Financial Freedom February
//Financial Freedom February//
Day 4: Managing Money in Your Thirties
30 has come and gone, and hopefully you're finally getting the hang of this whole adulting thing.
If you're still stuck, or still have some questions, here are 5 things (and one bonus item) that you should implement in your life to ensure that the rest of your thirties set you up financially for the long run.
You Need a Budget
You Need to Pay Off Your Debt
You Need to Protect the Life You're Building
You Need to Learn how to Negotiate
You Need to Plan for Your Retirement
Bonus -- You Need a Source of Passive Income
All the cool kids are doing it. I'll be posting an article on how to budget later on in Financial Freedom February, but essentially, you need to figure out all the categories in which you spend money each month and add those up. Then, subtract those from your income. If you have money left over, throw it at debt. If you have too much month at the end of your money, you're going to need to 1. cut your expenses or 2. find ways to create additional income. Get used to doing your budget each month. It's not always fun. It's not always easy. But it's definitely worth it.
You gotta get rid of it. Is it fun? No. It's absolutely terrible. However, it's extremely rewarding and it really does lift a burden from your life when you get it paid off. I'll be covering the different methods of tackling your debt later on this month, too.
You need the right kind of insurance in place. A lot of you have tiny humans running around -- some of which aren't so tiny any more. Many of you own houses, a car, maybe a toy or two. Some of you even have your own small business. Are all of your assets protected? You need TERM life insurance. Not Whole Life Insurance. WLI is a ripoff, and the money you save switching to a term policy can be used to pay off debt or be invested into your retirement. I know, I plan on living forever, too -- and, so far, so good, right? But life isn't always fair, and you want to be prepared for the unexpected. The worst thing you can do for the people you love and care about is put them in a situation where they'd face financial hardship due to your unexpected passing. And you can get a term life insurance policy for cheap -- I'm talking around $30/month for $500,000+ worth of coverage.
You also need homeowners/renters insurance, auto insurance, long-term disability insurance, and health insurance. If you have a considerable amount of wealth/assets, it makes sense to have an umbrella policy as well.
The nice part is, you can bundle several of these insurances together and save money. You also should shop around for quotes and make sure you're getting the best rate. Also, don't let there be lapses in any of your policies as that can create additional havoc (and costs) in your life.
If any of my friends are insurance agents, please feel free to post below!
People nowadays are terrible negotiators. Why? Because we tend to take everything personally. Just remember: Everything is for sale for the right price. And a negotiation is just business. Don't take it personal. There will most likely be some big and small negotiations that take place during your lifetime. Remember that cash is king, so if you're buying a house or a car and have a large chunk of change lying around you have a lot more leverage than someone who needs to take out a loan.
Other things you'll need to learn to negotiate in your life are things like your salary. Honestly? For most people it's going to be their biggest source of income for a good chunk of their lives. It's important to know your worth both during a job search and also while you are employed. Seek to become a person of value. Keep up-to-date on technology, learn new skills, and be a problem solver instead of a problem finder and you will be rewarded.
Do a comparison as to what other professionals in your industry in your city are making. Before accepting a new job, know that it's okay to counter. I've countered on several offers and you know what? No one has ever rescinded the offer from me, and I usually got what I wanted, or at least a part of what I asked for.
Negotiating is an art. Learn it, and use it.
I am going to be writing an entire segment on this, but if you haven't started planning for retirement, the time to do so is NOW. Actually, it was about 10 years ago, but we're not going to cry over spilled milk during Financial Freedom February, so find a financial planner, start investing in your company's 401K, start a Roth IRA or a traditional Roth and start sacking away funds for retirement.
Bonus -- Passive Income
Another line item I'll be tackling later this month, but find a source of passive income. There are so many ways to make money in the world, and if you just put in some hours on the front end, you can reap some serious rewards on the back end. Some ideas are... becoming an affiliate marketer, joining a network marketing businesses, owning real estate, owning a franchise, writing a book, renting out a room in your house, buying stocks that pay dividends, creating an online course -- and many other ideas, too. Seriously, Google "how to make passive income" and there are nearly 46 MILLION results.
Find a stream that works for your and add it to your portfolio!
How are your 30's shaping up?