Today's 30-somethings may be smarter about money than their parents were: They are not calmly expecting any large institution to take care of them, and they know they have to compete with the biggest cohort ever in a challenging job market, says Catherine Hawley, a financial adviser who has many 30-something clients. Old financial advice will not apply. Here are some fresh new money rules for the latest greatest generation.
Be strategic about your career
"Our greatest asset is our ability to earn money," says Sheryl Garrett, a fee-only financial adviser. Think carefully about what you want your future work life to look like, and invest time and money into getting there. Keep up your schooling and your skills, network via social media and professional organizations.
Open a Roth IRA
The Roth individual retirement account is one of the best tax-favored saving mechanisms around. Once you put money into a Roth, it can grow without the earnings ever being taxed if they are not withdrawn until you are 59. Over decades, that is an enormous benefit.
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Order your debts
If you are still carrying credit card debt, pay it off as quickly as possible. Do not be in such a rush to pay off student loan debt, especially if it consists of federal loans with a relatively low interest rates. Pay your monthly minimums on those low-interest loans while you build up savings and pay off other debts first.
Get the 401(k) started
You still have a lot of time for compounding of income to work in your favor, but only if you start soon. Aim to put 10 percent of your salary into your retirement.
Invest money in a state-sponsored college savings plan
Some states also offer a tax credit for a portion of those contributions. But you give up a lot for that. You give up liquidity at a time when you might also need to buy life insurance, save up for a home down payment and pay for a car seat and diapers.