In my early 20s and 30s, I took big swings in my career and developed smart money strategies that helped maximized my income.
At 34, I have a net worth of more than $700,000 (mostly from my earnings, retirement accounts, home equity, savings and investing accounts). I am currently on track to have a net worth of $1 million by my 40th birthday.
Changing my financial routine was key to getting to where I am today — and it can help you, too. Here are seven money habits to adopt before you turn 40:
1. Save and invest at the same time
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As a recession-era graduate, I was nervous about investing my money, for fear of losing it to another market crash.
But I realized that even though keeping all my money in a savings account felt "safer," it would stifle my chances of growing wealth faster.
So I came up with a plan that would allow me to save, invest and still sleep soundly: I set up automatic transfers for each pay period — 10% of my paycheck towards my employer-sponsored 401(k), and another 10% into a high-yield savings account.
2. Don't be afraid to quit your job for a higher-paying one
Once I got into the habit of investing and saving 20% of my take-home pay, I focused on increasing my salary so that I could invest and save even more.
That meant pursuing promotions, asking for a raise, or leaving a job altogether for one that paid more or offered more opportunities for career advancement. Nearly every time I quit a job for a new one, I was able to increase my salary by at least 30%. (Of course, this isn't the right move for everyone; always make sure you take into account your situation and career goals.)
At 24, I was earning $45,000 a year, so a 10% investing rate meant putting about $4,500 into my 401(k). But five years and a few job changes later, my income was well over $150,000, and I was able to max out my 401(k) for the first time.
Budgeting and cutting back on expenses alone wouldn't have helped me reach that milestone.
3. Avoid lifestyle inflation
When you're young, every pay raise feels like an excuse to get a bigger apartment with more amenities or take more vacations.
But I was intentional about keeping my living expenses low. I set a rule to not spend more than 30% of my monthly pay on rent, which meant still having roommates even though I could afford living alone.
And when we needed to save money for our wedding, my then-fiancé and I moved into his parent's house for six months. It wasn't easy, but we were able to save $11,000 for our big day.
4. Don't create a rigid budget that you can't live up to
My first budgeting plan was very aggressive; I wanted to save as much money as possible. But I constantly ended up disappointing myself by spending on things like dining out and holiday gifts.
I ultimately realized that having a rigid budget plan wasn't doing me any good, and that I was feeling guilty for purchases that I didn't consider irresponsible at all.
So I instead focused on automating all my bill payments, including any investment and savings contributions. That way, every dollar that went into my bank account on payday was a dollar I knew I could afford to spend.
5. Build professional relationships early on in your career
As an introvert, I dread going to big conferences and networking events. I am much better at nurturing relationships one-on-one, which I believe is just as effective as trying to socialize with a ton of strangers at once.
I still keep in touch with friends, as well as current and former colleagues. I follow their work online and share it on social media often. I'll sometimes send an email or text just to check in and send good energy their way.
When I see a job posting that I think someone might enjoy, I'll forward it to them. They do the same in return, which puts me in a great position to learn about new job opportunities. It's also a good way to stay on top of salary trends in my industry and ensure that I'm getting paid a fair market rate.
6. Keep tabs on your credit report every month
A $12,000 brush with credit fraud in my early 20s sparked an obsession with checking my credit report for any fraudulent activity.
I use tools like Discover Scorecard or Credit Karma to receive potential fraud alerts. I look out for suspicious activities like accounts I don't recall opening, spelling errors in my name and repeated declined transactions.
If I find evidence of fraud, I report it immediately to the three credit bureaus and file disputes. With the rise of credit card fraud during the pandemic, it's never been more important to make this part of your financial routine.
7. Hire a financial advisor if you need help tackling big challenges
Not everyone needs a financial advisor to start building wealth. I knew how to invest, save and manage my expenses.
But what I didn't know was how to align my financial goals with my husband's, especially early on in our relationship. We had similar money habits, but very different opinions about how to spend our hard-earned money.
For example, he would have been perfectly happy foregoing our honeymoon in Italy for a brand new Tesla, and while I wanted to keep renting indefinitely, he wanted to buy a home.
Hiring a financial advisor helped us work through those conversations and keep our collective goals in mind. (And yes, we did end up buying a Tesla!)
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