9 Life-Changing Financial Tips Everyone Should Know Before 30

If you don’t tell your money where to go, you’ll be asking where your money went.

1. Business owners make the most money in the long run…. That’s probably not surprising, but it comes with a high price. Usually, most business owners start off very slow. It takes years and years to build a truly profitable business, but once they get over that hump, the sky is the limit in regards to income. Keep the faith.
2. People that work in sales have high earning potential… Medical sales, stock brokers, insurance brokers… pretty much any position that has the ability to earn commissions or bonuses can grow into a lucrative career over time. Even if a salesperson frequently switches jobs, typically they change to higher paying opportunities with greater payout potential as their careers mature.

The number one rule of budgeting: pay yourself first.

3. Just because someone makes a lot of money, doesn’t mean they keep a lot of money. Let’s face the facts, if you make over $1 million per year but you spend over $1 million a year, then you are broke. I’m talking about everyday bills as well as expensive cars, designer clothes, jewelry, fancy dinners — there’s plenty of ways to give your money away. The number one rule of budgeting: pay yourself first. Just because you’re making a lot of money now doesn’t mean you always will. Automatically transfer the amount you want to save each pay period into to a separate account, and the needless stuff will weed itself out.
4. Inheritance matters… Those blessed enough to be given a financial head start have an incredible advantage in making down payments on houses, starting businesses, or maxing out retirement contributions more quickly. Not coincidentally, this same group of people tend to have parents who have educated them on personal finance, and tend to be significantly more prepared to build wealth than the average person. This should be the ultimate goal for our children, but we must start taking steps now.

“If you don’t tell your money where to go, you’ll be asking where your money went.”

5. People that don’t track their spending often end up in financial strain… Perhaps counter intuitively, those with higher bank account balances are usually looking at every little expense and challenging every fee on their account. They know precisely where every dollar goes. On the other side of the coin, those who do not have much money are typically less aware of how much they spend and are being charged. Keep an eye on your expenses!
6. 401k investing is critical… All W-2 employees should definitely look into their company’s 401k program. Company’s often incentivize participation in 401k plans by annually matching some percentage of your contributions. People who max out their 401k accounts and IRAs have a much more realistic chance of retiring comfortably than those who don’t. This, over time, can be a game changer even for someone who does not have a relatively high income. Free money for doing right thing!
7. Having a good credit score is invaluable… People with good credit have the ability to build wealth via increased purchasing power. Loans are much more expensive for folks with bad credit. Having a good credit score is akin to being a straight-A student in high school or having a great relationship with the Principal. You can get away with more and have a lot more freedom than the average student when you’ve built a rapport. A bad credit score will always slow you down when trying to build wealth because banks won’t be nearly as willing to loan you the money you need.

If you’re going to take a risk with credit, use it to try and make more money.

8. Debt can make or break you…. Having a great credit score to borrow funds for cheap is one thing, but knowing how to properly manage the funds is another. In reality, debt should only be used to build wealth or gain some type of monetary return. Property, businesses, and personal education are all great examples of good debt. Sadly though, most people abuse debt by overspending with credit cards on things that offer no return that they typically can’t even afford in the first place. If you’re going to take a risk with credit, use it to try and make more money.
   Note: You can keep easy track of your score with apps like Credit Karma and Mint.
9. Real Estate investing can be a great wealth builder… Owning a home is great, however owning an investment property is even better. Multiple streams of income are they key to building wealth. People that own investment properties are able to diversify their income and make mailbox money. On top of the opportunity for increased income, savvy investors can buy and flip homes in order to potentially see even larger returns. The choice is yours!
   Financial health is a building block of life and should be taken just as seriously as your physical health. I hope this will help you in any way possible!

— Trey Parker, MBA