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separate bank account that is easily accessible and use it only in an emergency such as job loss or uncovered medical expenses.
5. Don't worry about paying off student loans early—Student loan debt usually has lower interest rates than credit card debt. Having low payments on this low-rate debt frees up money to apply to your high interest credit card debt, so you’ll come out ahead in the long run.
Your 30s and 40s
By the time you’re in your 30s, chances are you’ve settled in a career, although you may change jobs a number of times before you retire. You’re likely to have a family of your own, with all the accompanying expenses—music lessons, sports teams, family vacations, saving for col- lege, buying a new home, and so on.
Throughout your 30s and 40s, you should regularly evaluate your progress towards achieving the medium- and long-term financial goals you set in your 20s. Now’s the time to make adjustments to your spending, budgeting, and saving as needed to ensure you stay the course. Naturally there will be many demands on your income from many directions, but it’s vital that you build your long-term investments despite these immediate demands.
1. Saving for your kids’ college education—If you’re saving for your kids’ college education, the earlier you start the less you’ll have to save because of the power of compound interest. But remember, as stated earlier, it’s better to take care of your retirement needs first so you are then in a position to help your kids if needed. If your retirement isn’t secure, you may be looking to your kids for support when they’re trying to manage their own lives and futures.
2. Saving for retirement—Hopefully by the time you’re in your 30s, you’re well-grounded in your employer’s 401(k) or other retirement plan. Many experts advise putting 10% of your income towards your
The Different Stages of Life and their Financial Demands