Finances in Your 30s
October 23, 2023 Author: Tess Downing, MBA, CFP®, Complete View Financial
When you’re in your 30s, you are still less than halfway done with your expected life span. The gap between your work life and retirement is approaching quickly, and it’s essential to be prepared for the financial growth and changes that will occur during this time in your life. Here are some ways to set yourself up for financial success during your 30s.
Automate your Savings
Savings are super significant for your future self. Savings provide security and confidence when going through changes in your life. They can also be there when you retire and want a specific lifestyle. Whatever the reason, savings are vital to being confident in your financial abilities.
So, how much should you save?
When considering retirement, to live comfortably or even richly, you should save at least 10-15% of your annual income, which guarantees that you will have a comfortable amount when retiring. The more you can save, the better, allowing your money to gather interest and grow faster. The more you invest in your future, the more things you can explore when planning retirement.
Stay on Track with Automation
What is automating your savings? Automatically transferring your savings accounts at specific periods can be implemented in several ways. The first way is to automate your bank account. Most banks let you set recurring money transfers from your regular bank account into a savings account.
Consider how much you want in an emergency fund or monthly emergency savings. Ideally, you will have six months of funds in this account, but anything you can contribute is essential.
Next, calculate how much you need for home and medical expenses and save for discretionary expenses such as vacations. Make sure to make each of these expenses a separate transfer and keep track of your goals and the amounts of money you contribute.
Become a Pro Spender
Take a look at the things you pay for on a month-to-month basis. For example, take a look at your health insurance. If you pay the same amount month after month, doing an annual plan or finding deals to get more coverage for less than a month may be cheaper.
Set your calendar for open enrollment, and do your research. When you can get a plan with better coverage for less money, take what you are saving and place it in a savings account.
Set a Budget
Budgeting takes discipline, and you must be accurate about your expenses to stay on track. With budgeting, you can still spend money on the things you want. If you can’t afford to buy what you want now, you can always budget to purchase it later.
There are tons of apps, both free and paid, that allow you to budget. One of these is “You Need a Budget'' or YNAB. This app links to your bank account and credit cards and automatically updates each budget category as you spend.
However you want to do it, it’s essential to keep track of how much you’re spending to make sure you are on a budget. Also, always pay yourself first. When making a budget, start with your savings and review your needs and wants.
Minimize your Tax Burden
When filing taxes, the money you receive from the government is not a refund; instead, the government returns what it owes you. Do your research to ensure you aren’t leaving deductions or credits out there. All in all, work with a tax professional to help you work through your taxes.
Overall
In your 30s, it’s important to prioritize savings accounts and set aside money for your future. The time to build your wealth is now. If you are ready to start, contact Complete View Financial today and let us help you reach your financial goals.
Retire Confidently. Live Better. Leave a Legacy.