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When you are in your 30’s, there are financial matters that you need to prioritize. This is a time in your life, where you are likely out of college, having a family or have purchased or thinking of purchasing a home. You need to set yourself up for an excellent financial future by keeping the list below a priority:
1. Start saving for retirement :
At this age, you have more time for wealth accumulation until you retire within you 60’s. You need to start saving the minimum amount in your 401K, to get the company’s match, if they offer it. If you want to save more, then contribute until you max out and then consider opening a Roth-IRA, or IRA. I would even go as far as understanding what your medical cost will be at retirement. Contributing to a Health Savings Account would help offset some cost’s not only in your retirement but throughout your working life.
2. Plan on Buying a Home:
Purchasing a home is a must during this time if you want to make sure to pay it off by the time you retire. I mean who wants a mortgage during retirement. As you pay off your loan, you will build equity in value or if you are looking to sell it for cash as an investment down the road. You can get your credit score for FREE online at creditkarma.com and then focus on what you need to do in order to improve your credit to purchase a home!
3. Save 3-6 months of emergency money:
Now that you are older, you need to develop a savings plan to make sure that you have 3-6 months of emergency money saved. Things happen, tires get flatten, things break, you need a backup plan. It’s good to automate your savings each month and create a budget so you can reach your goals faster!
4. Have the right insurance coverage:
Life insurance, auto insurance, home insurance, are all essential to making sure that you reduce your liability. Also, this is the best time to start purchasing insurance because we all know the older you get the higher it may be to cover yourself. Make sure to connect with an insurance agent that can help you get the right coverage for you and your family.
5. Start saving for your children’s education:
If you want to eventually pay for your children’s education, a good option for college is to start a Coverdell Education Savings account. They will allow you make tax free contributions, which will offer tax free investment growth and tax-free withdrawals when the funds are spent on qualified education expenses. Learn more at this link: Coverdell Savings
Overall, in your thirties, you are in good position to set yourself up for financial success! This is a good time to start thinking of the long-term and making smart plans to improve your financial life! If you need help, please speak with a financial planner that can help you get where you need to go! It’s probably better to work with a fee-only advisor than a commission based advisor, because fee-only advisors don’t try to sell you financial products, but do what’s in the best for you and your family financially. You can read upon those different types of advisors at this link: Fee Based vs Commission Based
. If you are interested in creating a budget, read my post about 4 Tips to Create a Budget you can stick to!
or if you are having trouble with your spending here is a post about 10 tips to get your spending under control.