A Smart Financial Strategy for 30-Somethings

Turning thirty inaugurates one of life’s most significant decades. The carefree, post-collegiate lifestyle has ended, and career transitions can accompany major events such as the purchase of a home, marriage, or the birth of children.

Regardless of your plans, the choices you make in your thirties will have a huge impact on your future. A few money strategies stand as hallmarks of the well-ordered life; and if you’re still in your twenties, you can do even more to get ahead.

Have a Budget

Your 30s are the time to create the financial habits that serve you moving forward. Before you can set goals and make long-term plans, you must learn to work strategically with your money. Facility with a budget — both the know-how to create and discipline to stick with one — will serve you well in this regard.

“The first thing people need to do is have a clear system for cash-flow and budgeting,” says Benjamin S. Offit, CFPR and partner with Clear Path Advisory. “You need to organize what expenses you are committed to, then allot a certain amount of money each week to your personal life.”

Discipline and a systematic approach are key to the management of a budget, and many twenty-somethings find it useful to live with a weekly allowance. As a thirty-year-old who knows how to live within your means, you can begin to chart a path towards your larger financial goals.

Save! Save! Save!

Your thirties represent a prime era to maximize contributions to savings accounts. Many advisors emphasize retirement, and rightfully so; though it seems far away, the money you invest in your thirties will have decades to accrue interest.

“While in your thirties, strive to have a long-term vision and look towards your retirement,” says Matthew Coan of Casavvy.com. “Put as much money toward retirement as possible, and use the power of compound interest.”

Many other investment opportunities, from 529 college funds to stocks and bonds, can be maximized through this strategy. At the same time, you’ll want to create and nurture an emergency fund for life’s inevitable hardships. Many people in their thirties fail to anticipate the pitfalls of unemployment or ill health, and the effort spent to prepare against disaster can prove invaluable.

Check Things Off the List

As middle age approaches, you’ll want to make sure that you’ve taken care of certain indispensable financial concerns. For example, though no one likes to think about death, your thirties are the decade in which you should write your first simple and living wills. You’ll also want to review your insurance coverage. Saul Simon of Simon Financial Group explains:

“If you die without a simple will, your loved ones will be put in a difficult legal position. A living will can help them make medical decisions if you become seriously ill. Also, review your coverage for auto, life and disability insurance. Do you have enough for yourself and family in case of emergency?”

It’s easy to procrastinate about these things in your twenties, when issues such as end-of-life decisions seem far away. As an adult in his or her thirties, however, you should begin to prepare for every possible scenario.

No Better Time Than Your 20s

If this all sounds daunting, don’t worry: it’s never too late to plan for the future, and the earlier you get started, the more benefits you’ll derive as you age. A person’s twenties represent the ideal time to get a jumpstart on healthy financial strategies. After all, the longer you have to practice, the more likely your best intentions become permanent habits.

“Financial habits are similar to other habits, like eating healthy and working out,” says Robert Johnson, president and CEO of the American College of Financial Services. “They may be difficult to establish, but once you have done so, they become almost second-nature.”

Time is a precious asset and provides a tremendous advantage to the young person who uses it well. If you plant the seeds for the good life in your twenties and thirties, you can reap the rewards of foresight in your forties, fifties, sixties and beyond. 

Written on August 25, 2016

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