7 Personal Finance Must-Dos by Age 35

If this is your 1st time delving into the world of personal finance, I have good news and bad news for you. First, the good news. There is a TON of great information out there to get you started on your journey. The bad news is that there is SO much information out there that it is easy to feel overwhelmed.

There is a good reason for that. Financial advice is subjective, and the American Dream is different for everyone. If I put 10 people in a room and asked them what the “American Dream” is to them, I’d bet a week’s pay I would get 10 different answers.

Nothing wrong with that. It just makes it tricky to understand what information out there can help you the most and at what time in our life.

For many of us, our 20’s are a time of exploration and sometimes questionable decision-making! 😊

Going on road trips, developing a group of core friends, hanging out at parties, enjoying the nightlife, and exploring relationships can push us towards actions that give us a shaky financial start.

By the time you are in your 30’s, the parties start to wind down, friends find the love of their life, and people tend to look at their finances with a more serious demeanor. Maybe it’s the 1st strands of gray hair spotted on their head but hitting your 30’s is usually a wakeup call to get your s**t together.

The sad reality is that most Americans spend more time planning their vacation than reviewing their finances. For years, money has been a taboo topic and financial honesty is very important. Yet according to a recent survey, 4 out of 5 Americans (about 80%) admit to lying about money.

As I’ve talked about before, I’ve had a lot of fun in my 20’s and made my share of mistakes along the way. For today’s article, I picked 7 things I wished I would have focused on more and had in order before I turned 35.

Stick To A Budget

If I had to pick 1 thing to focus on for financial success by the time I was 35, it would be to learn to create and stick to a budget.

By the time you hit your 20’s, odds on, you’ve probably played around with creating a budget, maybe used a budgeting app, and maybe even read a couple of articles about the importance of budgeting.

However, the sad reality is that very few people actually stick to a budget. At first, budgets seem uncomfortable and maybe even constricting. This is farthest from the truth. As I’ve talked about here, budgets set you free because it focuses on what is important to you and makes it a priority.

By the time you hit 30, it’s time to focus and hone in on a budget. Odds on, you are in a serious relationship, maybe even married. Hell, you may have a baby on the way. Your priorities are shifting, and your financial priorities will be too.

The overall point of budgeting is to know where every dollar of your money is going so you can make sound financial decisions. A dollar here for this and a dollar there for that really can add up over time and make you go, “Where the hell did my money go?”

Now, I’m not saying that it is bad to spend money on a night out, a vacation, buy the motorcycle you always wanted, etc. What I am saying is that you need to know what is important to you and make sure your money is spent on your priorities, NOT spur-of-the-moment whims. Budgeting allows you to take charge of your spending.

Here is a tip for getting started with creating a budget: Document your spending. Seriously. I know it’s a pain but if you take the time to document your spending for 2-3 months, it gives you the foundation you need to understand where the money is currently going and make adjustments.  Just make sure to write down where every dollar is going, how much of it, and what it does to your budget. Then cross-check it against your checking account. You’ll use this as the foundation for creating your budget.

Using a budgeting app like Personal Capital or Mint is a great place to start. You can also use good old-fashioned tracking in a checkbook ledger to cross-check everything and make sure it’s accounted for.

Invest In Your Career

Investing in yourself, particularly your career, when you’re 35 or younger works to ensure you have a strong financial position when retirement arrives.

How is that?

Investing in your career serves to create a foundation for not only your professional life but your personal life as well.

Your career is your most valuable financial asset. From ESI Money, your career is worth millions of dollars! Investing in your career, even modestly, could be worth a million dollars (or more) over the course of your career.

Don’t believe me? Let’s do a little math to find out.

Let’s make the following assumptions using CalcXML:

  • Starting salary is $50,000
  • 5% average pay raises per year
  • 40-year career

Guess how much you made over the life of your career?  $3.4M!!! Yes, you made $3.4 million over the life of your career.

Play with your numbers using the link above to see how much you could make over the life of your career.

7 Must Dos by Age 35

If investing in your career improves your average annual raises by just 1%, it could be worth millions to you. Mind-blowing isn’t it?

