A PNC survey showed that as a whole, one in three 20-somethings consult their parents for financial advice. That makes parents the most trusted source of financial information for 20-somethings. However, as 20-somethings reached the end of their 20’s, (the 28-29 age-demographic specifically), the reliance on parents for financial information shifts to the internet.
As your station in life evolves, so will your finances, not just your preferred source of financial information. Your twenties probably landed you a career, some debt, some retirement savings and maybe a spouse. By your thirties you are looking at promotions, job changes, children, a home and more diversified savings.
If you’re one of those twenty-somethings in transition and scouring your new favorite medium for obtaining financial information, please allow me to remind you of where you should have been financially and where you should think about going.
What You Should Have Accomplished
If you’ve been diligent with your finances, you’ve probably slayed many of the following financial dragons. Or you’ve at least been wrestling with them for a while. If not, it’s never too late. In fact, there’s no better time to master skills you should know than before life changes demand that you master new ones.
Figured Out that Whole Banking and Paying Bills Thing
If you have trouble paying bills on time or find you regularly overdraft your bank account, it’s high time you put a plan into action to get spending and bank overdrafts under control. Find an expense tracking method that works for you.
Consulted a Financial Professional
As I pointed out in my introduction, parents are the largest source of financial information for 20-somethings. Only about 7% of 20-somethings consult professional financial advisors. I suspect that there are concerns about trust, but there are many reasons why you should consider seeing a financial advisor. Seeing a financial professional does not need to mean paying a financial professional.
Found Some Things Worth Spending Your Money On
Sometimes we need to tighten the financial belt buckle out of necessity; like when there is an unexpected loss of employment or income. However, if your finances are within your control, all of that frugality and budgeting should not be your end, but a means in making life more enjoyable. Plan great vacations (frugally of course) and maybe take up a cause, like animal rescue.
You’ve acquired the degree and landed the job, but are you still working the same job? Perhaps career advancement is not part of your personal goals; but regardless of whether you choose to advance or remain where you are, there are important characteristics you should emulate in your work. If there’s a promotion, these characteristics will help you get it. If you are in the job you want, these characteristics will help you keep it.
Perhaps You Found That Special Someone
Wedding bells mean all kinds of adjustments. Do you combine finances or keep separate? Who’s in charge of the finances? Do you share responsibilities? Put the seat down! Get your socks off the floor! And, how get to your honeymoon vacation without spending all your money on airfare.
Most importantly, marry for love and not money.
Where You May be Headed
Expand Your Savings Goals
Hopefully by now you have an emergency fund, some retirement savings and you’ve paid down a little debt. However, there is so much more to save for, like your children’s college education. If you are transitioning, or about to financially transition, you may need to broaden your short, medium and long-term savings goals.
Rethink the Financial Advisor
If you are successful with managing your finances in your 20’s, your finances could be getting pretty complicated. It might be time to think about paying a professional. Retirement, estate planning, college savings, taxes, life insurance and small-business ventures: many 30-somethings are facing all or some of these financial behemoths. Don’t ignore them because they are too complicated to figure them out. If they are beyond your abilities, think about locating a good professional.
Build Equity in Your Home; Don’t Drain Your Pocket Book
You’ve decided that purchasing a home and equity building is the right housing choice for you. But, the biggest lesson you need to learn is how to keep that home from draining your pocket book. Finding the right house for the right price is the first step. Once you’ve crossed the threshold, learn how to save money on routine housing costs like your energy consumption.
Shop for Insurance Again
You should never stop shopping for your insurance.
If you found a provider you liked in your twenties, let the beginning of your thirties be about reevaluating your insurance company. Your needs change as you switch cars, purchase a home or find a new rental. These changes could affect how much you pay on your policy. You may also have new needs on the horizon, like children who will need you to have life insurance.