Your 20s and 30s can be an exciting time!  College is behind you, you’re working full time, learning on-the-job skills, and the thought has probably crossed your mind that it might be time to learn some financial skills as well.

In your 20s, you are beginning to build a life on your own, in your own place, and become financially independent from your parents. What should your primary focus be? Here are some steps to follow today on your journey to building a firm financial foundation tomorrow:

• Establish a Budget: You have probably heard this one a thousand times by now, from just about everyone you know. But one more time never hurts. Having a budget will help you identify income and expenses, and better monitor your cash flow. A simple spreadsheet will show where your money goes, allowing you to direct funds to necessities and needs vs. impulsive purchases. It will also allow you plan ahead, and put a little aside in an emergency fund for unexpected circumstances.
• Repay Debts on a Monthly Basis: Nothing racks up more debt than interest charges you have to pay on obligations you already have. If you have student loans from school, or large credit card payments not fulfilled, now is a good time to set up a payment plan. Even monthly payments that reduce the debt will help you make significant progress. Take advantage of balance transfer deals when you can to significantly lower an interest rate. To avoid late charges, pay minimums on all your loans, but devote extra payment to the highest interest rate loan. Be careful taking on new debt before you put a big dent in what you already owe. You need to monitor your credit rating.
• Contribute to Workplace Retirement Plans: Now that you have a full time position, see if your employer offers a 401(k) or other retirement plan, take advantage of it, even if it is just a small portion of your paycheck. If there is no workplace plan, open an IRA for yourself and contribute every paycheck. Compounding will snowball over the years and give you a head start on retirement saving. (Compounding is the process in which an asset’s earnings, from either capital gains or interest, are reinvested to generate additional earnings over time).
• Get Health Insurance: You may develop health issues even at a young age; making sure you are covered by health insurance may save you from drowning in medical debt. Check with your employer to see what the company offers as far as health benefits go, and if the plan does not fit your needs, visit the health care marketplace for options.

For people in their 30s, your goals will be changing as you move ahead in your career, start a family, or look to buy your first home. By now you should have established good financial habits to build on (see above). Here are some suggestions to help you continue to plan for the future, and make your goals a reality:

• Understand Your Net Worth: After you begin to formulate your goals, it is important to understand what your current financial snapshot looks like. Add up your income and assets and subtract your liabilities and fixed expenses. Now is the time to continue saving and growing your money to help meet those goals.
• Increase Savings as Wages Increase: When you receive a promotion, or transition to a higher paying job, make sure that you are increasing how much money you save. Use a portion of your new wages to continue to reduce bad debt which will help grow your net worth. Good debt tends to involve lower interest rates and is typically used to reach a major goal or milestone, a mortgage is an example of good debt. Bad debt carries higher interest rates and is often used to finance purchases that don’t provide much value back to you, high credit card balances are an example of bad debt.
• Consider an Investment Strategy: By now you have begun saving for retirement through a workplace 401(k) or an IRA. Perhaps it is time to start putting money into an investment account to save for big, long-term goals. Like a retirement account, an investment account will help your money grow over time. Now is a good time to learn investing basics and fundamentals to make sure that you’re putting away the right amount in the right places based on your goals. TFG Financial Advisors can help you

• Establish an “Important Financial Papers” file: Proper record keeping is very important as your family grows and your investments do too. Pick a safe location for a digital file containing important records, accessible in case of emergency. Be sure in include: Wills, Trusts, Estate Plans, Power of Attorney, Life insurance, Retirement Accounts, Real Estate Deeds, Investment and Bank Statements, 529 Plans. etc. Remember to review documents and beneficiaries regularly, especially after any milestones or important life changing events.

Reach Out to Us: Financial planning is about prioritizing what is most important to you and making a plan to get there. No matter what your age, it’s essential to review your current financial situation, including your savings, investments, insurance coverage, and assets as well as any outstanding debts. After you’ve gathered all your financial details, a TFG Financial Advisors professional can help pinpoint areas that require attention, and help you create a plan in order for you to reach your goals.