Everyone matures at their own pace, but generally speaking, your 30s are a time when you’re no longer spending money as frivolously as you did when you were younger and you’re starting to get really serious about how you want to map out and pursue your financial goals for the rest of your life.
Whereas 20-somethings are still figuring out who they are and what they want to do in the future, a 30-something is likely established in their career, ready to start (or already started) a family, considering the possibility of buying a home (primary residence or rental property, if you already have the first one), and is getting serious about planning for retirement.
In other words, you’ve mostly outgrown your teenage and 20-something shenanigans for the most part by the time you reach your 30s and you’re deeply aware of the importance of investing and saving wisely to stay on track to meet your short and long-term financial goals.
You likely still enjoy the same things you did in your 20s – traveling, dining out and/or drinking, going to concerts/movies, maintaining or upgrading your personal appearance, etc. – but life experience has taught you the true value of budgeting and staying committed to financial goals.
If you’re wondering where you stand amongst your 30-something peers in terms of debts, assets and income, stop comparing yourself to other people. Sure, plenty of surveys and data-driven studies exist about the money practices of various age groups, but at this point in life, you’re personal and professional situation is too unique to compare to an overly generalized, small sample survey.
Instead, you should be aware of the general trends but avoid relying on them too much to make accurate assessments about your own personal financial situation.
With that disclaimer in mind, let’s explore what you should generally focus on investing in your 30s.
Build Your Emergency Savings Fund
According to Federal Reserve data, the median savings for mid-30-somethings in the U.S. is around $3,800. Married couples tend to have higher savings amounts (especially if they have children), likely due to the fact that they have combined incomes and/or need to have more money set aside to protect themselves and their kid(s) in case of emergency.
If you do not have at least 3-6 months’ worth of expenses saved up yet, then this should be one of the first financial goals you tackle in your 30s. When you’re young, living on student loans in college or partially/completely reliant on your parents’ income, you’re not too worried about planning for unexpected scenarios like unemployment, surprise hospital bills, rent or premium increases, etc. However, your 30s is an excellent time – if you haven’t already started – to buckle down and set aside enough cash to cover your living expenses if any of these costly surprises happens to you.
Conquer the College Debt
Do you still have student loan debt? Millions of Americans have student loan debt, including 40/50-something parents and folks in their 60s/70s who co-signed for their child or grandchild’s loans. In other words, student loans are not exclusively a problem of 20-something college students and recent grads; plenty of 30-somethings are still repaying their own student loans (while also starting to save money for a 529 education fund for their current/future children).
During your 30s, it’s important to balance investing with debt repayments, rather than prioritizing one significantly more than the other. Student loans are no joke and you only get a maximum of $2,500 in interest write-offs per year, so don’t let the exciting world of investing and dreams of owning a home hinder you from making more than the monthly minimum payments on your student loans along the way.
And speaking of the 529 plans: if you have a kid or plan to start a family in the near future, now is the best time to open a 529 account and begin your contributions. It may feel overwhelming to balance repaying student loans, saving for a home, saving for retirement and saving for your kid’s future educational expenses, but the earlier you start investing, the better off your kid will be when they’re ready to go to college.
Get Serious About Retirement
It can be a huge challenge for 20-somethings to care much about retirement planning because it feels like a distant, low-priority dream when you’re just getting started in your career and have a ton of other financial obligations to consider. However, retirement planning is critically important for 30-somethings because you need to take advantage of the power of compounding interest while you’re still in the first half of your working life.
When you’re in your 30s, you should be putting at least 15% of your income towards retirement, whether that involves an employer-provided 401k or 403b, or your own traditional or Roth IRA. If your employer offers matching contributions, be sure to take full advantage of that in addition to saving more for retirement on your own. It may not seem like a huge priority when you have other savings goals to consider – a down payment on a home, 529 plans, growing your rainy-day fund, etc. – but the earlier you start growing your nest egg, the wealthier you’ll be when you reach retirement age.
How To Buy Stocks
Anyone with other hobbies and a day job knows that. If you’re looking for a simplified, low-cost solution to the confusion swirling around the stock market and best investment strategies, then Robinhood Financial, the investing app, has something for you.
Robinhood’s number one selling point is that it offers online investors free access to stock and ETF trading. This is almost unheard of. Even “low-fee” online investment platforms still cost investors considerable rates of commission on each trade.
These low-fee online trading platforms also have considerably higher account minimums ranging from $500 (E*Trade) to $2,500 (Fidelity and Scottrade). Robinhood, on the other hand, charges $0 per trade and has a $0 account minimum requirement. This makes it easier to invest even if you only have a little money upfront. Robinhood’s no-fee trading undercuts old-school brokerages.
Robinhood is able to make money through its Robinhood Gold program and collecting nominal interest on account balances. If you’re looking for a truly no-cost way to get started in the stock market, then Robinhood is a great place to start.
Being in your 30s can feel like an awkward transition phase at times. You’re no longer the carefree teenager or splurge-happy 20-something relying on student loans, parental support or a part-time gig anymore, but you’re also likely thinking about progressing in your career, buying a home and starting a family more often than you’re thinking about your retirement goals.
The key to financially surviving your 30s is balance. Managing debts, multiple savings goals, and retirement planning isn’t easy, but by following the aforementioned advice, you’ll be in a good position to meet both your short- and long-term goals.