Are you younger than 40 but older than 29 and starting to worry about long-term financial health? You are not alone. The thirties are the most common years of life to begin thinking about things like stability, health, retirement, and many other long-range concerns. After all, once you cross the milestone of the 30th birthday, it’s time to get serious about life. Getting serious entails many things, like purchasing a first home, deciding whether to marry, saving for retirement, working with financial advisors and dozens of other important tasks.
Buy a House
If you can afford the down payment and have good enough credit, get out of that apartment and move into a house or condo. For the purpose of building long-term credit, owning a home is the single best thing you can do for yourself. If you’re single, shop for small homes in the best neighborhoods you can afford. And, if your income is high enough to sustain a larger payment, think about getting a 15-year mortgage so you can have the place paid off by the time you’re 55 years old.
Consider a Life Settlement
First, do some research and review an accurate, helpful online guide about how life insurance payouts work. In short, you can sell your policy for more than its cash value, but the buyer will get the death benefit in exchange. Life settlements are a smart, ready source of cash for working adults who decide that they no longer have a need for coverage.
Two things are worth keeping in mind if you sell. Ordinarily, your payout will be less than the stated death benefit but more than the cash surrender amount. The tax you pay on the proceeds will be based on your cost basis in the policy. For example, you won’t be taxed on a payout amount up to what you paid. The rest of the proceeds are generally considered ordinary income, for taxation purposes only.
Delay Marriage
It’s purely a personal consideration, but the longer you put off getting married, the more money you’ll be able to save. This is just a fact of life, but it’s also the reason so many professional people choose not to marry until they’re 35 or older. Being married itself is not costly. It’s that so many newly married couples have children within two years of tying the knot. Once you’re supporting one or more children, the chance to really sock away a major amount of money is often lost. That’s why it pays to wait for a few years after your 30th birthday to start looking for a life partner and planning your wedding, another costly fact of marriage.
Buy Health Insurance
Once the Affordable Care Act took effect, millions of working adults quickly discovered that they were either without health insurance coverage or that the price shot up by more than 100 percent. Even though the ACA offers subsidies for low-income people, the plans are still pricey and tend to resemble the old high-deductible plans that were around before ACA became law.
Try to find a private carrier that you can afford. If you can’t afford the ACA plans because your income is too high (too high according to ACA is a relative term), at least find a catastrophic plan, with high deductibles, so you are protected against major medical emergencies. Unlike life insurance, you need medical coverage to safeguard your financial solvency.
Don’t Buy New Cars
New cars lose up to one-third of their book value during the first year of ownership. There’s simply no sound financial reason to buy one. Instead, find a two- or three-year-old car you like, put as much down on it as possible, and be sure to check its reliability in detail before you sign the paperwork. Another effective way to save on a car is to use a buying agent. Not only will you avoid a trip to the dealership, but the agent’s fee is more than offset by what you save on dealer commission. Of course, it’s also a simple affair to tell the buying agent exactly what year, make, and model you desire.
Hire a Financial Advisor
Hiring a financial advisor (either a certified public accountant or certified financial planner) is a move that can save you thousands in the long run. You’ll pay a reasonable fee for expert advice about making a detailed budget, finding the best investments, uncovering any financial problems before they become major disasters, and much more. Be sure to find an advisor who either prepares taxes (all CPAs can) or has a staff member who does the job. The goal is to find a one-stop-shop for all your money needs, not just tax preparation, and budgeting. Competent advisors earn their fees many times over based on the amount of money they can save you.
Save For Retirement
Once you’re over 30, it’s time to get serious about saving for retirement and beyond. A professional can help you with this step, but you should be able to open and fund an IRA on your own. Hopefully, you did this long before turning 30, but if you didn’t, there’s no reason to panic. Many people don’t give a thought to opening an IRA until they reach 40, but that’s not a recommended strategy.
The reason to view retirement as an essential component of financial health is that the earlier you start saving, the easier it is to build up the size of the account. If you begin at age 30, for example, you get the amazing benefit of compound interest for at least 35 years. For example, saving $750 per month, at six percent compounded interest, for 35 years results in a balance of $1,068,532. Of course, some people buy houses, get married, and start saving for their golden years while in their twenties. If you did, congratulate yourself. Still, read through the above tips. They all have the potential to increase your chances of avoiding money troubles and heading into middle-age with no worries.
