Financial Planning and Retirement

Build a Healthy Financial Future - 6 Tips for Managing Your Money in Your 30s

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    • FNBO

      Jul 29 2021

Build a Healthy Financial Future - 6 Tips for Managing Your Money in Your 30s

Your 30s are a prime time for building wealth and preparing for life after working, but it’s also a time to seize the moment. That means making sound financial decisions to help you realize the most of your finances.

Here are 6 tips to help you maximize your retirement savings and to put you on a successful path toward your financial goals.

Pay Off Debt

As you enter your 30s, it’s time to carefully strategize financial management to gain the most from the money you make, regardless of your annual income. One way to do this is by reducing the amount of debt you owe.

It’s a good idea to review your budget and determine ways to pay down any debt you have faster. For example, making one extra payment on your mortgage over the course of a year can reduce the length of your loan by up to 5 years.

This is a simple strategy that many people can put into action. For example, if your monthly mortgage is $1,000, paying an additional $83 a month on principal will allow you to pay off your loan in 25 years for a 30-year note. If you have a 15-year loan, you’ll be mortgage free in only 10 years.

The faster you pay down debt, the more money you have for things like saving. It’s particularly important to have a regular savings plan in your 30s to take advantage of compound interest. Compound interest allows you to grow your savings by earning on interest as well as your own contributions. Over time, compound interest can add up, giving a boost to your nest egg.

For more tips on making the most of your money, take a look at our Cashology blog.

Review Your Insurance and Employer Benefits

Incurring one large medical expense has the potential to wipe out a family’s savings. That’s why it’s critical to ensure that you have the proper insurance benefits in place.

Employer-sponsored plans are typically renewed annually, and it is the only time you are able to make changes outside of certain life-qualifying events. Still, many people don’t take advantage of the opportunity to review their coverage and options. Instead, they continue with the status quo, a decision that could result in hardship down the line.

Is a PPO plan your best bet or should you go with the high deductible plan? We have some tips for helping you make the right choices for your individual situation.

Improve Your Credit Score

Many people underestimate the power of a good credit score when it comes to successful financial planning. A good credit score can help you qualify for lower interest rates when borrowing and can even result in lower insurance premiums, among other benefits.

That’s why it’s important to move the needle on this all-important metric, aiming for excellent on the credit score range. Falling under either poor or fair, could keep you from meeting some of your goals, such as getting that great new apartment or qualifying for a mortgage.

Since credit cards play a prominent role in determining your credit score, it’s very important to take a responsible approach to card usage. Try to always pay off monthly balances to avoid interest and fees and make sure your payments are made on time.

For more information on successfully managing credit cards and improving your credit score, we have some timely and important tips here.

Consider Working with a Financial Advisor

As you enter your 30s, it’s a great time to think about finding a financial advisor. Financial advisors are trained to take a holistic look at your financial situation, meaning they will assess your current finances and help you prepare a roadmap to your future.

A financial advisor can help you in most areas related to financial management, including budgeting, saving, and paying off debt. To learn more about the advantages of working with a professional and how to find the right advisor for you, we’ve put together guidance on finding an advisor.

Increase Your Retirement Contributions

As you juggle a mortgage and family expenses, it may not seem like the best time to increase your retirement contributions. On the other hand, you’re probably making more money in your 30s than you did in your 20s, so it could be the perfect time to start putting away more for your retirement.

The best place to start is by reviewing your current contributions. A financial advisor can work with you to help determine what makes the most sense for you. The important thing is to ensure that your savings are on track to reach your goals.  

Also, be sure you understand the principles of long-term investing, as well as your options for contributing beyond your employer sponsored 401(k), such as utilizing IRAs and Roth IRAs.

Keep Planning & Saving for Your Future

Even if you made solid progress on planning for your retirement during your 20s, your 30s are no time to rest on your laurels. In fact, the opposite is true. It’s one of the best times for ramping up your saving activity and making smart financial choices to ensure that you’re building a solid foundation of successful saving in the years to come.

Visit FNBO’s financial journey page for more guidance or connect with a financial advisor.

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