In today’s society, it’s easy to get complacent when it comes to your finances. Today, PF Pro contributor, Melissa Hoffman takes a look at five money moves you should make in your 30’s. Don’t put these off until it’s too late, take action now!
While your twenties may have been a time of massive change (and perhaps some massive debt, either in student loans or credit cards), your thirties are the sweet spot: young enough to still have tons of earning potential, and old enough to have made enough mistakes and (hopefully) be more prepared for the life expenses coming your way.
Some things in your 30s will stay constant: building up your emergency savings and making sure you can survive an unexpected job loss or major car repair, saving up for retirement and increasing your contribution rate. However, your 30s bring additional challenges in the form of a spouse who may rely on you, kids you may want (or are currently raising), and buying a house (or maintaining the one you have). With your 30s brings great responsibility, but also great power to harness your maximum potential.
Money Move #1: Focus on your career
By now, you probably have a few years of experience under your belt in your chosen field. Now is the time to evaluate your career track: is this a career you’ll want to stick with for another 20-25 years? If yes, ramp up your exposure to the company. Volunteer for more visible roles, sign up for public speaking classes, and document all of your achievements. If there is a position you want, aggressively pursue it by reading up on the job description and getting some of that experience under your belt. When the position opens up, you’ll already have the exposure and experience to be a seamless fit.
If you don’t like your job, take the skills you’ve mastered over the last few years and shop them around to new companies. Dust off your resume and update it to reflect your new skills, then send it to sectors or employers you’ve heard about and are interested in working for. Don’t feel tied to one location, either. If you don’t yet own a home, open up your search nationwide, or narrow it down to a few different cities you like. Now is your time to maximize your earning potential, so don’t hesitate to apply for many different jobs.
Money Move #2: Ask for a raise
Check salaries on Glassdoor.com to see if you’re being paid equitably. While some companies are more transparent about pay, some are not, which is where Glassdoor.com comes in handy. If you’re friends with coworkers, you could broach the topic of pay, but tread carefully. If you think you’re underpaid compared to Glassdoor’s analysis or your own sleuthing, take a look at your accomplishments and draft up a game plan to ask for a raise.
An employee moving up the ladder who takes on additional work is an incredible asset to companies, and in your 30s, you have enough experience to ask for more. You’re no longer entry-level, so you have much more negotiating power than you may have had in your 20s.
Money Move #3: Shore up your income by side hustling or establishing passive income
If you’ve been reading Your PF Pro for a while, you’ll know that Harry is a big proponent of side hustling to bring in extra money. Whether yours is to pay off debts or bring in extra income, your 30s are a good time to establish some form of extra income generation.
Get started by evaluating your strengths: are you good at Excel and managing databases? Offer your services on Elance.com or network with people who work in your sector. Want a more passive income stream? Consider investing in dividend-paying funds or, if you have the money, consider buying a home to rent out. Being a landlord isn’t necessarily an easy way to make money, but with the right renters, you could have a steady stream of income that will last for decades.
Money Move #4: Get Your Affairs in Order
In your 30s, you may own a house, have a child, or are planning on settling down and expanding your family. Have you looked at your insurance lately? If you’ve had any major life changes, it’s time to review your insurance policy. If you have a spouse and kid(s), it’s imperative you have a life insurance policy set up to take care of them in case of your death. Even if you are not the primary breadwinner, it’s still important to have a life insurance policy to help out with expenses if you pass away. While no one wants to think of that, it’s important to have a policy in place, because the alternative (no money for your family) is worse.
In addition to making sure you have the right insurance (including home, auto, and adequate health insurance for your family), you’ll want to get your estate in order. I know, it sounds so far off: your “estate.” But your estate means a lot of things: if the worst were to happen, who do you want to take care of your kids? If you have your own business, have you set up a trust to make sure your assets are protected? At the very least, sit down with a lawyer and draft up a will. If you have anything of value, you’ll want it protected and bequeathed to people you choose, and not have it tied up in probate forever.
