If you’re in your 30s, you might be tired of hearing everyone older than you chime in about your finances. While you shouldn’t dismiss their well-meaning advice, it’s definitely time to take all money matters fully into your own hands. After all, you’re not in your 20s.
It might still seem like you have plenty of time, and in some ways, you do. But the time to start preparing for when you’ll inevitably need a cushion is now. Without proper planning, you may wind up being one in three Americans who foresees themselves working well into their 70s. That statistic is certainly scary, but it doesn’t have to apply to you.
The key is to set achievable financial goals and do what it takes to reach them, especially if you plan on retiring. Ever. Meeting your money-goals will take hard work, sacrifice, compromise, foresight, and discipline, but it’ll be worth it down the road. And you’re definitely wise enough by now to pull it off.
Here are the financial milestones you should working towards reaching in your 30s.
You may have tried to financially stabilize in your twenties, but your thirties is a more realistic time to do it. By now, you should be well aware of your financial needs, wants, tendencies, and limitations. First things first, it’s time to take the process of budgeting seriously, but more on that later.
In your thirties, you’re still preparing for a brighter financial future, but with much more awareness than you’ve ever had before. If you’re not already doing so, start tracking your income and expenses and always move towards gaining more financial control. Notice where you should save and where you can spend while paying special attention to the areas you still need more work.
If nothing else, be sure you’re not spending more than you’re earning every month. Now is the time to move towards saving money and away from any financial strains.
Establishing Good Credit
The better your credit, the better impact it can have in all other financial areas of your life. That’s why it’s a particularly money-smart goal in our thirties. The state of your credit will determine the interest rate on everything from a much-needed new car to refinancing your student loans. In other words, good credit will mean you save more money than you spend in the long run.
With that said, perfect credit doesn’t need to be the goal. Better credit should be. Financial experts say you should aim for a score of 740 or more, but don’t get discouraged if you’re already in your thirties and not where you want to be. There are all sorts of ways to improve your credit score. And there’s no time like the present to start.
Paying Off Your Student Loans
This is a major milestone that often feels out of reach. The good news is, it doesn’t have to be. But you need to take the process of paying off your student loans seriously sooner rather than later. By 40, college will be around 20 years behind most of us. So let’s start putting the past in the past and deal with all past dues related to college.
If your original payment plan didn’t work for you, that’s okay. You don’t have to stick with the schedule you started with. Look into refinancing your student loan debt. Nine times out of time, it’ll lead to considerable monthly savings, no matter your initial interest rate. And remember, a higher credit score can help you achieve a better interest rate.
Saying Goodbye to That Credit Card
No matter their age, high-interest credit card payments can be one of the most financially destabilizing aspects of anyone’s life. It remains one of the biggest financial hurdles in the way of way too many twenty, thirty, and even forty-somethings getting ahead or moving financially forward. So don’t hold yourself back with credit card debt, especially at a time in your life that should be about progress.
If you’re paying down several high-interest cards simultaneously, look into personal finance companies like SoFi. Companies like this can help you pin down a plan for getting out of debt and staying out long term. There are also tons of no-cost debt calculators out there. So do some online research to really see where your overall debt is at and what it will take to get to a better place.
Investing in Your Retirement
Saving for retirement might seem like something still on the horizon. But by making it a goal in your thirties, you’ll be thanking yourself when the time comes to retire. Look at the big picture. What do you want your retirement goal to be? From there, decide how much you should be investing into your retirement monthly. The sooner you start, the better off you’ll be. You may even exceed the number you initially set.
If you’re in your thirties, it’s worth looking into your employer’s 401k matching programs to see what’s available. Matching it will only work in your favor. Also, consider asset allocation. Diversification will be important. When assessing all sources of retirement income, aside from your aforementioned 401K, you should start looking into Roth IRA’s and Roth 401K’s.
Building an Emergency Fund
It’s easy to get used to living paycheck to paycheck, but it’s in your best interest to start preparing for the unexpected. You never know what will happen in life and being better prepared for life’s storms is a good goal to set in your 30s. An emergency fund will be there for you if and when unexpected medical bills arise, you suddenly lose your job, or a flash flood damages your home.
Set your emergency fund goal to be six months’ worth of income. And always, always resist the urge to dip into it.
Nailing Down a Budget
No matter how you financially operated before, now’s the time to set a monthly budget and stick to it at all costs. If the thought overwhelms you, look into easy-to-use budgeting apps available online. They’ll consistently be there to help you track your spending.
The goal is to become more financially disciplined and routined in ways that will benefit you. Because it’s only in your best interest, consider nailing down a budget a fun challenge. Once you rise to the occasion, all other financial goals will become that much easier.
Discussing Money With a Partner
It’s always beneficial to have someone else there to hold us accountable. Whether you’re currently in a relationship or not, you should work towards being able to have open and honest discussions about money. It’ll help you arrive at and maintain financial clarity. If you do have a significant other, this will help you have a better understanding of where each other are at and where you both hope to be collectively, and as individuals. Having a conversation about money will allow you to build a structure for your finances.
Life Insurance and Income Protection
Does your employer offer life insurance? If so, you should be taking advantage of it.
In your 20s, this may not have crossed your mind. You were probably the epitome of health. Not to mention, it may not have felt like the financially wisest decision when you were at your least financially stable and rarely ill. But again, you want to prepare for the unexpected. And now’s the time to do it.
Look into your employer’s disability insurance plan. Plans like this not only give you time off for medical emergencies, but it will also guarantee your job will still be there when you get back. Also, your salary will be secured. At this time in your life, you should consider your income your biggest asset. And so, it’s important that you do what it takes to protect it.
Budgeting Disposable Income
Saving money takes practice, self-discipline, and patience, especially if you have an active social life and friends who still want to go out more often than not.
Just because you’re working hard to be more responsible doesn’t mean you should stop having fun. In fact, you should reward yourself for all the hard work you’re doing by treating yourself once in a while. Balance is important, after all. And saving should not feel like a restrictive punishment. It should feel purposeful. And when you’re out with friends, it’ll feel much more satisfying if you’re not remotely stressed about the money you’re spending.
With that in mind, you should set aside money specifically as disposable income. This way, you’ll know exactly what you have to spend for fun because you’ve budgeted it.
Becoming a Homeowner
Buying a home in your 30s may sound like the most daunting goal on the list, but it’s not as hard as you might think. And having the other milestones met will help significantly. No matter you’re living situation, it’s an incredibly smart investment for anyone in their 30s to consider.
To seriously move towards this goal, start setting aside the money you’ve been saving via other financial goals (saved money from refinancing student debt, paying off credit cards, etc) for your down payment. This is another area that having better credit can go a very long way. So stay consistent with your credit building.
To learn more about buying your first home without too much hassle, here are some helpful tips to get started.