5 Financial Basics Anyone Over 35—and Single—Must Have

The author of Growing Up and Saving Up, financial planner, Erin Baehr, says, “Once you get into your thirties, and you have the financial basics–such as an emergency fund and other necessities–settled, you can take on more risk overall.”

The twenties are mostly filled with less complication, for some people.  Saving for retirement or taking care of aging parents may not be at the top-of-mind when you’re 22.  However, you reach a point in life where you have to change and give the topic of finances priority attention, asking yourself, “Where do I start?”

Well, it’s actually easier than you think, if you keep these financial basics in mind to help build a solid future in your thirties–particularly if you’re single and have no one to help.

1.      Your Budget

Establishing a pre-set budget may sound like a no-brainer, but you would be surprised at the number of people that don’t have a budget. This goes beyond just making money and spending it.  You need to examine where your money goes, what is left over, and how you can cut expenses for future planning.

This analysis will give you the ability to make some hard choices. Your reality review should include:

• Getting out of debt by paying off high-interest credit cards and loans. The same Forbes article stated, “You may have the income now to really attack any student loans or credit card debt that may be lurking. Don’t just pay the minimums and keep those balances for decades. Get aggressive and knock out high-interest debt now, since later you’ll probably be balancing saving for your own retirement and for college if you have kids.”
• Cutting back on all of the waste. Suze Orman, the famed financial consultant, offers advice in a webcast on Oprah.com that helps on this topic: “Listen to me–stop focusing on the big picture. Macroeconomics matter, but your security depends far more on microfinance–the small choices you make with your money. Every financial worry you want to banish, and financial dream you want to achieve comes from taking tiny steps today that put you on a path toward your goals.”
• Managing your personal finances on a serious level.

2.      Your Financial Health Status

This includes the other layers that go beyond your budget and can affect each of the next steps you want to take.

You should make sure that you have the following:

• Both a checking and savings account in good standing.
• A good credit score on all of the credit reporting agencies.
• Contribute to a retirement plan, either through your employer or with a Roth IRA.

3.      Focus on ‘Value’

This is a subset of the ‘budget’ topic, but it is one that you face on a daily basis. Everything that you buy or consider purchasing should be evaluated. It doesn’t mean getting the ‘cheapest,’ but it does mean making every attempt at spending less to get the most, and can include:

• Shopping smartly and looking for discounts and deals.
• Using coupons, loyalty programs, and all avenues to get the best bang for your buck.
• Buy based on financials, not emotions, and understand that ‘waiting’ can save more in the long run.
• Throwing away some of those preexisting ideas, such as ‘only buying new’ for a car.

4.      Invest in a Home Now

You are at the perfect age to make a real estate investment, but to do it the right way, you need to use common sense on your purchase.Don’t invest in an area you can’t afford to rent.  Rent cheap and invest low in another city for cash flow. Remember that this home can be a stepping stone to the next, and you want to make sure that your payment matches your income, so that you don’t go over your head.

This decision should include:

• Having a nice amount of money for a down payment to reduce your principle.
• Being prepared for the many home operating expenses that will show up, including repairs and upgrades.

5.      Mentoring From Someone Who Has Been Successful

There are many people within your network that have achieved successful planning, and you need to tap into those relationships for advice and counseling. While their circumstances may be completely different from yours, you can streamline the information to fit your conditions. This can take your financial journey in a lot of different directions, many of which you might not have thought about:

• Making sure that you have sufficient and the right kind of life and health insurance coverage in case of an emergency.
• Looking into other potential investments, such as rental property.
• Making sure that you have your retirement savings set up, before you begin saving for college for your children.
• Establishing a Will, and choosing the right one that will protect your family and all that you have worked for.

This is a prime moment in your life, and these financial basics will pay off in ways that you might never think of for the future. Your future self will thank you.

Maryann Reid is the digital managing editor of BlackEnterprise.com and the author of several books published by St. Martin’s Press. For more, please follow her @RealAlphanista.