By JLP | April 2, 2009
Saw this list this morning on MSN. Pretty good list. I think we have accomplished all of these, which is a good thing because I’m in the final months of my 30s!!!!!!
Here’s the list along with my thoughts on each point. You can read the original article here:
1. Pay off your nonmortgage debt.
I totally, 100% agree with this. You should have no debt except for a mortgage and possibly a (reasonable) car note.
2. Kick the debt cycle altogether.
I like what the article’s author said here so I’ll just repost it: What good is it to pay off your loans only to take out another one and rack up more debt? An easy way to save for big-ticket items –and avoid going back into debt — is to put money you would have used for monthly debt payments and interest charges into a savings account. For instance, after you make that final $300-a-month student-loan payment, keep making an equal payment to yourself. After one year, you’ll have $3,600 saved. (See “Your 5-minute guide to budgeting” for help allocating your money.)
This is something my wife and I have started doing. We had a 401(k) loan out once and when it paid off, I upped our contribution to close what the loan payment was. The cool thing is that I was actually able to increase our contribution by MORE than the loan payment because 401(k) contributions are payed before tax while 401(k) loan repayments are not. I only wish we would have done this when we payed off our Rendezvous nearly two years ago. We would have nearly $12,000 in a car fund by now had I saved our car note after the car was paid off.
I also use our high-yield savings account (well, it “used” to be high-yield…it’s not so much right now) and pay our property tax into that account so that we have the money available when the tax comes due.
3. Get serious about retirement.
The 30s is when we saw amazing growth in our 401(k) balance. Unfortunately, the market has taken back much of those gains but over the long-run things should be better.
4. Diversify your investments.
We are diversified amoung equities. We don’t have any bonds in our portfolio yet.
5. Continue to learn.
This is one area where I have been lax. I have considered going back to get an accounting degree and becoming a CPA. That’s the degree I probably should have gotten in the first place.
I do at least continue to read books so I’m not completely forsaking educational endeavors.
6. Protect your assets.
As our budget has allowed, I have upped our insurance coverages where I thought it was important. I also upped our deductibles—something that can be done if you have an emergency fund—in order to keep the costs down.
7. Live simply.
I’m thankful that my wife and I live simply. I was looking at our budget the other day and noticed that our mortgage payment, property taxes, and homeowner’s insurance added together are less than 17% of our net income. Yes, we live in an affordable area and make decent money, which makes a huge difference. Lots of people don’t have that advantage. That said, we still made the decision to buy a house that we could afford. It WAS NOT our dreamhouse and it took us EIGHT YEARS before we did any major renovations to the house. And, we STILL don’t have our master suite the way we would like it. Bottom line: unless you make lots of money, you can’t have everything all at once. There’s nothing wrong with waiting until you can afford something.
8. Make your will known.
This is an area my wife and I are going to work on this year. We haven’t done enough in this area.
9. Get a life . . . insurance policy.
Check with your employer to see if they offer life insurance. BE AWARE that if you leave your employer (or are fired), you will most likely lose your life insurance. That’s why it is good to also have an insurance policy that’s not connected to a job. I’d suggest a nice long-term term policy.
10. Be charitable.
My wife and I tithe but could also do better in giving. We do little things like give to the United Way and a couple of religious charities that we agree with but that’s about it. I also am too stingy with my time.
I thought this was a good list. I feel a little better at what my wife and I accomplished in our 30s.