“You have to be smart. The easy days are over.”
Robert Kiyosaki
I often speak to people who express regrets about the financial decisions that they made in their 20s that they wish they would have done differently. Now that they are in their 40s, 50s, and sometimes 60s, they have acquired enough knowledge to understand that those early adulthood decisions just weren’t very smart. If you are already one of those people, the good news is that it isn’t too late for you either. If you are fortunate enough to be reading this in your teens or 20s, my hope is that you gain some valuable wisdom from the next few paragraphs on the 3 financial decisions to make before 30 years of age that will help you succeed in life.
Decision #1 – Avoid Unnecessary Debt
You should try to avoid any unnecessary debt as a first step. This will set you up for a life of potential financial success unlike the majority of your neighbors and friends. I understand that you may have to fund your college education with student loans. Typically, it is one of the more necessary forms of debt, however, you should really think in terms of Return on Investment (ROI) when considering taking on any additional debt. The greatest sources of millennial debt are credit cards and student loans. Millennials have an average debt of $67,400 per individual. When you consider that the average income for this same age group is hovering around $34,000, one can assume it would take quite a bit of time to dig out of this hole. One should consider your degree and how much value it has in the marketplace before agreeing to a massive amount of student loan debt as well. Whether it’s a mortgage, car loan, or any other debt offered, always think about your ROI before signing on the dotted line.
Decision #2 – Buy Used, Not New
Yes, this will be a bit of a challenge for most millennials. Who doesn’t want to wear, drive, and use the latest and greatest of everything available? I am not saying that you will never be able to purchase the new toys, but I am saying that before 30, you should be getting a head start on building toward things that truly matter. Delayed gratification is not the most exciting topic to speak about, but if you want to be part of the top 10% of successful people it is absolutely essential. This is really about discipline and patience, and as the saying goes, “Good things come to those who wait.” You will save yourself thousands of dollars by sacrificing a few toys early in life, which will allow you to invest in your own development and skills. Your value will rise and so will your bank account. Then you can buy the latest and greatest without worrying about your next paycheck.
Decision #3 – Live on a Budget
By establishing the habit of living on a budget early in life, you will have accomplished something that only 32% of American households have done. Whether you are making $30,000 per year or $300,000 per year, a budget will always be there to help ensure you are reaching your financial goals. It is your personal assistant. An accountability partner that will never leave you. When you get weak and really want to lose all discipline and start being irresponsible with your money, it will remind you of your own commitments. There are some that may think a budget is too constricting and keeps them from being able to live a little. What it really does is show you the difference between the life you have and the life you really want. If you want to spend more while still being able to invest, you simply need to determine how much more money you would need for that to happen. Then…go make it happen.
“Live like no one else, so later you can live like no one else.”
Dave Ramsey
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