Who thought you were going to be studying investment strategies at this stage in life? When you hit your thirties, the game starts to change when it comes to your finances. You’re no longer in your twenties’ happy ride, where retirement seemed like a distant imagined existence. Your thirties are the time to get serious about creating a strong financial base for the rest of your life. Don’t worry if you’re a little behind; it’s not too late to get moving. Time is always on your side. Read on and discover the 7 things you need to know about saving in your 30s.
7 Tips for Investing in Your 30s
1- Build an emergency fund
As much as we all hate to think about it, you might lose your job; your car might break down, your dog might get sick well, you get the idea.
But the most important thing you can do before you try all the investing strategies on the planet is to set up a savings account and keep some extra cash in it. It is only going to be there in case of an emergency. So how much do you have to bring in there? There is no correct solution for everyone, but a reasonable starting point is to have at least six months of living expenses in stock. If you have a family to support, it may not be a bad thing to make a little more of your pillow.
2- Create a routine for your retirement saving
Chances are, you don’t want to work forever, huh?
Of course, not.
2010 Census Bureau data showed that 30.8% of people aged 65-69 years (typical retirement age) still work full or part-time. Choosing to rely on social security to cover your living expenses during your retirement years is just not a smart decision.
So, that means that if you haven’t already done so, you can do your 65-year-old future self a favor and set up a retirement fund—one of the best investment strategies for 30 years.
To get a sense of how much you need to save for retirement or financial independence, you can use financial planning calculators online, such as Wealthface’s.
3- Plan separately for major purchases
You’re likely to make some big purchases in your thirties home, cars, big weddings. It can all add up pretty quickly.
Because each goal is so different in terms of their time horizons and the amount of money needed, it is important to set up separate strategies to achieve each goal.
Suppose you’ve got the sum of your monthly savings for each target. You can float on the autopilot without thinking about when or whether you’re going to meet your savings goals.
4- Pay attention to fees
Even if your thirties are a little late to start saving and investing, note that you’re still likely to have another thirty or so years of full-time jobs ahead of you. It’s better to start your investment plans now than to postpone them forever.
Just as critical as optimizing your retirement savings, you need to be extremely cautious regarding the fees you pay (concerning both your financial planner, if you have one, and the fees that your investment itself costs).
The sly thing about payments is that they seem so harmless at first because they’re just a tiny percentage of your nest egg, but note, they’re going to be multiplied for the next thirty years.
5- Create a college savings plan for your kids
Let’s face it; college isn’t going to get any cheaper. Even if you’re not willing to finance your child’s entire education, reducing the pressure on them will go a long way, not only during their college years but for many years to come.
6-Learn to save rather than spend
You need money to be an investor. To get the money, you need to invest rather than spend. This advice is the most obvious one given out by top business professionals. Hence without ado, to be a successful investor, you must do something that nobody in the world wants you to do: save some of your money instead of spending it.
7- Manage your savings and your debts
Some people get used to saving money based on predicted future inflows. It is a gamble, depending on a rise in income that has not yet been verified. Therefore, always try to spend your money based on your real and present financial situation. It will avoid any significant credit crunch problems in the future and save extra capital for investment.
Finally, you start saving as the best plan for saving in your 30s. You can spend more time exploring or save on the chance to improve your future. Your 30s are the time to take the financial future seriously. Yeah, perhaps many people will assume that you’re young, but you know that that won’t always be the way it is. If you’re still 20 or 35, taking a few easy steps today will make the difference for you and your family when you head to retirement.