Your 30s can be filled with important and exciting life changes: marriage, a new mortgage, a new job, a big trip or a baby.
These changes can also be overwhelming, but a solid financial foundation can help you experience them with more joy than anxiety.
Below are nine financial considerations that can help ensure you thrive in your 30s and long afterward. While we’ve organized these tips by age, keep in mind that everyone moves through life stages at a different pace. Depending on where you are, you may want to check out some of the suggestions for other age groups.
Strategies for couples/families
Include finance talk as part of your "I do" prep
Whether you've already walked down the aisle or are just about to do so, get on the same page as your spouse regarding your financial house. Talk about your monthly budget, your short- and long-term goals, and what decisions you should make together, such as large purchases like a car or new furniture, changing jobs or going back to school. A discussion at the beginning of your marriage can prevent many financial and emotional headaches that come from having separate or competing financial plans.
Protect the people you care about
Now is a good time to purchase life insurance, if you haven’t already. These policies, often available through employers, can help provide for your family’s needs if you die unexpectedly or become disabled. If you opt for employer-provided plans, make sure you obtain new coverage when changing jobs or buy them privately if they're not offered through your new employer.
Plan for your children’s financial needs
When raising children, it's often said that the days are long, but the years are short. So, while your own children may be very young, or on the way, it's never too early to start saving for their education. With the cost of college continuing to increase, ask yourself how you'd like to contribute to your children’s education. Do you envision yourself paying for the entire bill, or just a portion? In either case, a 529 savings plan can help you set aside cash and give you a tax break at the same time. These plans can take contributions from anyone and are under the control of the account owner, not the beneficiary. If the intended beneficiary opts not to go to college, the account owner can usually choose another person.
Once you start a 529 plan, an easy way to increase your savings is to funnel money into it from services for children – such as daycare or preschool – once you no longer need them. Since you’re accustomed to not having that money anyway, it’s less likely to be missed.
A financial advisor can help you understand how saving for education may affect your other goals and help you work toward all of them more successfully.
Prepare an estate strategy
It's important to protect your savings and the people you care for should anything happen to you. Examine your life insurance options and consider meeting with an attorney to create a will and formalize your wishes for future medical care. This way, you can make your own decisions now, instead of having someone else make them for you later.
Strategies for everyone
Evaluate income and expenses
If you don’t have a budget already, this is a great time to create one. A budget can help ensure you're living within your means and on track to meet your savings goals.
Start by adding your income, then subtract expenses. Make sure you account for expenses that don't occur on a regular basis, such as car insurance and taxes.
If you find that you want or need to cut costs, consider canceling or re-pricing services or using generics instead of brand-name products. Picking up work on the side, perhaps through gig-economy jobs such as ride-sharing services, will also bolster your cash flow.
Once you’ve completed your budget, put together a plan for the money you have left. It’s wise to have a rainy-day fund for emergencies as well as long-term investments. Ideally an emergency fund has enough to cover three to six months of living expenses.
Increase systematic investments
In this busy decade, look for ways to take the work out of saving. With systematic investing, have a set amount transferred electronically each month to your savings, investments or your retirement plan. Investing a fixed dollar amount at regular intervals is known as dollar-cost averaging, which enables you to buy more shares when prices are low and fewer shares when prices are high. You may also want to automatically channel any interest and dividend payments into expanding your portfolio. By investing on a set schedule, you'll develop discipline that can help you be a better long-term investor.
Pay off high-interest debt
Are you still paying off student loans or credit cards? This is the decade to tackle such high-interest debts, which will help you focus on preparing for your future.
Develop a smart investment strategy
Investing is a pivotal piece of your financial strategy. Given the benefit of compounding returns, it's important to start investing if you haven’t already or consider increasing the amounts you’re putting aside. That’s a smart choice whether you’re saving for a down-payment on a home, your children’s education or your own retirement.
Careful attention to your own investment strategy can help you, your spouse and your children. Start by carefully considering all your investment goals, when you'll need to access the money you accumulate to achieve each of them, and your comfort with risk.
For short-term targets, such as saving for a down payment on a house, you'll generally want to hold cash and short-term fixed-income investments. For long-term goals, such as retirement, you have the leeway to invest more in high-growth securities – which often carry a higher risk of loss but can increase your wealth tremendously over the long term. An Edward Jones financial advisor can help you decide on the balance between risk and growth that’s right for you.
If you haven’t already, set aside — and regularly contribute to — an emergency fund to handle unexpected expenses such as car or home-appliance repair and health care for your family that insurance doesn’t cover. To help you feel more confident during this phase of your career you can also purchase disability insurance which can help make up for lost wages if you suffer a disabling injury or severe illness. You may also want to consider an advance medical directive stating what types of care you want if you become incapable of communicating your wishes.
Contact your local financial advisor
An Edward Jones financial advisor can help make this decade a financially productive one for you.
Katherine Tierney is a Senior Retirement Strategist on the Client Needs Research team at Edward Jones. The Client Needs Research team develops and communicates advice and guidance for client needs, including retirement, education, preparing for the unexpected and leaving a legacy. Katherine has more than 15 years of financial services and retirement experience. She is a contributor to Edward Jones Perspectives and has been quoted in various publications.
*Dollar cost averaging does not ensure a profit or protect against a loss.
*Edward Jones is a licensed insurance producer in all states and Washington, D.C., through Edward D. Jones & Co., L.P., and in California, New Mexico and Massachusetts through Edward Jones Insurance Agency of California, L.L.C.; Edward Jones Insurance Agency of New Mexico, L.L.C.; and Edward Jones Insurance Agency of Massachusetts, L.L.C.