Financial Goals For Your 30s: Get Started Today With These Ideas
October 30, 2019 Author: Tess Downing, MBA, CFP®, Complete View Financial
If you’re 35, you’re statistically likely to live another 43 to 47 years. You’re less than halfway through life and retirement is closer than it appears.
Ask yourself this: what does it mean to be financially successful? Does it mean having enough to live comfortably during retirement? Does it mean being able to do what you please now?
How you answer that question will affect how you set your financial goals. Building wealth is all about mindset. If you don’t believe you can become wealthy, you will never act.
But once you act, you will find a particular kind of freedom found nowhere else. Setting financial goals for your 30s is something you will never regret. Here are the best ways to set yourself on the path to financial success while you’re still young.
1. Automate Your Savings
What do savings mean for “future you”?
Savings mean security. They mean being able to pass money down to your family. They mean being able to retire comfortably or even richly.
How much should you save? Let’s break this down.
If you want to live comfortably or even richly after retirement, you need to gather as much as you feel comfortable saving each month. You should be saving at least 10% to 15% of your income a year.
If you can live comfortably and save more, do it. The more you invest in your future, the more options you will have when it comes to retirement planning.
Once you have calculated how much you will save, keep yourself on track by automating your savings.
Automation Will Keep You On Track
There is more than one way to automate your savings. First, automate your bank account.
Most banks allow you to set a recurring money transfer from your regular banking account to your savings account.
While banks will place a limit on how many times you can transfer money in a month, that number is high. If you’re budgeting, take advantage of this feature.
Figure out how much you want to gather for emergency savings each month. These are funds you will not touch unless you have an emergency or lose your job. Ideally, you should save six months of funds but even if you’re saving only three months, you’re doing better than most of the population.
Couples with no children at 34 years of age on average only have $4,727 in savings. For most, that’s probably only a month or two of savings, if that.
Next, calculate how much you need to save for medical expenses and home expenses. And lastly, save for discretionary expenses like vacations.
Make each of these expenses a separate transfer and keep track of how much you’ve contributed. If you have a budget app use that. Otherwise, simply using an online spreadsheet will suffice.
2. Become a Pro Spender
Cutting a deal and spending wisely happens at the macro and micro levels of your financial life.
Even if you haven’t scrutinized your purchases in the past, it’s never too late. A great example is your health insurance.
It might be easier to just pay the same every month year after year. But could you get more coverage for what you’re paying? Could you spend less each month?
Mark your calendar for open enrollment and set aside an afternoon to research. And when you do find that cheaper plan with better coverage, take what you save and place it in savings.
Do this with whatever deal you can make. Use the opportunity to build so that you can live an incredible life. You do not have to cut back on the things you love to build wealth.
3. Set a Budget
Budgeting takes discipline. This is why most people don’t. They pay dearly for their financial sins later in life.
The amazing thing about a budget is how much freedom you glean. You are free to spend on the particular things you want.
If you can’t afford it now, budget to buy it later. Several free and paid apps exist to help you do this.
YNAB or You Need a Budget is a paid app that links directly to your bank account and credit cards. It will automatically update each budget category as you spend so you don’t have to keep track of everything manually.
We recommend you keep track. Each time you make a purchase, you input it into your app. This keeps you cognizant of what you’re spending and how much you have left to spend.
And remember, always pay yourself first. When you sit down to make your budget, start with savings and work your way down through needs to wants. Setting financial goals for your 30s is a process that must include saving more than you spend.
4. Minimize Your Tax Burden
You might think you are receiving money from the government when your tax refund appears in your bank account. This is far from the truth. The government is returning what they owe you.
If you’ve not done all your research, you could be leaving deductions or credits on the table.
When you start investing, look for things like tax-deferred investment accounts. I highly recommend working with a tax professional to help you work through your taxes.
Financial Goals For Your 30s For the Long Haul
Why do people end up in debt? Because they aren’t future-focused and they don’t set financial goals.
The time to start building wealth is now. If you are ready to begin, contact Complete View Financial today to start working on your financial goals for your 30s.