How To Build Wealth In Your 30s
Anna Baluch4-minute read
PUBLISHED: September 21, 2020 | UPDATED: March 24, 2022
If you’re in the third decade of your life (AKA your 30s), you’re likely past the days of entry-level employment and may even have a spouse and children. To reduce financial stress and thrive today and in the future, there are certain money moves you should make. Let’s dive deeper into what they are.
How Can I Build Wealth In My 30s?
To build wealth in your 30s, follow these simple steps.
- Adjust Your Budget: Your life as a 30-something-year-old is likely different than it was when you were in your 20s. So it’s important to adjust your budget accordingly. If you have a mortgage, college savings and more groceries to pay for now, your budget should reflect that.
- Increase Retirement Savings: If you didn’t stash too much money (or any money) into your 401(k), Roth IRA, or other retirement savings accounts, now is the time to do so. By planning for and saving for retirement now, you’ll feel less pressure once you hit your 40s and 50s. The rule of thumb is to set aside at least 15% of your income for retirement.
- Establish An Emergency Fund: An emergency fund can come to the rescue if your car breaks down, your child needs an unexpected surgery or you lose your job. Try to save at least 3 to 6 months' worth of expenses so you have cash to use when the going gets tough.
Financial Advice For 30-Somethings
If you’d like to succeed financially in your 30s and beyond, here are some key pieces of financial advice to remember.
- Forget About The Joneses: In your 20s, you may have been more concerned with what other people have. Now that you’re older and wiser, focus on your own financial goals rather than trying to keep up with the Joneses. Also, remember that just because they have a luxury SUV and big fancy house doesn’t mean they’re not drowning in debt.
- Work With A Financial Planner: A financial planner can help you meet your short- and long-term money goals. With their guidance, you can design a financial plan that is right for your unique lifestyle and financial situation. Just like a personal trainer holds you accountable for exercising, a financial planner can hold you accountable for sticking to your financial plan.
- Understand Delayed Gratification: Delayed gratification involves sacrificing temporary pleasures to achieve long-term success. Here’s how it relates to finances in your 30s: If you drive an older car or wear used clothes, you’ll more likely be able to do things like retire early or fund your child’s college.
How To Manage Money In Your 30s
It can be tough to manage money in your 30s. After all, you may have more expenses than you did in your 20s and be unsure of how to juggle them all. Here are some money management tips to help you out.
- Set Priorities: When you know what your priorities are, it becomes much easier to manage your money. If you know your priorities are saving for your child’s college and retiring early, for example, you may not have as much disposable income as someone who prioritizes travel and entertainment.
- Pay Off Debt: It can be tough to save and invest when you owe money. For this reason, it's in your best interests to pay off your debt as soon as possible. The sooner you become debt-free, the sooner you’ll be able to allocate your money toward your goals. To pay off debt, you may need to pick up a side job or extra shifts, reduce expenses and cut spending.
- Don’t Forget About Insurance: The right insurance coverage can make or break your finances. Think about where you are in life and what type of insurance you need to protect yourself and your family. In addition to health insurance, you may need homeowner’s insurance, car insurance and life insurance.
Best Investments For 30-Somethings
It’s essential to diversify your investments in your 30s. While it’s great to invest in your retirement accounts, there are plenty of other ways you can make money. Consider these options.
- Stocks And Index Funds: Many 30-somethings are hesitant to invest in stocks because they believe they’re too risky. As long as you diversify your portfolio, you can enjoy a positive growth rate with stocks and index funds over time.
- Bonds: Bonds are kind of like loans to the government or corporations. While they offer a lower rate of return than other investments, they should be a part of your investment strategy, as they are considered “safe.”
- Real Estate: If you choose the right property and rent it out for the right amount, real estate can be another wise investment to make in your 30s.
For more valuable financial advice, check out our personal finance blog posts today.
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