You’ve reached your 30s — congratulations! If your 20s are all about change (graduating college, starting a career, exploring new relationships and living on your own), your 30s are about taking your life to the next level: accelerating your career, exploring the world and making a difference.
Don’t ignore your finances in this critical decade. You have finally made a dent in your student loans, grown your paycheck and started saving, but there are six other things successful 30-year-olds should do with their money to set themselves up for a more powerful future.
Grow your income. There are two primary levers to building wealth: reducing expenses and growing your income. Now that you have established years of experiences and accomplishments, build a plan to grow your income.
Women still face a wage gap relative to their male counterparts; this begins after college and persists throughout our professional careers. The average mid-40s male college graduate earns 55% more than his female counterparts.
Build your negotiation skills in preparation for asking for a raise or promotion. Here’s how to approach the conversation. Practice with a savvy friend and don’t get discouraged if you get an initial no; build a specific plan for what you need to demonstrate to secure a raise in the future.
Save to spend. This sounds so easy, yet many in their 30s (and 40s and 50s...) spend first and pay off debt later. By your 30s, you should be setting aside money for future expenses, from splurges like vacations to less exciting costs like car maintenance and home repairs.
I recommend doing this automatically; set up a regular transfer from your paycheck into a “save to spend” account that you use for larger, irregular expenses. This is separate from emergency savings; a vacation to Puerto Rico in the middle of January does not qualify as an emergency!
Eliminate unnecessary expenses. You may have enjoyed an increase in salary across your 20s. If you’re like most of us, lifestyle inflation crept in; your spending increased as your paycheck grew. Enjoy the fruits of your labor, but not at a cost to your financial health.
Invest for your future. In your 30s, you should be investing regularly. The number one regret of older Americans is not saving for retirement early enough. Set yourself up for a wealthy future by investing automatically, starting with your employer-sponsored retirement plan.
Manage risk. In your 30s, you may have accumulated assets, started a family and purchased a home. You likely have insurance policies in place for home, health and automobiles.
These topics aren’t easy to address; however, consider the additional stress you’d feel if your partner or family member passed and didn’t have this documentation in place.
Beyond your valuable time, set up recurring donations to the causes you support most. I recommend a monthly donation that you increase with every pay raise. Fundraising is a perennial challenge for non-profits; your regular donations will provide a needed, predictable income stream for your favorite charities.
Strengthen your financial future by taking these six steps to emulate what successful 30-year-olds do with money. If you have any other suggestions, I’d love to hear from you.
The Feminist Financier is on a mission to help women build wealth and own their financial independence, by improving financial literacy and taking the mystery out of money. Ms. Financier is also a shoe addict, travel fanatic, and wine enthusiast.