Approaching the big 3-0 can be scary. At that point, there’s pretty much no getting around that you are, in fact, an adult.
For many people, hitting that milestone can also serve as a great motivator to get their lives together, particularly their financial lives.
There are books, blogs, and Twitter accounts dedicated solely to helping people cross that line. They typically tell you to get rid of debt, stop shopping so much, start investing in a 401(k), and brace yourself for wrinkles.
But in my opinion, it takes a lot more than a healthy bank account and nice skin to live a full and happy life, whether you’re 29 or 59. You also have to shed the bad habits and illusions that are holding you back.
The job market may not be what it used to be, but by age 30 no one should be toiling away at a job that leaves them stressed out and dissatisfied with life.
We were inspired by a young woman who wrote about turning her back on a lucrative job on Wall Street when years of 14-hour work days made her overweight, burnt out, and miserable.
'I'm a few months into my new job (as an asset manager for a nonprofit) and it's made my life richer. I'm making an effort to breathe, smile, eat healthier and have positive thoughts about my future,' she wrote.
'I took a pay cut of about 30% to change positions, but I don't think that I should be applauded for making the choice to accept less pay -- I don't view it as a sacrifice.'
The worst thing I did in my early 20s was ignore financial red flags when I saw them.
I didn't check my bank account for fear of how low the number would be. I left my credit report untouched for five years. And I didn't realise my first job even offered a matching 401(k) until I quit because I stuffed that folder in my desk and never looked at it.
Look: If you're broke, you might as well know it and own it. It's the only way you'll ever truly be able to do something about it.
Researchers from the San Francisco Federal Reserve found people who earn 10% less than their neighbours are 4.5% more likely to commit suicide.
The key word here: Neighbours. Where you choose to live can have a big impact on how you view yourself, not to mention your financial well-being. Don't make the move until you're prepared.
Real estate expert Scott Sheldon points out that consumers aren't ready for homeownership until their debt-to-income ratio falls below 45%:
- Calculate your DTI: Proposed mortgage payment + all minimum monthly debt obligations ÷ gross monthly income
- Calculate your maximum mortgage payment: Gross monthly income × .45 (45% DTI) − all minimum monthly debt obligations
If you've managed to build a 401(k) with your employer, now is not the time to start chipping away at all that hard-earned retirement cash.
For starters, you'll be charged a hefty fee for early withdrawal. It's also tantamount to stealing from yourself in old age.
When times are tight, trim your spending, reevaluate the purchase you intend to make, or find ways to supplement your income. You'll thank yourself later on when you see how much your savings grow.
There's a reason older people are nostalgic for their 20s. They've got a mortgage and a brood of screaming toddlers, and they miss doing whatever they pleased whenever they pleased.
Perhaps they've forgotten the first few years out of college -- that frenzied time when everyone was out for themselves, scratching, clawing their way to success?
There's such thing as healthy competition, but spending every waking moment trying to 'beat' your peers is a quick way to wind up alone and miserable. Do yourself a favour and focus on your own path, not stalking your friends' career moves on Facebook and LinkedIn.
And take heart in this fact: It's been proven that the average person doesn't get any happier after they earn $75,000 per year.
There's a saying career experts love to toss around: Dress for the job you want, not the job you have.
It makes sense. Unless you've managed to finagle your way into your dream job by age 30 -- and are secretly hated for it -- part of the battle is making others believe you can handle it.
Leave the flip-flops at home, invest in a wardrobe that shows them you're ready for responsibility -- and the heftier salary that comes with it -- and you're already on your way.
Four months ago, I walked into Bank of America to make a routine deposit and walked out with a rewards credit card limit that was more than six times my usual.
It wasn't as if I hadn't earned it, I thought. I spent the last two years dutifully paying down each of my debts, and it was high time I had something to show for it.
And then I went shopping. It started as a means of paying for furniture for my new apartment (points), then a grocery fund (points), and, when I went to visit my family for the holidays, it was the card I used for gas (points).
Before too long, I realised I'd bitten off more than I could chew. And now I'm paying for it. The point is that no matter how big your credit limit, or how fat a mortgage loan your bank offers you for a new home, that doesn't mean you have to take it. Know your limits and what you can afford. Then tell THEM how much you need.
He has a point. It costs nearly $240,000 to raise a child in the U.S. -- and that's not even counting college tuition once they leave the house.
And it's not just your finances that will suffer if you're not prepared, Len Penzo notes.
'It becomes extremely difficult to start a business, or gain the necessary experience, on-the-job training and/or education required for the type of career advancement opportunities that lead to significantly increased earning power.'
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