Here are a few ways you can invest in your career:

  • Advanced degree – Getting an advanced degree can mean the difference between your current job and that next big promotion. Some career paths require an advanced degree to make that next jump in pay. In my company, most of the directors and above have at least 1 advanced degree. It’s better to get that degree when you’re young in your career before marriage and family priorities take over your life (I know from experience! Lol 😊).
  • Certifications – Other career paths don’t care about advanced degrees, but they require additional certifications to earn a better living. A great example is IT. IT is one of the few careers left where the more certifications you have, the more skills you’ve gained, and the more marketable you become.
  • Find both mentors AND advocates – Everyone tells you to find a mentor. If I had a dime for every time someone told me that I would have retired already. What most people don’t realize is that you need mentors AND advocates to advance your career. Why is that? Mentors act as coaches to give you advice and share their experiences so you don’t make the same mistakes. An advocate talks on your behalf when it comes around to performance review and promotion time at your company. If you don’t have people talking about you and all the positive things you can bring to the position, you’ll never be promoted. Putting your head down, working hard, and hoping people notice you will only get you so far. After that, you need mentors and advocates.
  • Network – You may be wondering, “how do I get mentors and advocates”? Network! Especially when starting out in your career, getting to know and build relationships with as many people above you, below you, and parallel to you is a big key to career success. The reason is that you never know who you may work for or with someday. When they think of you, they should be talking nothing but positive things about you and WANT to work with you.
  • Marketing Your Accomplishments – Getting people to talk about you in only half the battle. You also must give them something to talk about. This is where marketing your accomplishments comes in. Marketing yourself and what you can do is a key for getting people you do and don’t know to understand what you are capable of and can bring to their organization.
  • Create a Side Hustle – Not finding opportunities at your career to grow your skills? Start a side hustle! A side hustle can grow your skillset in ways your career may not be able to at this time. Later in life when you need those skills, you’ll have them ready for making the next jump in your career.

Investing in your career early and often allows you to let time work in your favor. If you haven’t done much early in your career (like I did 😊), it’s not the end of the world. It’s never too late to get started.

Understand Your Why

If your main purpose in life is to make as much money as humanly possible and you don’t care who you have to step on to do it, odds on you will not be very successful in your career or in your life.

Understanding your why is a BIG key to success because it leads to you understanding what makes you tick, what gets you out of bed in the morning, and what your ambitions really are.

Your why is the thing you want more than anything. It’s your driving force and the thing that gets you up in the morning. It gets your heart racing and blood pumping! In other words, it’s your passion point.

To be truly successful in your career and maximize the value you can bring, you must understand your why. If you want to be successful, you must figure out how to bring value in whatever you do because money follows value, not the other way around.

Taking the time to understand the why behind what you do will unleash your passion and motivation to pursue them. It will make you strong enough to overcome any setbacks or if you stray from your goals.

If you’re struggling to find your why, here are 5 things you can do to find it.

Take Charge Of Your Debt

In your 20’s, it’s easy to rack up debt. Between paying off student loans, credit card debt, and maybe having marriage debt, or a mortgage, it’s easy to see why your savings can be impacted.

In fact, the average American under the age of 35 has accumulated $67,400 in debt. Between 35 and 44, the average number increases to $133,100.

That’s an insane amount of debt especially when trying to establish your life. It’s understandable to see why a person might become complacent about their debt once they are in their 30’s. They may even view it as normal. It shouldn’t be the case.

Paying off your debts will have a significant impact on your finances. You will have more breathing room in your budget and more money freed up for your financial goals.

Luckily, there are things you can do to reduce or eliminate debt.

One way is to consolidate your debt into 1 easy payment. If done correctly, it can save you thousands of dollars in interest, lower your monthly payment, and ease your financial burden.

Another way to take charge of your debt is to stop spending your whole paycheck. Make sure your monthly expenses are less than you monthly paycheck. The world’s wealthiest individuals didn’t get to where they are today by spending their entire paycheck. In fact, many self-made millionaires spend their income modestly and took control of their debt.