Money Move #5: Become a Finance Ninja
If you still have debt, especially credit card debt, work your butt off to eliminate it in your 30s. By erasing as much debt as you can in your 30s, you’ll free up your 40s to invest the maximum in your retirement accounts. If you don’t have any debt by your 30s (congratulations!), take advantage of company benefits. If your employer matches 401(k) contributions, contribute the maximum to take advantage of the match. Enrolled in a High Deductible Health Plan with a Health Savings Account? Invest in that for a double benefit: reduce your taxable income and save for health related expenses in retirement.
Continue with your current investment strategy, but seek to max out at least one investment account, whether it’s your 401(k), Roth IRA, or traditional IRA. If you haven’t bought a house, consider buying one, particularly if you’re in a city and job you love. It’s a major investment, with its own major expenses, but it’s another way to build equity. A house also includes the intangibles, including having a place to call home and raise your family.
While 30 may not be the new 20, that’s not necessarily a bad thing. A lot of us going into our 30s graduated during the recession of 2008 and are finally starting to get our on feet. Your 30s should be the decade to really get going on life: establishing a solid career or your own business, having a family (whatever your definition of family is – pets included!), and buying a house (or being a traveling nomad). By following these money moves, you’ll enter your 4th decade on this planet already ahead of the game!
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What money moves are you making to enter your 30s successfully, or what money moves did you make in your 30s? Do you agree with this list, or are there money moves you would add?
Joseph Hogue says
Very true! I agree with all five points mentioned. It would be better for people in their mid 20s to start doing taking these into consideration especially points 1, 4 and 5. It’s a good idea to start setting realistic financial and budgeting goals early.
I definitely agree – starting all of these money moves would definitely be a good idea if you can in your 20s! However, some people (even me!) don’t quiiiiite have their stuff all together in their 20s, so I’m hoping 30s is better (and more settled) than the 20s for some readers. For example, I’m not married and don’t have anyone who depends on me, so having great life insurance isn’t a priority right now. By 30, 35, I expect that to change – and then life insurance will be a bigger priority! Thank you for commenting 🙂
I started taking seriously my web design business, after losing my job, when I was exactly 30. It’s been rough sometimes, but worth the effort. I have full freedom to organize my time, manage my clients and deadlines. And I earn a good living as well.
I’m really glad pursuing your own business has worked out for you! Sometimes things that seem terrible at the time are a blessing in disguise, because now you’re doing something you’re good at and you enjoy – and making a good living from it too! Thanks for sharing your story!
Emma Healey | Money Can Buy Me Happiness says
#4 – Get your affairs in order
I absolutely have to write my will this year! Especially since I now have a child and my lawyer has offered to prepare it for free once I send them all the specifics. Thanks for the reminder!
No problem, Emma! You have a lawyer who will do it for free?! What?! You definitely should take advantage of that – and maybe give me your lawyer’s name… just kidding 🙂 Glad this was helpful for you!
The point about diversifying revenue sources resonates with me, as the financial responsibilities of hitting your thirties tend to increase. That is especially true for people who have children, or spouses who are not working full time. I am working to diversify my incomes substantially, by the time I hit my mid thirties.
That’s so true, Marie! A lot of your finances can become more complicated when you hit your 30s, as you can be expanding your family (through marriage, birth, adoption) and your lifestyle (maybe buying a car, house, etc.) It’s great you’re diversifying your income now – sounds like you will be more set for your 30s!
Thomas @ i need money ASAP! says
Great post! Totally agree with #1. Now that I’m a bit more senior at my company I get to be involved in the annual performance reviews. The first thing we look at is ambition. If a person is “hungry” for more then there’s a high likelihood that they’ll be given a chance that other more qualified candidates might not get. Usually that’s in the form of a promotion or challenging project. Don’t be afraid to share your ambition, just don’t be cocky, be humble and ask for advice on how to make your dreams/goals happen.
That is such great advice, Thomas! Thank you so much for sharing. I’ve only been on a few performance reviews, but I enjoy them a lot. You really get to see who is invested in the company and is “hungry” for more, just like you said! Thanks so much for the insight 🙂