For many individuals, their 30s are when they start to hit their stride with their career, bringing home real paychecks. This is also the time period of one's life when big expenses, outside of college, such as children and homes start to come up. Your earning potential combined with life changes mean that you need to be smart with your money in your 30s.
1. Start Living Below Your Means
In your 30s, you should not be spending your entire paycheck each time that you get it or close to it. Your 30s is a perfect time to create a gap between what you spend each month and what you earn each month.
There are lots of different ways to do that. You can move to a house in a more affordable district. You can share your home with roommates or rent out your extra room on a room lending site. You can keep the car you have had for the last ten years that is still running fine instead of spending money on a large car note each month.
Bottom line is you should not be spending all the money you bring home each month if you want to reach important financial goals in your 30s.
2. Start Savings a Percentage of Your Income
Next, once you have started to create a gap between what you spend each month and what you bring home each month, you need to start saving. When you start saving though, instead of creating a monetary savings goal, such as 500 dollars a month, create a percentage-based saving goal, such as saving 10% of what you bring each month.
Having a saving percentage goal instead of a money amount goal can help you for a variety of reasons. If your income goes down for a while, you may still be able to meet your saving percentage goal whereas you would not be able to meet a dollar amount goal.
If the opposite happens, and your income goes up, with a percentage-based saving goal, you automatically start saving more money per month without having to figure out an arbitrary dollar amount. Creating a savings percentage goal will help you consistently meet your saving goals.
3. Start Making a Concrete Savings Plan
Finally, you need to have a plan for the money that you are savings. To start with, you want to take advantage of any 401(k) or Roth IRA retirement savings that you can to the full extent each year.
But you also need to be saving money beyond that. You need to build up wealth that you can access now, not just 30 years from now. Invest in things such as real estate, brokerage accounts, and even saving bonds. Work on creating an investment plan that will allow you to take care of your needs now, in the near future, and during your retirement years.
A financial planning advisor can help you set up a spending and budgeting plan that will allow you to meet your savings goals, and they can help you figure out how to invest your savings each month and grow your money.
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