If you’re in your thirties and you want to start strengthening your finances, take decisive action. A few smart tactics and organizational habits can make a big difference.
Consolidate or Refinance Educational Debt
Having to make a hefty student loan payment month after month will substantially undercut your spending and saving power over the entirety of the loan term. If you chose an extended repayment plan and resultantly haven’t made much headway paying down educational debt many years later, you should resolve to take corrective action in your thirties.
When you estimated the cost of your education in your teens or twenties, you probably didn’t factor in all of the interest that you could wind up having to pay to lenders. In effect, the true cost of your education may be substantially greater than you anticipated. If you were optimistic, you foresaw that you’d have great financial success and paying off a loan in short order would be no problem. Unfortunately, that just wasn’t the reality that many borrowers faced after investing considerable time and resources into their education.
A student loan refinance could help you avoid paying an exorbitant amount of your income on the interest that you’ve accumulated thus far. The right refinancing option for you will depend on the amount of your outstanding obligation as well as your current monthly budget. Depending on your situation, it may be possible to maintain or lower your monthly payment amount while reducing the total length of your remaining payments. Resultantly, you could potentially save a sizable amount over time.
Stay on Top of Your Credit
Monitoring your credit score will keep you on course to boost and sustain your individual creditworthiness. Having a good score comes in handy in multiple ways, so don’t believe the myth that the only reason why you should care about your credit score is if you want to qualify for a mortgage. In fact, your credit score could be the deciding factor in whether you qualify for an apartment or even a job. In addition, insurance carriers may check your credit before they will agree to offer you coverage. Likewise, a great score may be necessary to access the best available offers on credit cards as well as financing to purchase a vehicle.
Use a credit monitoring tool that shows you your score from more than one credit reporting bureau. There may be discrepancies between them. Ideally, you’d like to be able to detect and respond to a mistake on any one of the three main bureaus’ information as soon as reasonably possible to reduce the odds that it could hurt your ability to demonstrate your creditworthiness when you need to.
Checking your score with regularity also enables you to identify what habits are helping you bring your score up. You can also see the negative effect that various ongoing habits or episodic activities are having on your score. This allows you to be more conscientious about your spending. It may also prompt you to be more consistent about making timely payments and maintaining a formidable credit utilization ratio.
Create Three Types of Savings
When you have a tight budget, you may not be putting as much money away towards savings as you like. Nevertheless, it is imperative that you make room in your monthly budget to put money away for three different types of savings:
- A retirement account to pay for basic living expenses when you stop working;
- Emergency savings to get you through an interruption in your income; and
- A rainy day fund so you will be able to afford sudden expenses.
Establishing each of these three types of savings is crucial to your overall financial well-being. Even if you can afford to allocate a small amount towards these reserves right now, a small amount is much better than none at all. Over time, small monthly deposits can really add up.
Ultimately, you have to be forward-thinking about your finances in your thirties. The steps that you take today can position you for better prosperity in your forties.
