When you finally hit your 30s, you likely have a steady source of income and have stabilized your finances. This should mean that you have a lot of potential options for financial growth. If you do things right, you should be ready for long-term prosperity when you go into your 40s and 50s.
Here are some smart financial moves on how to invest money wisely that you can make to set things up:
Eliminate Your Debt
The first thing that you should be doing is eliminating your debts. Many people take on a lot of loans in their 20s. This can range from student loans to credit card spending. Most of the time, these loans have not been fully paid off yet because of limited income. But by your 30s, you should have a solid income so you can start paying off all your loans.
The good thing about eliminating your debts is that it will allow you to have more spending power. The money that would normally go to paying off the debts can now be used for other things.
Be Ready For A Rainy Day
While you likely had an emergency fund before, you need to make it a lot bigger now. Upgrading your emergency fund is necessary because there are different emergencies you might face when you are older. Additionally, your expenses are increasing. Your emergency money might only be enough for you as a single person. But if you had a family, you’ll need a lot more money to fall back on. Besides the savings, you should also be getting some good insurance. Medical and life insurance should be at the top of your list.
Start Making Investments
Your 30s are also the prime age for investments. When you were younger, putting money in stocks and other financial products was not economical unless you had a big salary. A steadier career would allow you to have more money that you can invest. Depending on how much risk you can handle, there are several financial products that you can use.
Mutual funds are for those who don’t have time to manage their investments and want low risk. Simply buy shares in the fund regularly and check on the status of the funds to see how well it is doing. For those who have time and are willing to risk a bit for better gains, investing in stocks is a great move.
Invest In A Home
A home is one of the biggest purchases that you can make, along with a car. Buying a house in your 20s was risky but with a better income ten years later, you will be able to afford it. Look for the best possible mortgage rates so that you don’t have to worry about defaulting. Additionally, your larger salary should allow you to save a bit so you can pay a larger downpayment. This makes it easier to get a lower interest rate and have less to pay in the long run.
Calibrate Your Budget
Your 30s are also the time to change around your budget. For example, during your 20s, you likely had a larger budget for entertainment and relaxation. That is understandable but when you are in your 30s, it is time to get serious about your budget. A small change like eating your home-cooked meals and staying in instead of eating out and spending all night at the bar can greatly improve your budget. Another nice change to your budget would be to watch out for increased spending. While you might have more money, you need to spend it smarter.
Begin Retirement Planning
This decade is also the best time to start planning for your retirement. While starting early during your 20s is nice, the 30s are better because you have a better idea of what you want when it comes to retirement. This can lead you to better retirement decisions. For example, you might want to settle down somewhere rural or have a small farm somewhere.
It is a good idea and should allow you to start saving and preparing for it. This includes buying property, having the house built, and everything. With a definite goal in mind, you will a direction in how to invest and save your money.
Your 30s are a prime time in your life. This makes it ideal for making long-term financial moves that will ensure your financial stability. The choices above should help increase your net worth and allow you some more financial freedom as you grow older. With your third decade of life, it is time to get serious when it comes to your finances and start building for the future.