When you reach your 30s, you’ve likely been working for a while and may have seen a decent increase in your annual income. But there are several big life events that often happen around this time that require a good chunk of savings. You may have already experienced them or are preparing for them now. Marriage, having children and buying your first home are common for people in their 30s.
It’s also a good time to think seriously about your retirement plan. Maybe you didn’t save as much during your 20s and are looking to boost your savings or just ramp things up from their current level.
“You’re living the lifestyle you want to live, and building a family,” says Tim Kenney, certified financial planner at Seawise Financial in the San Diego area. “And you’ve found that you’ve got a little bit of extra money laying around or your check’s a little bigger than it used to be. And you’ve got places for that to go.”
Here are seven tips for saving and investing in your 30s and taking advantage of perhaps your highest-earning years to date.
1. Solidify a financial plan
Your 30s are a good time to make sure you’ve got a solid financial plan. There are always unexpected things that come up, but you should know your short- and long-term goals and have a plan to get there. Short-term goals might be planning for kids or buying a house, while long-term goals typically focus on retirement.
If you don’t have one already, make sure you have an emergency fund saved for any major unexpected costs that may arise. This includes hospitalization, loss of a job, unexpected home repairs, sudden automobile expenses and any other unplanned expense. Experts suggest having at least three to six months worth of expenses saved.
2. Get rid of debt
If you don’t have debt, that’s great. But if you do, paying this off should be a priority. Odds are, debt is going to be at a high annual percentage rate (APR). Even if it’s a “low” APR, paying interest should be avoided because it’s money that could go toward savings down the road.
People often want to know which investments will lead them to financial freedom, but paying off high-interest loans is a more certain path than hoping investments turn out exceptionally well.
3. Get your employer’s retirement plan match
At a minimum, you’ll want to be contributing enough to any workplace retirement plan offered by your employer to receive a matching contribution, if available.
For example, you might need to …….