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Establishing a solid financial foundation is important when you’re young, but it’s not always at the top of most twenty-somethings’ priority list. Everything is fine as long as you have enough money to cover your rent, a few bills, and some weekend fun. Aside from the fact that you’re older (and hopefully wiser), crossing that threshold creates a sense of urgency to get serious about your money.

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For the first time in your adult life, you may believe you can get your finances in order. And you can, but it all begins with a plan. What’s the good news? Making a money plan in your 30s doesn’t have to be a difficult process — in fact, it’s probably the easiest.

Determine Your Direction

The most common reason people in their 30s struggle financially is because they engage in the wrong financial behaviors. To put it another way, they aren’t entirely sure what they want their lives to look like, so they end up mirroring the (bad) financial habits of those around them to maintain an equal status among their peers. But here’s the thing: many of your peers in their 30s are also trying to figure it out! That is why, before you budget a single penny or plan to pay off your first debt, you must clarify your goals. Consider the life you want to live in 5 to 10 years and reverse engineer the steps you need to take now to get there. Once you’ve decided on a course of action, examine your income and spending habits to see if they are in line with your objectives.

Make a budget.

The Budget. For some, it’s the road map to financial success; for others, it’s the dreaded ‘B-word. Even if you fall into the latter category, there’s no denying that having a budget is an important step in making informed financial decisions.

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This is one of the wise decisions you should make in your 30s. When you create a budget, you can prioritize pressing issues.

Create an Emergency Fund

You probably have a lot more responsibility now than you did just a few years ago. A spouse, children, mortgage, cars, and so on are just a few of the many things you must care for and protect. While an emergency fund will not relieve you of responsibility, it will help you sleep better at night knowing that if you lose your job, you will be able to pay your bills until you find another source of income. Most financial experts recommend having enough money in an emergency fund to cover three to six months of expenses. While this may appear to be a difficult hurdle to overcome, especially if you’re just getting started, setting up automatic withdrawals from your checking account to your savings account can help jumpstart the process and keep things running on autopilot as you build up your balance.

Pay off your debts

If you’re like most people your age, you accumulated a significant amount of debt during your twenties. Now that you’re in your 30s and have a lot more on the line, your priority should be to pay off that debt as soon as possible. The “Snowball Method” is one of the most popular ways to accomplish this. This is a debt repayment process that begins with the smallest outstanding debt and progresses to the largest.

Increase your retirement contribution.

You should have started contributing to your retirement plan (or similar offering) by the time you reach your 30s, but now is the time to ramp things up.

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To begin, you should be contributing enough to receive the full employer match (if offered by your company) — otherwise, you’re wasting (virtually) free money. Next, develop the habit of increasing your contributions regularly, either annually when you receive a bonus or raise, or at any other time (i.e., every six months). Many employers allow you to increase the percentage of your contributions on a predetermined basis. This is an excellent option for those who may forget to increase contributions or for those who are undecided.

Create a Trust

As depressing as it may be to consider, our time on Earth is limited. We all know this deep down, but it is rarely enough to motivate us to take action on planning for after we are gone. Instead, many of us believe that estate planning is something that only the elderly should be concerned about. The truth is that every adult with a spouse, child, home, or business needs to have trust in place. This agreement is critical to your life planning and well-being because it specifies how your assets will be handled in the event of an unexpected event. An estate planning attorney (in conjunction with the advice of a financial planner) can provide expert advice on how a trust can help you.

One of the other money traps to avoid in your 30s is lifestyle inflation. Simply because others are purchasing a new car or a larger home does not imply that you should increase your expenses and do the same. Your thirties can be an exciting time in your life, with significant life changes, and these personal finance tips for millennials can help you prepare for a prosperous financial future.

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This article was first published on 27th June 2022


Grace Christos Is a content creator with a proven track record of success in content marketing, online reputation management, sales strategy, and so much more.

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