The good thing about it is that helps you to save money that you can otherwise use for more worthwhile purposes.
7. Start an Investment
While the rest of your peers are out splurging and partying like there’s no tomorrow, you can be ahead of the park by building your nesting egg through investing.
Don’t have any second thoughts about when to begin investing for your future. Now’s a perfect time.
How to begin can turn out to be overwhelming for some people. While in your twenties, you have a lot of options that can work out for you.
Even though you’re balancing stuff like mortgages and student loan payments right now, investing as early as now can add up exponentially down the road.
There’s a great strategy that comes along with setting and forgetting whatever investment plans you may have in mind. For the most part, you’ll want to make sure that all your investment strategies are in sync with your salary.
Each time you get a promotion, raise or other income increments, consider boosting your investment contributions. The higher you’re able to invest, the higher the chances of your investment’s success.
Compound interest can mostly have a hand in this. Basically how it works is that you receive interest on top of your benefits instead of simply cashing it out. Most other investment tools such as IRAs and 401(k)s operate similarly.
There’s nothing debatable about compound interest being the eighth wonder of the world – well, at least according to Albert Einstein.
Don’t go down the investment journey on your own. Seek the guidance of a financial planner or pro-investor.
Be open to the valuable insights based on their own mistakes or moves made by others. Above all, set some investment goals which will act as a driving force for a long-term investment.
8. Develop Some Healthy Habits
What does losing weight have to do with financial matters? The answer is simple: everything. People the world over are spending more on fast food joints than they are on other ventures such as investing or striving to clear their mortgages.
The average American, for instance, frequents fast food joints three or more times per week – according to a 2012 PBS News Hour report.
Annually, that translates to a whopping $1,200 on junk food alone. That automatically translates to $100 each month and $12.50 for each meal.
Of course, these are just estimates. Most of us – if not all of us – are guilty of engaging in some unhealthy pleasures which have the potential to rob us of our hard earned cash.
If you’ve not been adhering to your college diet and not being mindful of what you consume, it’s time you did some healthy turnarounds.
Set in motion simple but helpful healthy habits in preparation for your forthcoming decade. As much as your physical health needs some looking into, so does your financial health.
If you don’t have a specific driving force, HealthyWage should be enough to get you started on your weight loss goal. It’s basically a company that centers around health and wellness and pays its members for losing weight.
Debby Michaels, one of HealthyWage’s past participants almost bagged $4,000 after pushing herself to lose 80 pounds.
She’s one of the many participants who benefited greatly from hitting their individual weight-loss goals. How it works is simple:
- Create an account on the official site
- Decide on a weight loss goal and how long it may take you to achieve it
- Place a bet of between $20-$500 on yourself each month.
- Cash in up to $10,000 based on your HealthyWager.
Having a considerable wager will motivate you, even more, to live your healthiest life before you turn 30.
Without you knowing it, you’ll be spending less on expensive junk food and buying more cost-effective healthy foods.
Work Towards Fulfilling the Items on Your Financial Bucket List
Eight items on your financial bucket list is more than enough. You don’t want to pressure yourself too hard to achieve multiple goals by your 30th birthday.
As simple as the above may be, most people never make the cut. If anything, they push their target age to 40 if they’ve hit thirty and haven’t crossed out a single item on their bucket list.
Fortunately, not all people are built the same. You can achieve one or all of what you set out to do; that will rest solely on how determined you are to get things done.
Despite your financial status quo, stick to your guns and avoid the fiscal distress that comes with not achieving what you set out to do.
It’s up to you to adjust your financial habits and mindset to accomplish stuff that your peers seek to achieve in their latter years.