Personal Finance Advice You Can Take To The Bank!
Wise financial planning in your 30s can set the foundation for long-term wealth and security.
This decade is crucial as you’re likely advancing your career, earning more, and navigating significant life changes like homeownership or starting a family. It’s also a time when financial pitfalls, which I will discuss later, can derail reaching your money goals.
To help you on your financial journey, I will explain 12 actionable steps for managing money wisely as a young adult. Most importantly, you will know how to put yourself on firm financial ground when you are done.
Let’s get moving!
Financial Planning In Your 30s
Disclosure: At no cost to you, I may get commissions for purchases made through links in this post.
1. Assess Your Current Money State
Get your financial facts together.
First, calculate your net worth. Net worth is the value of what you own minus what you owe. Many people, like you and me, start with nothing. However, knowing your net worth is essential to improving it.
Net worth = What you own (assets) minus what you owe (debts)
Next, determine how much money you spend and where you spend it. If you aren’t sure, that’s okay. We will cover that topic shortly.
To sum up, get familiar with your current financial situation.
2. Make A Commitment To Financial Literacy
Start building your finance knowledge base. Learning about money, personal finance, and investing is critical for managing your financial plans in the future.
First, pick a book or try this course and set a goal to study it from beginning to end. You will be glad you did.
Second, find a money mentor. Trusted friends or family members are good choices. Talking to someone about finances is a great way to learn and expand your horizons. Having a mentor means you won’t need to pay for a financial advisor.
At the same time, think for yourself and make your own choices. After all, it’s your money. Make it, save it, and invest it wisely!
3. Create A Budget And Monitor It Monthly
Set a monthly budget and do your best to stick to it to understand how much money you are spending and where.
Break your spending down into categories such as:
- Housing (rent or mortgage)
- Utilities
- Groceries
- Transportation
- Entertainment
- Travel
At the end of each month, compare your spending to your budget for each category. Reflect on your progress and make adjustments as needed.
Don’t beat yourself up if you overspend. Learn from it and strive to do better in the future.
Dig Deeper – How To Create a Pay Yourself First Budget
4. Invest In Yourself And Advance Your Career
Figure out what you are good at. Then, put in the time and effort to become great at whatever it is.
The best investment you can make is in yourself.
Take advantage of every training opportunity. For example, what options does your employer offer? The best thing about learning on the job and employer-sponsored training is that it is free.
However, more formal courses and continuing education are beneficial, too.
Most importantly, leverage your training and experience to maximize your earnings. Consider the following options to increase your income:
- Ask for a raise
- Earn a promotion
- Work more if you are paid hourly
- Change employers
Identifying ways to make more money is essential to financial planning in your 30s.
Related – Best Investments for Beginners
5. Allocate Money To What You Value In Life
Think carefully about what you value in life. Your values may change over time, but that’s okay.
What you love may include travel, movies, home renovations, dining out, wine, sporting events, or something else.
What you value is unique to you.
So, whatever you value, allocate money in your budget to what you love. Then, reduce or eliminate expenses everywhere else.
6. Avoid Lifestyle Inflation
Spending more is tempting as you age, make more money, and grow your wealth.
However, I urge you to be cautious.
Strive to live within your means. Save any additional money you make from your higher income.
Okay. We are making progress, yet there is plenty more to come. Before you continue, please PIN IT:
7. Top Off Your Emergency Fund
Emergency expenses are the enemy of your finances in your 30s. Thus, assign any extra money from your monthly budget to emergency savings.
Most financial experts recommend having 3-6 months of living expenses readily available.
Review your budget’s essential monthly expenses to determine your optimal emergency fund balance. Put the extra money in a high-interest-bearing savings or money market account.
Finally, reserve your emergency fund for unexpected and vital expenses like:
- Medical bills
- Auto repairs
- Home maintenance
8. Monitor Your Credit Score
Look up your credit score and monitor it regularly.
A good credit score can mean a difference in getting a mortgage, being able to use a credit card, or getting a job offer from a prospective employer.
So be sure to protect and improve your credit score.
By applying all of today’s financial planning tips in your 30s, your credit score should improve automatically.
Must read – Why Some People Are Always Broke
9. Make A Plan To Become Debt Free
Identify and itemize your debts if you haven’t already as part of calculating your net worth. Use any excess cash identified from your monthly budgeting process to reduce your non-mortgage debt.
Most people owe money for:
- Credit cards
- Student loans
- Auto loans
- Personal loans
Pay off your credit cards first. Then, target any other loans, starting with the debt with the highest interest rate. Making timely payments will also improve your credit score.
10. Invest For Long-Term Growth And Income
Suppose you have money left over each month at this point. If so, congratulations, you are flawlessly executing your financial plans.
However, your work is not done. Effective financial planning in your 30s requires an investment strategy.
Your first three investing goals should be:
1. Maximize contributions to your employer’s 401(k) or 403(b) plan.
2. Fully fund an individual retirement account (IRA).
3. Make additional investments outside of your retirement accounts.
Focus your investments on stocks or low-cost exchange-traded funds (ETFs) invested in the broad stock market for long-term capital growth.
Consider investments that pay income outside your retirement accounts, like bonds and dividend stocks. Investing for income is an excellent way to supplement your earnings if you lose your job, desire to work part-time, or want to retire early.
Great resource – Investing may seem complicated, but it doesn’t have to be. For example, I learned a ton from the Financial Freedom Dividend Investing Course offered by Simply Investing.
11. Budget For Some Fun
As you make progress with your finances, be sure to reward yourself. and plan for some fun. If saving money and sticking to a budget becomes a burden, you won’t stay with it.
What’s fun is different for everyone. So, I will let you figure that out for yourself.
However, don’t forget to monitor your budget and live within your means.
Helpful Ideas – 10 Tips for Living Below Your Means
12. Review, Reflect, Adapt, And Improve
Review the results of your financial planning efforts at least annually. Reassess your money state and actions, and adjust to achieve your financial goals.
Smart Money Moves To Make In Your 30s – Wrap-Up.
Your 30s are a time to build solid financial habits that will benefit you for decades.
By staying disciplined, continuously learning, and making intentional choices, you can create a future of financial freedom and stability. Remember, it’s not about making perfect decisions but progressing toward your goals.
Most importantly, your steps today will shape your financial well-being tomorrow. Good luck with your finances, and before you go, PIN IT:
Author Bio: Tom Scott founded the consulting and coaching firm Dividends Diversify, LLC. He leverages his expertise and decades of experience in goal setting, relocation assistance, and investing for long-term wealth to help clients reach their full potential.
Financial Planning Tips For Your 30s Explained
.