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The 5 Essential Financial Accounts You Need by the Time You’re 30

Where you should be keeping your money

Estimated read time: 1 minute & 52 seconds

Good morning and happy new year to our fantastic readers!

Isn’t this so exciting? A whole new year of possibilities (and chances to read Live Fast every Monday). As we dive into the new year, we thought it was the perfect time to chat about some serious personal finance matters—resolutions, anyone? 🎉

Let’s get to business: 

  • 💸The 5 Essential Financial Accounts You Need by the Time You’re 30

💸The 5 Essential Financial Accounts You Need by the Time You’re 30

Your twenties won’t last forever, and the new year is a great time to start taking control of your financial health. Here are the 5 essential accounts YOU should have in your financial toolkit by the time you hit the big 3-0🙈. We’re going to start basic and get a little more complicated. 

🏦 1. Checking Accounts: Your Financial Hub

The most basic account you should have is a checking account. This account is the hub for your financial health, but should only be used to receive paychecks, pay monthly bills bills, and for ATM withdrawals. You DON’T want to have a lot of money sitting in this account since it’s not earning you anything–leaving money on the table. Look for an account with low fees, easy access to ATMs, and, if possible, a solid mobile app. 

💰 2. High-Yield Savings Accounts: Grow your Emergency Funds

Life is unpredictable, and that’s where a high-yield savings account (HYSA) comes into play. This account offers a higher interest rate than a traditional savings account, helping your emergency fund grow faster. It's your safety net for unexpected expenses or opportunities, providing peace of mind and a financial cushion when you need it most. You should have enough money sitting in an account where you could live for the next three to six months if you were to lose your job tomorrow. Popular HYSAs include Marcus by Goldman Sachs and Capital One 360 Performance Savings.  

📈 3. IRA (Roth and Traditional): Investing in Your Future

It's never too early to start thinking about retirement. Individual Retirement Accounts (IRAs) come in two flavors—Roth and Traditional. A Roth IRA is funded with after-tax dollars, and qualified withdrawals in retirement are tax-free. On the flip side, a Traditional IRA offers potential tax deductions upfront, but you'll pay taxes when you withdraw the money. The key is to choose the one that aligns with your current and future tax situation and invest every month.

📋 4. 401(k): Employer-Sponsored Savings

Considering you’re a college student and most likely aren’t employed full-time, then this may not apply to you (yet). However, if you reach a point when an employer offers a 401(k) plan, jump on it! This is a powerful retirement savings tool. Contributions are automatically deducted from your paycheck, and many employers match a portion of your contributions. That's free money, so take advantage of it. Plus, 401(k) contributions are often tax-deductible, giving you a double financial boost.

💼 5. Traditional Brokerage Accounts: Beyond Retirement

Once you've established your emergency fund, contributed to retirement accounts, and are hungry for more investment opportunities, consider a traditional brokerage account. Unlike retirement accounts, these have no tax advantages, but they offer flexibility and accessibility. Use a brokerage account to invest in stocks, bonds, and other financial instruments to further diversify your portfolio.

Which of these accounts do you have? As you start on your New Year's resolutions, consider weaving in financial goals. Whether it's building an emergency fund, contributing more to retirement, or starting your investment journey, these accounts will be essential in setting up your money to work for you. Here's to a year of smart money moves, savvy investments, and, of course, a little bit of adventure along the way.

We’re hyped for all the content we have in store in 2024!

Until next time,

Dustin Tran

Founder & Content Lead

Disclaimer: Live Fast is dedicated to providing information and insights on personal finance and travel. However, please note that we are not financial advisors, and the content provided is for informational purposes only. Before making any financial decisions, it is essential to consult with a certified financial advisor or conduct your research to ensure that the choices you make align with your individual financial goals and circumstances. We are here to offer guidance and information, but the ultimate responsibility for your financial decisions rests with you.