7 Things to Do With Your Personal Finances Before 30

Even if your retirement is decades away, you’ll want to start financing it now if you expect to enjoy it. It’s easy to put off things like funding a 401(k) account when you’ve got bills, student loans, and other daily expenses to fund first. No matter your situation, there are steps you can start taking to set yourself up for a financially sound future. Here are seven things financial advisors recommend doing with your money before you turn 30. (Note: It’s never too late to do these things! But as with most savings-related things, the earlier, the better.)

Goal setting is important in all areas of life where you’re looking to succeed or improve, and it’s especially helpful where money is concerned. Sherri Anderson, a director and region executive director at Bank of America, says your 20s should be a time of reflecting on both short- and long-term financial goals. Do you want to own a home by your 30s, for example? Now’s the time to “build out an actionable plan to begin achieving these goals, including how much you want to save or invest,” says Anderson. 

If you don’t have much to put in an account right now, don’t let that stop you from getting started in the first place. “Whether it’s a few thousand dollars or a few hundred dollars, it’s important to start with what you have as soon as you can so you can continue building over the years,” says Anderson.

There’s no avoiding it: If you want to be better with your money, you need to know how much is coming in and how much is going out. “While tedious, creating a budget can better help you identify where your money is going and how much you have available to put into savings or investing funds,” says Anderson. 

To get started, Anderson says to identify your basic expenses (your rent or car payment, for example) and your variable expenses (like groceries and dining out). By finding out exactly what you’re spending, you can find out how much is left over to put into savings or an investment account. 

“Even if you are starting small, you are still in a better position to build for your future,” she says.

It might seem too hard to increase your 401(k) contribution at this point in your career. But the power of compound interest — that’s the interest earned on interest — is a beautiful thing, and you should wield it to your full advantage. 

The average employer match for employee 401(k) contributions is between four and six percent of your salary, according to financial platform Ocho. This means that if you put in between four and six percent yourself, you’ll be effectively contributing between eight and 12 percent of your salary. 

Can an employee match starting in your 20s make you a millionaire by retirement? Yes, it can. When it comes to meeting whatever contribution your employer matches, the sooner, the better, says Anderson — even if it’s only 10 bucks each payday. 

Whether you use a credit monitoring app like Credit Karma or download your annual credit report, it pays to keep an eye on your credit score — especially if you plan to purchase a home in the near(ish) future. 

“Your credit score is your financial reputation, and keeping it in good standing is essential,” says Taylor Kovar, CFP and CEO of TheMoneyCouple.com and Kovar Wealth Management in Lufkin, Texas. He adds that paying your bills on time, every time, and being responsible with your credit usage can go a long way. “A strong credit score opens doors to favorable interest rates and better opportunities down the line,” he says.

Perhaps it was verboten in your household when you were growing up to talk frankly about finances. Don’t carry on that tradition on your own, says Kovar. “If you’re in a relationship, open and honest money conversations are crucial,” he says. “Being transparent about financial expectations and working together on shared goals builds trust and alignment.”

Anderson recommends a savings account (or two) for a cash reserve and an emergency fund. “Emergency funds can act as a financial cushion for unforeseen events,” she says, noting to aim for anywhere between three months to a year’s worth of living expenses. 

The average interest rate for the regular savings account at your bank is 0.53 percent, according to Bankrate. The rate for some high-yield online savings accounts, on the other hand, are well above 4 percent, so choosing which one to open is a no-brainer.

Whenever possible, use your cash reserve first and save your emergency fund for true emergencies, Anderson says.

No worries if you didn’t major in finance or math in college: Now’s the perfect time to pursue a self-taught course of study in personal finance for a more prosperous future.

“The more you know about personal finance, the better equipped you’ll be to make good financial decisions,” says Kovar. Whether it’s a book, a podcast, or an online workshop, tune in. “Think of this as assembling a financial tool box; each tool you add empowers you to build your financial future.”

There’s a Chinese proverb that people like to share and reshare in the finance world: “The best time to plant a tree was 20 years ago. The second best time is now.” Now replace “plant a tree” with “invest your money.” Whether you’re on the cusp of 30 or well past it, these financial strategies have no expiration date.

“No matter how old you are when you start thinking seriously about saving and investing, it’s never too late to begin,” says Anderson.