5 money questions you should be able to answer by 35

By the time you’re 35, a long-term plan for saving money, investing, purchasing, and retirement should be starting to come into focus.

Keeping on top of personal finances is hard, perhaps especially in the first decade of your career. However, by the time you’re 35, a long-term plan for saving, investing, purchasing, and retirement should be starting to come into focus.

Here are a few questions you should be able to answer by the time you’re 35:

1. How much money will I have when I retire?

By the time you’re 35, you should have a solid retirement plan with at least a few years’ worth of investing and saving under your belt. Because compound interest is your friend when it comes to investing, each year you wait to get started can have huge long-term effects on the nest egg you’ll have when you retire.

How much you’ll have really depends on how you’ve set up your investment portfolio. Using a combination of investment types, such as a company 401(k) and a Roth IRA, can help ensure you’re shuffling the mix between high-risk and low-risk investment. However, until around 40, you should aim toward more high-risk, high-return investments and slowly shift as you get older.

No matter how your portfolio is set up, you should be aiming to invest in your retirement plan every year. Timothy G. Wideman, D.B.A. PHR Emeritus, and a retired Associate Professor of Management & Human Resources at Doane University, gives the following advice: “In order to fund an ‘early’ retirement, folks should strive to invest 20% of their incomes in their combined retirement accounts.” That may sound daunting, but sticking to that 20% can have big payoffs in the long run.

2. Am I prepared for a major emergency?

There’s no way to predict what life has in store for us (although that would be nice!). With this in mind, it’s important to have some emergency funds in case something unexpected happens. According to investment group Vanguard, “Most experts believe you should have enough money in your emergency fund to cover at least 3 to 6 months’ worth of living expenses.” Although that probably sounds like a lot of money, and hopefully you never need it, if you ever do you’ll be glad you have it.

3. Am I paying more for anything than I need to be?

Most of us have recurring expenses we don’t think about often. Because they’re not actively on our radar most of the time, it can be easy to forget that these expenses can really add up over time. In your mid-30s (and all ages, really), you should be aware of everything that drains a little from each month’s budget. If you aren’t sure exactly what you’re paying for, or if you can’t specify the exact amount your subscriptions and services are costing you, run a quick audit of your monthly bills. Some expenses may be unnecessary (for example, you may find you want to unsubscribe from magazines you don’t read often), and some may be necessary but available for a lower price (for example, many cable bills can be negotiated down). Either way, trimming down on any extra recurring costs can really add up over time.

4. What big expenses are on my horizon?

At 35, many people are at different places in their lives. Some may be parents or looking to become parents, while others may be looking to move abroad or take a big career step. However, no matter what your situation, there are probably some big expenses just ahead. Trying to buy a house? Looking to add a baby to the mix? Both of these are huge financial commitments. Will you be ready for them? Only you can answer that, but preparing in advance for your big upcoming expenses can help you make sure you’re ready when the right time comes.

5. Is money preventing me from reaching one or more of my goals?

Money can be many things: a safety net, an enabler, a status symbol. But perhaps its most important use is as a tool to achieve the things we want to achieve — and avoid falling into situations we don’t want out of necessity. Beth Haiken, an EVP at Method Communications, says, “Money isn’t stuff — money is autonomy…It’s what enables you to make your own decisions and follow your own goals, whether that’s a trip you want to take or a job you DON’T want to take.”

If you keep track of how much you’re spending and maximize your savings, you’ll be prepared to use money however you need to when that need arises. Whether it’s the flexibility to quit a toxic job or the freedom to take the trip of a lifetime, the possibilities provided by keeping on top of your financial situation are well worth the work.

A version of this post previously appeared on Fairygodboss, the largest career community that helps women get the inside scoop on pay, corporate culture, benefits, and work flexibility. Founded in 2015, Fairygodboss offers company ratings, job listings, discussion boards, and career advice.