Living with credit

Smart money moves for the under-30 set: Are they realistic?

Kelly Dilworth

I’m turning 30 in a few weeks and, according to some personal finance experts, I’ve only completed a fraction of the financial moves I’m supposed to have made by now.

I’m not the only one. According to a recent survey by, 69 percent of millennials aged 18 to 29 still don’t have a dime saved up for retirement. And a February 2014 study published by the TIAA-CREF Institute found that many college-educated millennials are still struggling to repay their loans.

Nearly half of all millennials with student loan debt, for example, are worried about defaulting on their payments. Meanwhile, 18 percent have missed at least one credit card bill in the past year and 47 percent admitted to carrying a balance on their cards. “It is becoming increasingly apparent that the financial position of Gen-Yers is more fragile than expected,” write study authors Carlo de Bassa Scheresberg, Annamaria Lusardi and Paul J. Yakoboski in the study.

Smart money moves for the under-30 set: Are they realistic?

That’s especially true these days when the job market is just barely recovering and wages are still stagnant. According to MarketWatch, average wages for all age groups, adjusted for inflation, have actually dipped since the Great Recession.

It’s no wonder then that so many millennials are nearing 30 in a panic. If you google the financial milestones you’re “supposed” to hit by the time your 20s are over, you’ll find a whole host of advice about where you should be by the time your 30th birthday rolls around. But unless you’re highly paid or nearly debt free, many of those goals will likely feel out-of-reach.

According to J.P. Morgan Funds, for example, I should have saved up to $20,000 for retirement by now. I’m not even close. Fidelity Investments is similarly ambitious. It says that by the time I’m 35, I should have at least a year’s worth of income stashed away in my 401(k). At nearly 30, I barely have more than a few months saved up.

Many experts also recommend that you pay off all your credit cards and from now on become a “transactor” who pays off 100 percent of every bill rather than a “revolver” who carries over balances from month to month. That can be tough to do if your budget is stretched thin by student loans, rent, car payments and other personal expenses.

After years of wrestling with my own credit card balances, I’ve finally managed to pay off all my cards. But as I reach other life milestones — like having a baby — my life is becoming increasingly expensive, making it a lot harder to keep those balances near zero.

More realistic planning
The good news is that even if you’re feeling crunched, there are steps you can take now that don’t require a sudden financial windfall. For example, personal finance experts frequently recommend that almost-30-somethings should create a will as well as start shopping around for life insurance. That way, you can lock in a lower rate while you’re still young and ensure your dependents are taken care of should something happen.

With a baby on the way, my husband and I have been meaning to do these things for months. But with so many other items on our to-do lists, it’s been easy to procrastinate. 

In addition, experts recommend that you set up some kind of retirement and emergency savings fund long before your 30th birthday — even if you can’t afford to put much in them. An emergency savings fund may be especially important now when your funds are limited since it can help save you from high-interest debt if you lose your job or your car breaks down.

Now is also the time to seriously reevaluate your financial habits. For example, if your credit card balances are too high because you’re overspending at happy hour, you may want to rethink how much you’re charging. After all, the last thing you want by the time you reach 30 is a credit score that’s been trashed by frivolousness. 

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  • Rhen @ CME Capital

    Good read. I’ve started investing at 28. Now what I need to control now is my spending habit.