People who are in their 30s are often still at a time when they’re discovering themselves and they’re trying to make experiences and moments that they can look back to when they’re old. But while it’s fun to hang out with coworkers after work and spend hundreds of dollars online shopping every week, one should be using this time to invest in his/her financial future. Here are six easy moves to make in their 30s that can have a huge financial impact in the next few decades:
Aim to Get a Promotion
In your twenties, time was mostly spent just trying to get a job and getting as much field experience as possible, regardless of the pay or perks. Your thirties should be the time in your life to reap the fruits of your diligent and hardworking younger self. Advance your career by researching possible career paths that someone with your experience and skill set can elevate himself/herself to. Determine the kinds of jobs and employers that need you.
Supplement Your Education
To be able to grow personally and professionally, one must continue learning beyond his/her college years. While having a bachelor’s degree can help you get a decent job in your 20s and 30s, competing for upper-level job positions requires a broader knowledge base and skill set. Consider signing up for online courses during your free time. Sites, like Udemy and Coursera, are good places to look for advanced courses on your field of work, especially for those working in a STEM field.
Maximize Your Retirement Account
Getting a raise from a career promotion can only help up your lifestyle in the short-term. One must prepare beyond that by investing those savings and bonuses on low-risk retirement accounts. Max out your 401(k) account, which sums up to $18,000 in annual contributions or $1,500 a month. Supplement your 401(k) with an IRA account, which allows you to contribute up to $5,500 per year. Roth IRAs are similar with traditional IRAs in terms of maximum allowed contributions, but are taxed differently.
Invest in Stocks
Stocks are another staple in any investor’s portfolio. Instead of parking your money on a savings account that offers measly gains, invest in company stocks. Avoid penny stocks that tend to be volatile and high-risk and go for companies that have a proven track record, is financially stable, and has a strong management team running it. Stocks, like Microsoft, Apple, Google, and Ford, are value companies that you should look into.
Invest in a House
People choose to rent an apartment in their 20s since it often fits their lifestyle. It gives them more freedom to move and doesn’t impact their finances as much as buying or leasing a property of their own. In your thirties, however, long-term goals set in and people start to plan for a family or retirement. Start allotting a portion of your income towards a mortgage on a house.
Pay Off Debt
Debt can debilitate you financially, from both the initial amount borrowed and the interest rates that add up over time. A lot of people accrue debt in their 20s since their earning power is low and their lifestyle is usually consumer-driven. Pay off any college debt and credit cards first before putting any money to your retirement accounts. Paying off debt will have the effect of improving your credit score, which ultimately leads to lower interest rates on your loans and credit cards. If you have a low credit score, get credit repair services to boost up your numbers.
Final Thoughts
Making sound financial moves in your thirties can impact how you live in your retirement years. Use the power of compounding to increase your future net worth and retirement nest. To put this into perspective, $50,000 saved between the ages of 25 to 35 can net more than $1 million by the age of 65.