How To Financially Start Your Life Before You’re 30

Posted on - in Financial Goal Setting, Productivity Hacks
how to financially start your life before 30

Adolescence is the most beautiful and essential phase of our lives. One would trade anything to go back and live that most satisfying phase all over again, and again. It is THE important phase, where you will dream, plan, and struggle to make your future bright.

Though one can do an innumerable number of things before the age of thirty, the article focuses on the things you need to do as a student or graduate to have a financially independent life in the future.

10 Tips To Financially Start Your Life

Know your credit score

Less than half of the young adult population in the US has ever heard of credit score. And I bet very few of them had accessed their scores by ordering a free credit report. Do you know that one can request a free credit report once a year from three credit reporting agencies – Equifax, TransUnion, and Experian?

Credit scores are increasingly becoming the important aspect of our daily financial lives. Having a good score from the start helps you to obtain different types of loans at low-interest rates with proper repayment terms.

A high credit score helps you to save a couple of thousands on your loans as well as let you qualify for far better private loans for students and insurance premiums. Just follow one basic rule to improve your credit score is simple – pay debt on time.

Student loans can snowball into surmountable debt – don’t ignore them.

The total burden of student loan debt in the US is over $1.48 trillion as per the latest available statistics. Most of the students plan to pay off the debt as soon as they graduate, but they stumble when faced with the reality of working life post-graduation.

In addition to the loan debt, students also pay for their credit card, the kicking in of monthly payments for credit cards, mobile bills, utilities, and rent eats up more than half of the salary.  Try to clear of your student loans by limiting expenses on other activities for a while. Prepare a monthly and annual budget and stick to it.

Too young for tax planning

One need not be an expert on finance to understand taxation. There are numerous online tools that help you to understand and save on taxes. Taxes come as a disguise in blessing for those with student loan debts, where one can deduct up to $2,500 from your taxable income as student loan interest.

Living at your parents’ home

Though staying at your parents is not everyone’s cup of tea, it would help those having exuberant student loan debts with one most significant monthly expense – Rent.

Trust me when I say, if you can save on rent – DO IT!

Rent is the biggest expense that the average household pays on a monthly basis. Not to mention hidden fees such as utility bills, and that broken geyser you just can’t afford to fix.

The best part about taking the break is that you can actually look at setting yourself up properly. Perhaps even invest into a property instead of battling monthly with rent.

However, to do this – you need to put on your financial smartypants, and pay attention to mortgage rates, and all of the hidden fees involved.

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Reconsider your big-ticket purchases

Every student, while at college, dreams on spending their salary on new cars, vacations, and parties, once they graduate with a cushy job in hand. If you end up spending more than half of your monthly salary on such things, you need to reconsider your budgeting sheet. Try to avoid any big-ticket purchases until you are thirty. Material possessions cannot buy or bring happiness and moreover puts your future financial planning in a hot spot.

Refinancing student loans

Try to pay off a big chunk of your student loans early, which not only helps you to lead a financially independent life but improves your credit score in a big way. There are many startups that help you to refinance both public and private student loans based on the market condition. Even with a 0.5 percent decrease in interest rate, you may end up saving a couple of thousand dollars, which also reduces minimum monthly payments.


Alumni-backed student loans

There are online personal financing companies that consolidate student loans and cuts down the loan interest rates with backing from your college or university alumni. One can search for them online or enquire the financial aid and alumni departments at your college.

Save, save, and save money

Finally, the most overused and under-followed word when it comes to finances – SAVE money. You have heard it from parents, friends, peers, and professors, but no one cares about it until it’s too late.

The world in the future may be completely different than today – hyperinflation, wars, famine, or peace – come what may, one need to be prepared by having some sort of savings (not only money) for the future. Ever heard of saving for a rainy day story?  

Ask your future employer!

Your future employer can help you to pay off outstanding loans. One can always negotiate to make paying monthly student loans as part of the compensation package, and recruiters do consider the deal, to retain top talent. Some corporate companies do offer student loan payoff programs as well; keep an eye out for them.

Marriage and kids are expensive

Marrying and raising children is a beautiful experience in our life, but quite costly. One needs to plan very well in advance, both professionally and personally.

Do wait to start a family till you reach thirty, where one can be in a position to financially afford the expenses. Hopefully, you do have ample time upon graduation till you reach 30 to pay off a significant chunk of student loans and plan for the future.

The best way to live life is by being content with all you have – family and friends, though little savings wouldn’t hurt.

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Susan Ranford

Susan Ranford is a freelance writer who focuses on business, tech, and careers. She's experienced in career tips, business advice, and job search secrets.

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