Making the Most of Money in Your 30s
I have terrible news, you guys. I turned 30 last week. Actually, I turned 30 on St. Patrick’s Day. The good news is I survived. The bad news is I’m not sure how I survived. Everyone keeps telling me this is going to be the best decade of my life, but I had a pretty solid time in my 20s so I’m not sure I believe that. I celebrated my 30th birthday by pretending I was 20: I drank too much, laughed too hard, and danced like I actually had rhythm. The next morning I officially felt like I turned 80. Everything hurt and I felt the need to binge watch Golden Girls on Netflix all day.
In all seriousness, I’m excited for my 30s. I have a real vision for my career now and am far more comfortable with myself than I was just a few years ago. The older I get the less I care about things that don’t add value or happiness to my life. It’s truly liberating. As far as money goes, your 30s will really set the tone for the rest of your adult life. You’re now entering into your prime accumulation years and it’s crucial to get a plan in place.
Here’s five quick tips for making the most of money in your 30s:
1. Increase Your Earnings as Much as Possible
Your 20s were mainly spent building your resume, your skills, and marketability. Your 30s should be spent increasing your earning potential. Learn how to negotiate, ask for a raise/promotion, and maximize your benefits.
2. Get Serious About Saving
I hate to be the bearer of bad news, but you’re getting older and planning for retirement needs to be a priority in your 30s. I generally try to tell people to increase their retirement savings by 1% each year, but if you can afford to increase it faster, and by a greater amount, then by all means please do. Ideally, you should be socking away 15% of your pay into your retirement fund.
You’ll also want to fully fund your emergency savings, have an idea of what your long-term goal are, and make sure your overall financial picture is working toward those goals.
3. Diversify Your Assets
Your 30s are a great time to make sure your retirement plan and any other investments are effectively maximizing your earnings. Diversifying your investments will help you accomplish this. Diversification will also help defend your money from the inevitable drops on the roller coaster ride of the stock market. Putting all your eggs into one investment basket is not a wise strategy.
You know what else isn’t a wise decision? Ordering shots of Jameson at midnight on St. Patrick’s Day. Just so you know.
4. Make a Will
No one likes to think about their mortality, but as you enter your thirties it might be time to start thinking about a will. As you accumulate assets or start a family, it’ll be crucial to make sure the people you care about most will be taken care of after you’re gone.
People are weird when it comes to talking about and planning for death. This may be harsh, but you do know we’re all going to die, right? I know it sucks, but spend the minimal time it takes to get your ducks in a row. It won’t be as painful as you think and it’s not that expensive. You can then have peace of mind knowing you won’t leave your family high and dry should something happen to you.
5. Watch Out for “Lifestyle Creep”
As you continue to make more money in your 30s you’re likely to see your expenses creep up as well. With greater income comes greater responsibility, Spiderman. One of the worst mistakes people make in their 30s is falling victim to “lifestyle creep”. Basically, as your earnings grow, you’ll be tempted to enjoy the finer things in life. Which is fine, to a point. Don’t become so accustomed to keeping up with the Joneses that you sacrifice saving for your future.
That’s all I’ve got for you today. I’m honestly still recovering from my birthday/St. Patrick’s Day shenanigans. Once this headache goes away, I’ll be ready to conquer this new decade!