A Quick Recap
Hey-O! Welcome, welcome, welcome! I’m so glad you’re here!
Thank you to Kelly and She’s A Full on Monet for having me back to continue my series on How To Build Your Financial Life, like a dream home. We’re going to be adding on your roof, so hang tight because just like George Jefferson, you are movin’ on up!
Let’s review what we’ve covered so far…
Money In Your 20’s – The Foundation
In your early adult years you should be focusing on the foundation of your house, shoring up against any threat to your hard-earned savings for years to come. Those foundation components are:
1. An Emergency Fund: Financial Industry guidelines suggest that you need to have 6 months worth of expenses in a savings account. Just in case. This makes sure that you don’t panic if you’re furloughed, get sick, can’t work, or just maybe in case of an international pandemic?
2. A Will: You might feel that you’re too young for this one, but it’s never too early to write down your wishes if, God forbid, something unexpected happens to you.
3. Disability Insurance: You’re in luck! This one is easy. Usually, your job will have this as part of their employee benefits program. I’d elect as much as you can afford on this one. Trust me. You’ll thank me later. Important note! If you grab this benefit through work, it cannot travel with you. Meaning that if you leave your job, you will have to get a new policy through your new job, or apply for a personal policy.
4. Life Insurance: This is an easy one too in that you can usually get more life insurance through your employer. I would purchase as much as you’re allowed. Because, a) probably limited or no health screening, and b) it will be inexpensive. But just like DI, if you buy through work, it will not go with you if you change jobs. You’ll need to get a new policy through your new employer or get a personal policy. Hot tip! I’d buy a personal policy as soon as you can.
Don’t have these checked off your list? No problem, chica! You can catch up and get those checked off your list ASAP, so you don’t miss a beat.
Money in Your 30’s – The Framework
In your 30’s, we are building your framework. That consists of College Education Strategies, Retirement Strategies and Tax strategies.
If I may quickly recap…
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College Strategies – Will you send your child to college? What costs should I expect? How much of total college costs do I want to pay? What can I afford to save?
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Retirement Strategies – Do you participate in your company’s 401k plan? If so, you should defer at least enough to get your employer’s whole match.
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Taxes – Even the Beatles wrote a song about how terrible the “Tax Man” is. While taxes are a part of our financial lives, unfortunately, we do need to have a plan just for them.