With your 20s gone, setting up your 30s for financial success should be high on your priority list. You have learned a lot over the past few years, and now it is time to use that wisdom to your advantage and make great financial decisions.
Having established a good credit score in your 20s is a great way to build upon it in your 30s. Starting with a solid foundation, your 30s will be the best time to bolster your finances and get out of debt too.
Add more to your retirement fund
If you are earning better than what you were earning in your 20s, then it is the best time to add more money to your retirement fund. In most cases, having more income means that you will fall victim to lifestyle creep too.
So to avoid that, you can add the extra money right into your retirement fund. You will avoid moving into bigger spaces or getting more expensive cars.
Set up a 529
It is a tax-deferred education plan that can help you pay for your kid’s education. It is mainly meant for college education, but since 2019 it can be used earlier too. All the withdrawals from it are tax-free and can be used to pay for the kids’ education at various points in their lives.
You will be paying current tuition rates for classes in the future so you will not only save on tax but on inflation too. Overall, the cost of college will be reduced drastically.
Debt
All your non-mortgage debt should be paid off first, like high-interest credit cards and student loans. Try to end them as soon as you can and make way for higher payments like a mortgage.
Emergency Fund
This is a rainy day fund that you should spend money on regularly so that you have enough savings to cover an emergency. It can be anything unexpected, health issues or your car needs major repairs.
Having an emergency fund up and running will help you be prepared for anything unexpected that might come your way.
Adjust Your Budget
As you grow, your budget will also change. This means that you will need to adjust it periodically for what happens in life. You can change your savings goals and then see what works for you.
If you are trying to save more money, then getting rid of some pricey items can be a great way to save some money.
Insurance
The insurance provided by your employer might be able to cover almost all your needs, but it does not hurt to add a disability cover or more coverage as time passes by. Also, make sure that your family is also covered in the plan. If not, then it is the best time to add them to a plan.
In the end
As your income increases, it is a must to invest in your future first and current amenities later. Lifestyle inflation can leave you with the same amount of money and less than optimal conditions.