How to get started?

Start by living off 80-90% of your income and save the other 10-20%. Have that money automatically deducted from your paycheck. As you pay down the debt, take the extra money and invest it. Gradually increase the amount you save while decreasing the amount you need to live off of. Ideally, learn to live off 60% of your paycheck while saving and investing the remaining 40%.

Max Out Savings And Retirement

Once your debt is under control, it’s time to start building up your assets. It’s never too late to start saving even if at or near 35. Hell even if you’re over 40, it’s never too late to start saving. Even saving as little as an extra $50 per month can go a long way.

At age 35, you should have at least 1X your salary saved for retirement. If you don’t that’s ok. There is still time to catch up.

There are number of ways you can save money. You can save in a traditional savings account, set up a brokerage account, invest in a 401K, or even a 529 plan. The point is to save as much as you can.

At the least, you should have maxed out your 401K and preferably start a Roth IRA. You should have at least 6 months of savings in your emergency fund. The sad reality is that people believe that there is always a later time to save when the time is now.

By age 35, you’ve lost some time and compound interest but it’s not too late to get back on track. Remember, compound interest is your friend. The more you put away and the longer you save, the larger your account grows.

Create An Estate Plan

By the time you reach the age of 35, it’s highly likely that you are married with kids. This is the ideal time to create an estate plan, assess what you have, and what your wishes will be in the event of your demise.

A lot of people say that you just need a will. The problem with wills is that it can be contested in court. If that happens, the assets you left for your loved ones could be tied up for months in probate court and drain a lot of your hard-earned savings in the process (something / someone has to pay for the court fees!)

To avoid this situation, an estate plan is needed. An estate plan is much different than a will.

A will is a legal document that details how you want your assets to be distributed after your death and can lay out your wishes when it comes to how children are cared for after your demise.

An estate plan is much more comprehensive, broad, and complex. An estate plan not only includes a will, but it will also include powers of attorney (durable for finances and healthcare), advance directives, trusts (including trusts for special needs children), and much more.

Estate plans even go beyond that with things such as who has the power to make healthcare decisions on your behalf if you’re alive and how to distribute assets after your demise.

An estate plan can be as broad or as narrow as you choose AND are not contestable in probate court. Without plans in place, someone could go to court to gain conservatorship over your finances if you become incapacitated.

Estate plans are relatively inexpensive to setup, takes a little upfront planning, and can be updated at any time. It’s the best approach to take to ensure your loved ones are cared for and to ensure your wishes are met.

Purchase Life Insurance

I know, I know. You’re thinking, “Why do I need life insurance, I’m single!”. The best time to buy life insurance is when you’re younger because the premiums are age-based. The younger you are, the cheaper it is, and the more coverage you can afford.

The reality is that most people find someone to spend the rest of their life with in their 30’s. When you pass, you want to make sure they are taken cared of, right? Enter life insurance.

If you think in the future you will have kids or have kids already, then now is the time to buy life insurance. If something happens to you, raising kids as a single parent can be a HUGE financial burden (ask my wife when she was a single mom, it’s not easy! 😊).

If strapped for cash, start with term insurance. It’s cheap and affordable to at least give you some basic coverage. For example, you can buy $1M of term insurance for as low as $25/month. For the price of a couple of lunches per month, you can have $1M in coverage… nice!

Term insurance is a great start, but you should also invest in permanent life insurance. Term is designed to benefit your loved ones, not you.

Permanent life insurance has a lot of benefits that you can access while you’re alive! Plus, it has a cash value you can access while living for several purposes.

Check out this article I wrote about term and permanent life insurance for more details.

Bottom Line

Your 30’s can be frightening for a variety of reasons, but your finances shouldn’t be one of them. Take the reigns of your financial future and set yourself up for a comfortable life that protects your priorities and the people you care about the most.

7 Must Dos by Age 35

Everyone’s financial situation is different but following and implementing these 7 must-dos by age 35 will give you a great financial foundation to build off of.

Take care……..

Live The Life You Love, Want, And Deserve 😊