The modern thirty-year old has very different goals than the generation before. These days, 30-somethings are facing a different landscape in their professional and personal lives; thanks to significant shifts in culture and attitude, determining financial strategies can be a bit of an experiment in trial and error. If you’re looking for ways to make the most of your personal wealth and set yourself up for success in the years to come, be sure to follow these important tips.
Cut Back on Wasteful Spending
It’s time to hunker down and pare down your budget. No more frivolous spending; your thirties is the time to begin cutting down unnecessary spending that you may have found yourself partaking in during your twenties. Are you still focused on spending weekends out on the town with friends, or are you looking to make a down payment on a house? As your dreams and desires change, so too should your budget. If you’ve gotten married or plan to, your finances will likely change immensely. Perhaps you’re thinking of having children in the near future; will you need to move to a bigger space? You will likely find you must cut spending in certain areas to afford others. Depending on your priorities, your budget could take a much different shape than it did even a year ago. Use an app like Mint.com to help you stay on top of your spending.
Focus On Retirement Accounts
Save now, play later. Putting money towards retirement is important, and funneling at least 10 percent of your income into an IRA or company sponsored retirement plan can help you immensely when you hit the golden years. This is more important than ever in today’s climate. Social Security is at risk of running out before most 30-somethings hit retirement age, and if nothing changes in coming decades, benefits will shrink. Once all the money paid into the system is gone, retirees will find themselves in a world of hurt without the proper savings in place.
Ramp Up Your Emergency Savings
One savings account isn’t enough. What about the times when life throws curveballs? Chances are, you’ve encountered your fair share in the 30-plus years of your life, and they don’t stop as we get older. From medical bills to car repairs, unemployment to natural disasters, there’s plenty of life events that can require extra funding. Use your thirties to ramp up your emergency savings funds. While most financial experts recommend having up to 6 months of living expenses set aside, you may find it wise to save even more, especially if you have children. Tax time can be a fantastic opportunity to boost your savings. If you’re the person normally trying to figure out where your refund is so you can go on a shopping spree, try switching it up and putting at least half of your refund into your savings.
Pay Off Your Debts
If you have lingering debts, take every step you can to get them settled. Focus on high interest debts first. It’s important to avoid paying extra on top of your account balance, and tackling those debts that charge the most over time can prove to be a beneficial strategy. Some find it helpful to transfer their debt to a balance transfer credit card that offers 0% APR for the first year. This can help you move all of your debts to a singular account, and make it simpler to begin paying off what you owe. Have student loans bogged you down for years? It’s time to dig yourself out from under the weight of your degree. Make efforts to funnel as much as you can towards debt accounts. If you owe money to the IRS, this is even more important. It’s essential that you determine how to pay off a tax deficiency before any other account to ensure the government doesn’t take action in the form of wage garnishment or in severe cases, repossessing your belongings.
Thrive in your thirties with these essential financial tips and set yourself up for success for the decades ahead.