By the time you’re in your 30s, you probably want to have a financial plan in place – but it can be hard to know where to even start.
And even beyond a financial plan – what should you be doing with that extra money you have each month? How do you build a budget that works?
If you find yourself asking “am I doing this right?” every time you look at your bank statements, we’ve got you covered.
We rounded up 30 money skills for 30-somethings, from building a budget to investing for retirement and everything in between.
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1. Build a Budget
If you don’t keep track of your money habits, you’re more likely to overspend, and less likely to notice when more money goes missing than you anticipated. Your spending needs to be intentional and based around where you truly want your hard-earned cash to go.
The first step? Building a budget.
I know, I know – the dreaded “b” word – it’s not exactly what you dream of doing in your free time. But financial health is a form of self-care – it’s a necessary part of taking care of yourself.
If you’re not sure where to start, download a financial planning app that will walk you through creating and maintaining a monthly budget.
2. …And Stick to It!
The most important part of any budget is consistency. Your budget won’t serve you well if you’re only updating it once in a while, or constantly spending above your goals.
Don’t be afraid to rearrange the numbers or try different lifestyle changes in the process. Your budget should move with you throughout your life, adapting to your needs and supporting your growth.
3. Pay Yourself First
One of our favorite pieces of advice we hear from advisors young and old is this: Pay yourself first. In other words, make sure you’re putting money into savings every month.
The rule of thumb is to put at least 20% of your income each month into a savings account, before you do anything else with your money.
But don’t feel discouraged if that 20% isn’t in the cards for you right now – you’re definitely not alone. Whatever amount you can set aside is a great starting point.
4. Take Calculated Risks
Your 30s are a time of freedom and exploration – it’s the perfect time to consider a career change or to amp up your investment strategy. Just make sure you don’t short-change “Future You” along the way.
Those long-term goals like retirement or buying a house are always closer than ever, so explore all your options and consider any long-term effects before you make the big decisions.
5. Know What You’re Worth
By this point, you’ve hopefully put in some time in your career, honed your skills, and fashioned yourself into a valuable employee (if you haven’t, now is a great time to start!).
But has it paid off?
Knowing what your worth, and finding a job that will pay you what your worth, is one of the most important money skills for 30-somethings. Look around at what other people in your position in your area are earning. If you’re not in the same ballpark, it may be time for you and your boss to have a talk.
Asking for a raise can be intimidating, but if you want to give your fur babies the life they deserve, it’s time to claim your dues.
Need a little pep talk? We recommend the book “Overcoming Underearning” by Barbara Stanny – it’s full of great advice on how to stop underestimating yourself. And if you find that your current employer isn’t willing to negotiate, it might be time to shop around the market until you find someone willing to pay you what you’re worth.
6. Avoid Lifestyle Inflation
Let’s say you got the raise, and you’re now making more money than ever before. You know what that means?
A new car! A trip to Harry Potter world! The latest iPhone with a fancy rose gold case!
This way of thinking actually has a name: lifestyle inflation – and it can stop you from reaching your financial goals. Think about why you wanted that raise in the first place. Remember your financial goals, and resist the urge to increase your spending habits.
Your new mantra? New salary, same you. Repeat as necessary.
7. Get to Know Financial Lingo
We’ve all heard those fancy terms, like capital gains tax or annual percentage rate. But what do they actually mean?
If you’re still unsure whether Bernie Madoff was a famous pirate or a character on “Fresh Prince,” it might be time to brush up on your finance knowledge.
And don’t worry, you won’t need a college degree in accounting to get the low-down. It can be as simple as listening to a financial podcast, like Girls That Invest, or picking up a book from your local library. With just a few minutes a day, you can nail the lingo in no time.
8. Talk About Money
It’s the unspoken rule: don’t talk about money. But…why, exactly? After all, it’s essential to all of our lives – so why do we have to keep quiet?
Conversations about money can help us learn and grow, even if it feels uncomfortable at first. Ask your parents what money lessons they’ve picked up over the years. Discuss your financial goals with your partner. Find a budget buddy to help keep you on track.
However you choose to engage in the conversation, keep in mind that your journey is unique, and the strategies that worked for your friends might not apply to you.
9. Build an Emergency Fund
Unless you can see the future, you need an emergency fund. In fact, even if you can see the future – you still need an emergency fund. Everyone should have a few months of expenses on hand just in case.
Life has this tricky way of throwing curveballs at us when we least expect it. Whether it’s a sudden job loss or medical emergency, having a backup plan to support you during tough times is always a good idea.
Not sure how to get started? Check out our guide to building your emergency fund.
10. Explore Your Savings Account Options
Did you know that different savings accounts can earn you varying amounts of interest? Online banks like Ally usually offer significantly higher interest rates on your savings than traditional brick-and-mortar banks. The catch is that they aren’t as liquid, meaning it might be harder to actually access those funds when you’re in a pinch.
