Posted on: 25 July 2018Share
Being able to take care of yourself after you retire starts by making smart financial decisions in your 30s. During your 30s, there are various financial goals that you should aim to meet that will put you on a path towards a positive financial future.
#1 Develop an Emergency Savings
Ideally, in your 20s, you built up a small emergency savings that cover at least one-month worth of expenses, and ideally, up to three months' worth of expenses. In your 30s, it is time to kick your savings into high gear. In your 30s, you are more likely to be responsible for a mortgage, car payments, and perhaps, even a family. A small savings account is not going to cut it anymore.
In your 30s, you are going to want to build an emergency savings account that will provide you between six months to an entire year worth of expenses. Having a sustainable savings account will help you if you ever lose your job. Having a large savings account can even help you secure a mortgage or business loans, as it serves as proof of assets and proof that you have money to fall back on to pay your loan should something go south.
#2 Increase Your Retirement Savings
Next, your 30s is when you should increase your retirement savings. You are going to want to build up so that by the end of your 30s, you are putting away at least fifteen percent of your income into your retirement account. Saving at least fifteen percent of your income throughout your 30s will help make up lower savings rates in your 20s. If you didn't save at all in your 20s, you may want more than fifteen percent.
The more you save, the better off you will be in the future. Of course, you should always make sure that you are taking advantage of any employee matching funds for your retirement account. You don't want to waste free money.
#3 Start an Investment Portfolio
Don't tie all of your savings for your future to your retirement account. Once you set up your emergency fund, make the rest of the money that you save throughout your 30s work for you via an investment portfolio. Work with a financial planning company to set up an investment portfolio. This is a good way for you to grow your money and your wealth outside of your retirement account. With an investment portfolio, you also don't have to wait to retire to reap the benefits of your investments. You can wrap your profit back into more investing or even live off of some of your profit if you eventually decide to retire before you can withdraw money from your formal retirement accounts.
Your 30s is a great time to make smart financial choices that will help you out later in your life. Build up a large emergency fund that will get you through a year, then invest additional money into your investment portfolio. Make sure that you also increase your investment in your retirement savings as you make your way through your 30s.