Your 20s are filled with new experiences, and they have served you well. You’ve begun to learn some things that can help your future success. As a young adult, the decisions you make now affect your future wealth, because true wealth takes time to build.
As you move into your 30s, it’s time to start putting away money while you still have plenty of time ahead of you to reap the benefits of long-term investments. Whether you’re starting a family now or in the future, it’s a good time to focus on financial stability. This is the time to build the foundation you need to withstand kids, emergencies, job loss or any other adventure life throws your way. Here are six investments to make by the time you’re 30:
1. A Car
If you’ve lived in a major city and enjoyed the benefits of public transportation throughout your 20s, it might be time to invest in a car. Getting started with a car loan is great way to build your credit, which will come in handy when you want to buy a house or if you need to take out a personal loan during an emergency like job loss. Pay your car payment at least two weeks early each month, and pay more than the payment requires so that you can boost your credit score faster.
2. A House
A house is a great asset to have, but it takes time to build home equity. Invest in a house now so you can start growing your net worth. Home buying can pose a risk of identity theft, with credit checks and information sharing between different parties, so learn about how you can protect your identity during this process.
3. Identity Theft Protection
If you haven’t done so already, now’s the time to invest in identity theft protection. It’s like an insurance policy in case a cybercrook steals your identity, which is a miserable experience that can drain your pockets for years to come. Identity theft protection from LifeLock can help prevent this nightmare by monitoring your financial records and alerting you as soon as an account is set up in your name.
4. An Emergency Fund
If an event requiring emergency money on hand hasn’t happened yet, it will. Accidents, medical emergencies, job loss and other events can happen that require you to have money you didn’t expect to spend. Start a rainy day savings account and add to it little by little each month, so that you’re always prepared.
5. Retirement Savings
The earlier you start your retirement savings, the more peace of mind you’ll enjoy as you approach retirement age. The sooner you start, the less you have to put away each year, so that you don’t burden yourself with saving for retirement in the future.
Challenge yourself to invest in at least one stock before you hit 30, because you may thank yourself in the future. You don’t have to be a pro to get started. Try investing in mutual funds or EFTs, which are pre-made, diversified baskets of professionally managed securities so that the risk is minimal and the benefits are high.
Do Your Future Self a Favor
If you aren’t already in the practice of putting money away each month, start before you hit 30. Your future self will thank you, because you’ll reap the benefits of investing sooner and for a longer period of time. Plus, you can avoid financial catastrophes and major setbacks that happen when you’re not prepared for events like job loss.