Whether you decide to go digital or stick to the real world, you should take your time to find the bank that works best for your individual needs.
11. Understand Inflation
If you’ve been following the news at all lately, you know that inflation is out of control. For example, the annual inflation rate in the United States grew from 3.2% in 2011 to 4.7% in 2021. Then in 2021 alone, it shot up 7% – the highest it has jumped in 40 years.
But what is inflation, and why should you care? Inflation is typically measured using the Consumer Price Index, which uses a representative collection of goods – everything from education to gas to produce – to analyze the average increase in prices.
The important thing to remember here is that as inflation increases, that money sitting in your savings account with a comparatively low rate of interest decreases. In short, the money you save today will likely be worth less a year from now, or 10 years from now.
Keeping an eye on inflation is important because your money needs to keep up with it. The value of a dollar decreases every year, so if the interest on your money isn’t keeping up with inflation, you could be in for a rude awakening down the line.
Long story short, if your plan for retirement involves stockpiling money in your savings account, it might not be the best long-term strategy, considering that the average savings account earns 0.06% interest.
12. Save for Retirement
If you want to retire comfortably, the best time to start saving is yesterday. That’s why we’re bringing you this super cool lifehack that can help you reach your savings goals with almost no extra work:
It’s called a retirement account.
From 401(k)s to Roth IRAs, a retirement account is one of your best options for reaching your financial goals by the time you leave the workforce – and it’s one of the most under-appreciated money skills for 30-somethings.
Not sure where to start or how much to save? Check out our article, Four Questions to Consider Before You Start Saving for Retirement.
13. Max Out Your Workplace Benefits
Speaking of retirement, many companies offer their employees a retirement benefits plan. In these cases, the money for your account is taken directly out of your paycheck and into a 401(k) or 403(b), depending on what industry you’re in.
These plans might come with lower investment fees or even an employer match, where your company matches a certain percentage of your contributions. In short, they’re offering you free money. Take as much of it as you can! Sit down with any advisor and this will be one of their top pieces of advice.
For example, your employer might match 100% of your contributions up to 6%. So if you were to save 6% of your salary each year, your employer would also put 6% of your salary into your retirement savings plan at no additional cost to you. Sweet deal, right?
14. Seek Professional Advice
The older you get, the more complicated your financial picture becomes. From the piggy bank to a wallet to a savings account to a stock portfolio, your evolution as a saver has reached a point where you could at least use a second set of eyes on your plan.
A financial advisor can help you in many ways – you don’t have to establish an ongoing relationship. Many advisors offer one-off financial planning engagements where they’ll meet with you a couple times, look over your situation and then build a financial plan that you can implement yourself.
If you’re worried that you won’t have enough money to warrant meeting with a financial advisor, don’t worry. For a long time, advisors only charged a percentage of the assets they managed for you, so it only made sense for them to work with people who had more than $500k (or whatever).
Nowadays, many advisors have adopted a fee-based model that resembles a subscription service, complete with a monthly fee that is standard across all clients rather than tied to the amount of money you have.
15. Think Long Term
When you first begin investing and saving money, it can be tempting to check your portfolio every day and look at whether your funds increased or decreased.
Our advice? Don’t sweat the small stuff.
Your accounts likely still have decades to grow before you reach retirement, and the market is known for its ups and downs. Spending time each day looking at your investments can cause unnecessary stress and even tempt you to cash out those funds. Whenever that market volatility is hitting you extra hard, just remember that you’re in it for the long-term gains.
16. Diversify Your Portfolio
“Don’t put all your eggs in one basket.” It’s an age-old adage that is relevant to investing, too.
Diversification is key to maintaining a healthy portfolio, helping mitigate the impact of and protect you from the roller coaster of the markets. If one investment goes belly-up, you still have others to lean back on.
Don’t worry, you don’t have to pick a bunch of different companies to invest in. The easiest way to diversify is to invest in an index like the S&P 500 that brings together 500 investments in one place that are intended to represent the entire market.
17. Invest in Real Estate
Did you know that 91% of Americans hope to buy at least one home in their lifetime? And there’s good reason – real estate is a great investment, and a solid way to diversify your portfolio.
Whether you’re renting out your digs to generate passive income or just letting your home appreciate in value over the years, real estate can be a great way to build your wealth.
18. …But Avoid Becoming “House-Poor”
It’s important to invest when you’re ready. Buying a home can feel like the best next step, especially when all your friends are making the leap into homeownership. But buying a house before you’re financially ready can lead to a “house-poor” situation – where the majority of your income is being used to pay your mortgage, utilities, and home maintenance, leaving you with little to live off of.
When you’re calculating how much house you can afford, a good rule of thumb is to keep your mortgage below 30% of your gross monthly income.
19. Understand the Impact of Taxes
Whether you love the fall foliage or can’t wait for fun-in-the-sun summertime, we can all agree that the worst season of all is tax season.
