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5 min read

Dec 04, 2020

December 04, 2020

The Big Three: Money Moves to Make in Your 30s

Riding high in your prime? Here’s how to make the most of it when it comes to your finances.

Welcome to your third decade on the planet. It’s a great place to be: you’re young, but not just starting out, experienced, but not “over the hill.” And if you’re like most people your age, you’re thinking about the future and ready to make some real progress toward your financial goals. You might be buying a home, welcoming a baby, traveling with a partner, climbing the corporate ladder, or all of the above!

Of course, your savings goals are as unique as you are. Maybe you dream of early retirement, starting a business, or funding your child’s college education. Maybe you want to leave a legacy gift to a charitable cause. The point is, where you “should be” financially in your 30s depends entirely on your own priorities and lifestyle.

Although there’s no one-size-fits-all savings plan, there are a few universal moves you can make that are destined to pay off. Personal finance experts agree that your overall financial health depends largely on how you approach the big three: paying off debt, building an emergency fund, and saving for retirement. With that in mind, here’s where to focus your efforts as you navigate these critical years.

Get that consumer debt paid off

We know, you’ve heard it before. But hear it again: pay down debt as soon as you can. After all, there’s a reason it’s called a debt burden. Every dollar you pay to someone else in interest payments equals several dollars you can’t invest or save toward your own goals.

It can be tempting, particularly in your thirties, to take the salary bumps you’ve been working toward and spend to the ceiling. Many people allow their lifestyles to inflate at the same rate as (or faster than) their paychecks. A wiser course would be to put the “excess” toward credit card and loan balances and enjoy the increase in income that comes later from being payment-free.

There are several strategies for tackling debt, from the “snowball” method to what’s known as a debt “avalanche.” (Note the cold, hard winter metaphors.) So, face the facts, do the math, and choose one that works for you. And master the habit of paying off your credit card every payment cycle so you don’t do all that work only to end up back in the same rut.

Stuff happens—be prepared

Ben Franklin famously said that “nothing is certain except death and taxes.” But he could have added “financial setbacks” to that statement. (Franklin also doled out a bunch of solid financial advice that still holds true today.) After all, you’re pretty much guaranteed to encounter some roadblocks on your financial journey. Being properly prepared can go a long way toward getting back on track. And that means—yep—having a healthy balance stashed away in an emergency fund.

While you may have been mostly responsible for yourself alone in your twenties, you’ve likely taken on more obligations as you’ve gotten older—kids, property, and so on. That means that even if you were a smart saver early on, your emergency fund probably needs some tweaking to ensure you’ll have enough to get by when things go awry.

So how much is enough? A good rule of thumb is three-to-six months’ worth of expenses. Of course, that’ll mean something different for everyone. For an idea of what that looks like for the average 30-year-old saver, consider this chart as a general guide.

The best way to come up with your ideal emergency fund balance number is to keep track of your expenses for a few months and see what dollar amount would get you through an average month. Then, multiply that by six. Finally, break that number down into manageable monthly chunks you can commit to consistently squirrel away. Once you reach your goal, you can funnel that amount toward a different savings goal; just be sure to review your emergency fund on a regular basis to make sure it’s sufficient for your needs.  

Where should you save? Consider a safe, accessible deposit account like the OnJuno checking account.

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Retirement is coming

Okay, so if you’re in your thirties, retirement isn’t exactly looming. But the advantages of saving early cannot be overstated. Examples, illustrations, and calculators dedicated to proving this concept abound (here’s a fun one.) Basically, the earlier you save, the more time your money has to grow. So if you put some money toward retirement in your twenties, that’s great.

Regardless of what you’ve done in the past, however, now is the time to fully commit. If you’re fortunate enough to have an employer-sponsored retirement program, be sure you understand how to use it to its full advantage. That means saving enough to get your employer’s full match—and may mean saving even more, depending on what you think you’ll need to maintain your lifestyle in retirement. Some financial experts recommend aiming to pay yourself 90% of your pre-retirement income, but a good financial advisor can work with you to determine what works for your situation.

If you’re self-employed or don’t have access to an employer-sponsored retirement plan, seek out a good financial advisor who can help you make the most of contributions to IRAs and other government retirement savings incentives.

Whatever your situation, now is the time to ensure that the money decisions you make now bode well for the future. That’s because the small steps you take in your thirties have the potential to make a big impact on your financial health down the road.


Laura Southwick
With 15+ years of experience writing for finance and tech, Laura specialises in simplifying complex topics for all audiences. Her work has appeared on Ally Bank, Inman, and Hyper Networks.

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