CHARLOTTE, NC – Be smart with your money! We spoke with financial expert and host of “The Table” on YouTube, Anthony ONeal, about four financial tips you need to know before you turn 30 — but they can still help you even after. Additionally, you can check out Derek’s full, unedited interview below.
STAT: According to a new GObankingrates survey, 80% of Americans said a lack of financial literacy led to debt, overpriced loans and a reluctance to invest their money.
STAT: The survey also showed that a quarter of Americans did not feel comfortable with basic financial skills until the age of 30.
Learn to budget
- If you don’t tell your money where to go, you’ll wonder where it went. A budget is telling your money what to do.
- I recommend doing a zero-based monthly budget.
- List your income for the month minus your monthly expenses. This should be zero. You put every dollar to work.
- When you put this in front of you, you’ll start to see areas where you can reduce your expenses. Then you can use this money to achieve your financial goals.
- Many people avoid budgeting because they feel it limits their freedom. But your budget is simply about putting your financial goals into practice. How you spend your money should reflect what matters to you.
Manage your debt
- Our culture teaches us that debt is a tool. But with the majority of Americans living paycheck to paycheck, that logic breaks down.
- If you have debt, prioritize repayments. Debt will make you pay for your past instead of focusing on your future.
- Especially with rising interest rates, it becomes costly to stay in debt.
- I recommend working the debt snowball to pay off your debt. This is where you list your debts, from smallest to largest, regardless of the interest rate.
- Attack the smallest as hard as you can, make minimum payouts on the rest. Then roll that up to the next smaller debt.
- You will create a momentum that is hard to stop.
- Set up an automatic draft on paydays to transfer money to your savings account. This way you are not even tempted to spend that money.
- I recommend having a separate savings account so that you are not tempted to withdraw money from it.
- If you don’t have an emergency fund, a good rule of thumb is to save 3-6 months of expenses.
- We know emergencies happen, and if you don’t have savings, you’ll be tempted to go into debt, creating a vicious circle.
- Put your savings on autopilot and prioritize them.
Invest in your future
STAT: According to the GOBankingrates survey, between 40-50% of every age bracket, including those aged 18-65+, said a lack of financial knowledge caused them to avoid investing.
- I recommend investing 15% of your income in retirement.
- If you’re trying to get out of debt, it competes with your financial goals for your future. Focus on deleveraging, so you’re free to invest.
- Once you’ve gotten rid of your debt, hitting that 15% is much more achievable.
- I recommend working with a financial advisor to help you with your investments when you’re ready.