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5 Financial Tips for Your 30s
Your thirties are a great time to get a handle on your finances and start investing in your future. Whether you want to buy a house, build up your retirement or spend time traveling the globe, these financial tips can help you make the most out of your money.
Finances in Your 30s: What You Should be Doing
1. Increase your emergency fund. If you started an emergency fund in your 20s, you probably followed the general rule that the fund should be about three to six months’ worth of your expenses. If your income has increased in your 30s, so should the balance in your emergency fund.
2. Invest. Your 30s are a time that many embrace the stock market* and start accruing assets for retirement. According to Time Money, you should invest most of your retirement portfolio in stocks and split the rest between a Roth IRA and traditional 401(k)*. It varies by situation, but you should try to save 15% of your income for your retirement, but you might consider saving even more if you didn’t save well during your 20s.
3. Pay off your smallest debts first? This is up for debate. If you carry multiple credit card balances, you’ll save the most money by paying off your highest-rate plastic first, right? Maybe. Two Northwestern University professors have found that people who focus on their smallest debts before tackling bigger, higher-rate loans are more successful at erasing debt. The psychological boost from eliminating a loan entirely gives you the mojo to keep paying down debt. It is truly a case-by-case basis that requires consultation with an expert.
4. Update your budget. Chances are, your financial situation is different now than it was when you were in your 20s. If you’re still sticking to the same budget you had in your 20s, it’s time to update it. Food, housing, cars, pets, kids and medical expenses will begin to evolve and require a different type of budgetary attention. A handy, free tool for this is MyMoney.
5. Get your will and insurance in order. As your savings and assets increase, you need to think about accounting for them in your will. You also need to ensure you have health insurance and disability insurance in case you’re unable to work. Finally, consider getting life insurance, particularly if you have family dependent on your income.
Get Financial Advice
For more financial advice for adults in their 30s, visit First Bank’s Financial Education Center. You can also find a First Bank branch near you, and make an appointment to discuss your finances with one of our local branch associates or FB Wealth advisors.
*This article should not be considered investment advice. Consult a certified Financial Adviser before investing in the stock market.
Investment and insurance products and services are offered through Osaic Institutions, Inc., Member FINRA/SIPC. Osaic Institutions and FB Wealth Management, a division of First Bank, are not affiliated. We do not provide tax advice. Consult your tax advisor. Investment and Insurance Products are:
| Not Guaranteed by the Bank | Not FDIC Insured | Not a Deposit |
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Sources:
Northwestern Kellogg School of Management: http://www.kellogg.northwestern.edu/news_articles/2012/snowball-approach.aspx
Washington Post: https://www.washingtonpost.com/news/get-there/wp/2015/08/25/6-money-milestones-to-hit-while-youre-in-your-30s/