January 17, 2020


Personal Finance

Money Moves You Need to Make Before Turning 30

Money Moves You Need to Make Before Turning 30


Your late teens and 20s will no doubt be some of the best times of your life. It’s the perfect time for you to have some fun – travel the world with friends, explore new hobbies, and learn something new!

Your 20s are for fun, yes. But these years will also provide you with the opportunity to lay out a strong financial framework for the rest of your life. With the many opportunities out there, I wanted to write down 5 money moves that you need to make before turning 30.

1. Start by organizing.

This is a very important first step. Although at times tedious, it’s crucial that you take a long hard look at your entire financial situation. How much (if any) money have you stored away over the years? What debts do you currently have? What interest are you paying on those debts? What is your monthly income and how are you spending that money? It is very important to analyze your spending habits. How much money are you spending on eating out? How about digital subscriptions? Look at how you spend your money and then make a plan for how you will improve those habits.

2. Get saving.

Parents and educators have probably preached this to you since youth, but I am here to remind you that they’re not wrong. Whether it be savings account or an investment account, this is the perfect time for you to start putting money away. My recommendation: sign-up for automatic payroll deductions. Each time you are paid, a predetermined dollar amount or percentage will be taken out of your paycheck and deposited into a savings account. This will take away the temptation of spending those dollars that you should really be saving. Out of sight out of mind…

3. Start building your credit.

Credit is a word that gets thrown around at high school and college but for many young people it probably doesn’t mean much. That is until they try to purchase their first car or home. When that time comes, they will quickly find out that credit is very important. If you have not already, it’s time to start building your own credit. Search around for a low interest credit card (or a credit card that offers benefits appealing to your lifestyle) and start using it for your daily purchases. Be careful to not overuse your available credit. Credit is hard to build and easy to damage. Start with small purchases and make sure to pay off your balance each month. By doing this you will slowly start to build strong credit.

4. Invest into a retirement plan.

In your 20s retirement feels about as far away as the stars, but that doesn’t mean saving for retirement is any less important. In fact, the early years of your retirement are the most important. Compound interest can do you wonders… here is an example:  If two people put the same amount of money away each year ($5,000), earn the same return on their investments (6 percent annually) and stop saving upon retirement at the same age (67), one will end up with nearly twice as much money just by starting at age 22 instead of 32. Put another way: The investor who started saving 10 years earlier would have about $500,000 more at retirement. It’s that simple with compound interest.

5. Increase your income.

Your 20s will provide you with many opportunities to increase your income. Take advantage of these opportunities because they may not come your way ever again. Whether it be advancing your role within your current organization, or starting a side hustle (Uber, Online Buy/Sell, etc.), these are valuable years that you can use in order to increase your income. Invest in yourself – your career, your health, your relationships. I can’t guarantee much, but I can guarantee that you will never regret investing into yourself.

No matter what, please enjoy your 20s – they may be some of the best years of your life. Just make sure to put a penny or two away so that someday you can enjoy your 60s and 70s as well…

Joe Bauer close up

Joe Bauer

Office: 651.643.8494
Email: joe.bauer@deerwoodbank.com

Joe Bauer is the Metro Market President for Deerwood Bank. He is based in Mendota Heights and has been with Deerwood since 2007. Joe graduated from St. Cloud State University with a bachelor’s degree in Economics. He then went on to obtain his MBA in Finance and Strategic Management from the Carlson School of Management at the University of Minnesota. Joe is actively involved in the sports that his children participate in. In his spare time, Joe enjoys working out and taking walks with his wife, Jeannie, and their dog, Rex.

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