5 Questions You Should Be Able to Answer About Money By 35 - Fairygodboss

5 Questions You Should Be Able to Answer About Money By 35 - Fairygodboss Keeping on top of personal finances is hard, perhaps especially in the first decade of your career. However, by the time youre 35, a long-term plan for saving, investing, purchasing, and retirement should be starting to come into focus.Here are a few questions you should be able to answer by the time youre 351. How much money will I have when I retire?By the time youre 35, you should have a solid retirement plan with at least a few years worth of investing and saving under your belt. Because compound interest is your friend when it comes to investing, each year you wait to get started can have huge long-term effects on the nest egg youll have when you retire.How much youll have really depends on how youve set up your investment portfolio. Using a combination of investment types, such as a company 401(k) and a Roth IRA, can help ensure youre shuffling the mix between high-risk and low-risk investment. However, u ntil around 40, you should aim toward more high-risk, high-return investments and slowly shift as you get older.No matter how your portfolio is set up, you should be aiming to invest in your retirement plan every year. Timothy G. Wideman, D.B.A. PHR Emeritus, and a retired Associate Professor of Management Human Resources at Doane University, gives the following advice In reservierung to fund an early retirement, folks should strive to invest 20% of their incomes in their combined retirement accounts. That may sound daunting, but sticking to that 20% can have big payoffs in the long run.2. Am I prepared for a major emergency?Theres no way to predict what life has in store for us (although that would be nice). With this in mind, its important to have some emergency funds in case something unexpected happens. According to investment group Vanguard, fruchtwein experts believe you should have enough money in your emergency fund to cover at least 3 to 6 months worth of living expenses. Although that probably sounds like a lot of money, and hopefully you never need it, if you ever do youll be glad you have it.3. Am I paying more for anything than I need to be?Most of us have recurring expenses we dont think about often. Because theyre not actively on our radargert most of the time, it can be easy to forget that these expenses can really add up over time. In your mid-30s (and all ages, really), you should be aware of everything that drains a little from each months budget. If you arent sure exactly what youre paying for, or if you cant specify the exact amount your subscriptions and services are costing you, run a quick audit of your monthly bills. Some expenses may be unnecessary (for example, you may find you want to unsubscribe from magazines you dont read often), and some may be necessary but available for a lower price (for example, many cable bills can be negotiated down). Either way, trimming down on any extra recurring costs can really add up over time.4. Wh at big expenses are on my horizon?At 35, many people are at different places in their lives. Some may be parents or looking to become parents, while others may be looking to move abroad or take a big career step. However, no matter what your situation, there are probably some big expenses just ahead. Trying to buy a house? Looking to add a baby to the mix? Both of these are huge financial commitments. Will you be ready for them? Only you can answer that, but preparing in advance for your big upcoming expenses can help you make sure youre ready when the right time comes.5. Is money preventing me from reaching one or more of my goals?Money can be many things a safety net, an enabler, a status symbol. But perhaps its most important use is as a tool to achieve the things we want to achieve and avoid falling into situations we dont want out of necessity. Beth Haiken, an EVP at Method Communications, says, Money isnt stuff money is autonomy...Its what enables you to make your own decisi ons and follow your own goals, whether thats a trip you want to take or a job you DONT want to take.If you keep track of how much youre spending and maximize your savings, youll be prepared to use money however you need to when that need arises. Whether its the flexibility to quit a toxic job or the freedom to take the trip of a lifetime, the possibilities provided by keeping on top of your financial situation are well worth the work.