When building your portfolio, it’s important to take taxes into consideration. Different retirement accounts and investments can have various effects on what taxes you pay now and later. To make sure you know all the facts before you make any big decisions, it’s worth considering a consultation with a tax planner or other financial advisor.
20. Eat the Avocado Toast
There’s no shame in treating yourself to the simple pleasures of life. If that $5 coffee in the morning brings you joy and makes your day more productive, it’s an investment – in yourself. That doesn’t mean you should forget about all your other financial goals, but don’t penny-pinch to the detriment of your wellbeing.
Splurge responsibly. Eat the avocado and toast.
21. Avoid Debt Unless Absolutely Necessary
There’s a reason the words “debt” and “crippling” go hand in hand – debt can prevent you from reaching your financial and life goals.
With interest rates that hardly ever seem low or even fair, the price tag on your purchase can skyrocket when you pay with credit.
22. If You Have Debt, Pay it Off Quickly
Okay, sometimes debt is necessary – like when you need a degree to land the gig of your dreams, or when you buy your first home. Even credit cards, for all the bad rap they get, can help you build your credit score when utilized correctly.
Debt might not always be the boogie monster in disguise, but loan payments can and will have a long-term impact on your life the longer you keep them. Create a solid plan for paying it off.
23. Don’t Let the Setbacks Discourage You
Let’s say you’ve got a solid savings plan, and you’re consistently hitting your target goal each month. Your emergency fund is fully funded, and you’re feeling good.
Until your car breaks down in October, and you accidentally break your pinky toe in November, and then all of a sudden it’s holiday season and you need to buy some gifts. In what feels like the blink of an eye, your emergency fund is drained and you’re back at the starting line all over again.
That’s okay. That’s what you were saving for, right? Get up, dust yourself off and get to work on replenishing that emergency fund..
24. Create a Will
Nobody likes to think about that long vacation, and many people think only the elderly need to create a will – but the truth is that everyone should have a will.
A will can ensure your assets go exactly where you want them to after you’re gone, which can help avoid family drama and make sure your loved ones are taken care of in your absence.
You’ll probably also want to consult with an estate attorney in your will-planning endeavors, since DIY wills have been known to run into legal issues.
25. “Neither a Borrower, Nor a Lender Be”
Repeat after me: friends don’t ask friends to cosign loans.
When you cosign a loan, you agree to be legally responsible for repaying it. Missed payments – or worse, defaulting – on the part of your friend can tank your credit score and even put your own assets in jeopardy. You can also affect your ability to get another loan down the road.
Cosigning a friend’s or family member’s loan is incredibly risky, and can also alter your relationship with them forever. Set your own financial boundaries and follow through.
26. Take Care of Your Body
One study found that 35% of retirees were forced to retire early due to health problems. And although some health issues are unavoidable, there are ways for you to increase your odds of a long, healthy life.
Preventative care can save you tons of money in the long run. Doctors visits, regular health screenings, and dental checkups can increase your odds of catching any illnesses early, saving you time, money, and stress. You only have one body to last you your entire life, so make sure to take good care of it.
27. Learn How to Cook
We’re not saying you shouldn’t go out to eat – but it should be the exception rather than the rule.
Knowing how to throw together a few basic meals can save you loads of money in the long run, and it doesn’t have to be difficult. You can watch helpful Youtube tutorials from Gordon Ramsey, order a home meal-prep kit from HelloFresh, or even get together with some friends to swap recipes and learn together.
28. Side Hustles Can Make a Big Difference
Whether you can communicate with dead pets or have always dreamed of becoming a professional ice cream taste-tester, there are a ton of weird ways to turn your hobbies into extra cash.
When you’re looking to make a little side money to cushion your budget, a great place to start is to think of what you already enjoy and excel at – and then figure out if there’s a way to sell those passions to others in the form of goods or services.
29. …But Don’t Feel Pressure to Monetize Your Hobbies
Even though everybody loves a little extra dough now and then, focusing too much on side hustle culture can also be draining and even toxic.
Remember that your hobbies and interests serve another (more important) purpose – to bring you joy. If monetizing your passions is only bringing you stress or taking the fun out of your free time, it might not be the best path.
If you have a specific goal – like saving up for a house – that can help put a clear end date on how long you’ll be involved in “the hustle.”
30. Explore Tools to Help You Track Your Finances
From budgeting apps to online financial classes, there’s a wide variety of free or low-cost tools you can use to get your finances on track for the future.
And if you’re ready to start saving and investing toward your goals, Lasso lets you build customized plans based around your goals in as little as five minutes. Plus, you can easily connect with financial advisors totally anonymously.
With these 30 money skills, you’ll be well on your way to making your 30s the most financially successful decade of your life.
Find more helpful money tips over on the Lasso blog, or click here to reach out to us and discover more ways the Lasso app can help you reach your financial goals.