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10 Money Habits You Should Have Locked Down Before Turning 30

We’re always quick to prioritize our physical and mental health, but overlooking financial health can get you into some sticky situations, especially as you leave your twenties and start running into actual adulthood. Sure, it may be easier to prioritize fitness regimes and a healthy diet, but you’ll come to thank yourself down the line when you have a comfortable financial cushion and money know-how if you master your financial health before turning 30.

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Since finances are not widely taught in schools or even talked about at home, it can be hard to navigate on your own if you don’t have a natural interest in financial planning – but that doesn’t mean you shouldn’t attempt to establish healthy habits and set yourself up for financial success. Here are ten money habits you should lock down in your twenties to guarantee financial health.

Create (and Stick to) a Budget

If you haven’t created a personal budget yet, you probably don’t feel that in control in terms of your financial health. Even if you do think you’re living within your means, tracking where your money is going and seeing the unnecessary expenditures can be eye-opening. Creating a budget doesn’t mean giving up your morning latte and drinks with the guys, either. It’s simply about understanding your spending and keeping it in check. There are handfuls of free apps that will help create a budget for you – all you have to do is respect your limits and stick with it. You’d be surprised how creating a budget can actually make you feel like you have more money than you did when you were spending on the fly.

Stop Living Paycheck to Paycheck

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Spending your entire paycheck within a week or two of getting paid is not financially smart – whether you’re making 40K or 400K. Quitting this bad habit will become easier once you create a budget, but it’s also important to live well within your means and not factor your entire paycheck into your budget. If this concept seems foreign or difficult to you, start by saving at least ten percent of your paycheck for a few months (this doesn’t include what you’re already putting into a savings account). Gradually increase what you’re saving until you hit twenty percent – which is the ideal amount to be saving week over week.

Stop Using Your Parents as a Fallback

Relying on your parents may seem like a convenient, easy idea at first but it can easily stunt your financial growth and harm you more in the long run while you work on gaining financial independence. According to a study from Fidelity, nearly one half of Millennials admit to accepting help from their parents after moving out. If your parents are still paying your cell phone bill or sending you a wad of cash to help cover your groceries, it may be time to consider cutting the cord (your future, financially-savvy self will thank you).

Understand Your Student Loans

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Ugh, student loans. While many financial experts agree that student loan debt is technically a “good” debt, it’s important to know where your money is going – including what you’re paying in interest – rather than blindly making payments into the void. A 2016 study by Citizens Banks shows that upwards of half of all borrowers don’t fully understand how student loans work, with sixty percent of all borrowers expecting to be paying their student loans until they’re in their forties. It’s on you to vigilantly watch your student loan and if your rates are particularly high, it could be worth taking out a line of credit with a lower rate to pay off your loans immediately and transfer payments to the line of credit.

Pay Your Bills on Time

This one may seem like a no-brainer, but a study from Aite Group shows that nearly fifty percent of Americans are late on paying their bills. Being delinquent about paying bills (no matter how big or small) can seriously harm your credit score and, what’s more, avoiding bills will incur unnecessary late fees that could easily be avoided, leaving more money in your pocket.

Get to Know Your Credit

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If you’re maxing out credit cards, making minimum payments and generally treating your credit cards like they’re free money with little consequences, stop right now. Not paying attention to your credit card balance is the easiest way to harm your credit score, which can stop you from buying a home or taking out responsible loans later in life. If you don’t already know your credit score, get it checked now. It’s better to know and work on your credit now than to avoid it and find out you have bad credit when you actually need it.

Start Thinking About Retirement

Retirement will be upon you sooner than you think – and wouldn’t you rather spend it sipping cocktails in the sun than working odd jobs to pay your rent and bills? The sooner you start contributing to a retirement fund, the better – even if it’s just $100 per month. Waiting for when you have more money to start saving might seem like a good idea but the sooner you start, the better chance you’ll have to achieve that million dollar nest egg.

Maintain an Emergency Fund

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Sure, saving up for the next big trip or luxury purchase is great – but the sort of savings account that you fill up and then deplete should not be confused for an emergency fund. According to a recent GoBankingRates survey, about 57% of Americans have less than $1,000 in savings, with 39% having no savings at all. This is a vital mistake in terms of your financial health. The lack of a rainy day fund will leave you ill-prepared for financial emergencies, like losing your job or getting into a car accident. This is one of the easiest ways to find yourself carrying unexpected debt, which is much harder to overcome than setting aside some cash every paycheck to squirrel away for the unknown.

Establish Financial Goals

Setting your own financial goals can be a great way to find motivation to save. If you visualize your life in ten, twenty or thirty years, where do you see yourself? Are you living in a big house in the country? An impressive high-rise downtown? Are you traveling every month and seeing the world with a loved one? The only way to get to where you want to be is to be financially responsible in the moment, and having those goals in mind will help you get there.

Stop Turning a Blind Eye

Above all else, if you do one thing on this list, simply stop turning a blind eye to your financial health. Maybe you’ve been lucky enough to find yourself in a position where you can afford to pay your bills, go out for drinks and take regular vacations without worrying about your finances. But not paying attention to where your money is going, whether you think you’re financially comfortable or not, will harm you later in life. Being vigilant with your finances will help you make the most out of every dollar and ensure you’re setting yourself up for long term success.

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Kaitlyn McInnis, Khareem Sudlow