Start early. Learn how to build wealth in your 30s.
Your 30s are an exciting and also challenging time for building the foundation of your financial future. It may be easier to find financial success than it was in your 20s, but your money is likely to be stretched in many directions at once. Perhaps you have student loans still ticking away, are intent on starting or expanding your family, would like to purchase a home, or reap the rewards of progressing deeper into your career.
All of these are possible while also setting yourself up for success in long-term wealth building. Guidance from an expert can prove invaluable as you re-organize your finances and plan for ambitious lifestyle goals. However, you can also get the ball rolling by educating yourself about how to build wealth in your 30s.
7 strategies recommended by advisors who know how to build wealth in your 30s
1. Give your budget a fresh look for “lifestyle creep.”
It’s likely that a lot has changed in your budget over the last decade. Many individuals earn more as they age. Has your wealth planning kept up with those changes, or have you steadily increased your spending to match your income? This is a common phenomenon called “lifestyle creep” or sometimes “lifestyle inflation.”
There’s no problem with spending a bit more on discretionary items and enjoying your money as your earnings increase. However, it’s important that this slice of your spending doesn’t impact the health of your financial life and future. Take a look at your budget with fresh eyes and see where your money is really going. Personal wealth management — and wealth creation — will require an organized approach that allows you to reward yourself in smart ways.
2. Define your values, then align your budget to match.
Your money is being pulled in many directions in your 30s, and it’s easy to lose sight of what you really want it to be doing for you. Private wealth management experts consistently preach the importance of defining what you value first, then organizing your spending, debts, and investments around those values. This makes it easier to cut expenses in areas you’ve recognized are not top priorities and get that money working for you.
3. Pay yourself first.
Even before you pay your bills each month, consider putting money aside for savings and retirement funds. It’s easy to wait until the end of the month and save what’s left, but purposefully paying yourself first will net more results and help you stick to a more effective, consistent wealth-building plan. You might schedule an automatic transfer for the same time early each month, or adjust direct deposit arrangements to split out a portion of money for savings automatically. This approach emphasizes the importance of your financial future and empowers you to reach those goals.
4. Create an emergency fund.
Unexpected expenses come up — whether for medical reasons, career interruptions, or just to fix your car. It’s difficult to build wealth when every setback stresses your monthly budget or takes money out of the places you’ve put it to grow. An emergency savings account with enough liquid cash to cover 3 to 6 months of living expenses is a valuable cushion. It won’t build wealth as quickly as investments or a CD, but you’ll want to be able to withdraw it on your own schedule and protect it from market risks. Keep your cash reserve ready for when you need it.
5. Take full advantage of the benefits available to you.
The earlier you begin saving for retirement, the more bang you’ll get for your buck. Investigate 401(k) match programs through your employer, if available, and maximize the free money you’re saving through it. You may also take a look at tax-advantaged accounts like a Roth IRA.
6. Build a smarter investment portfolio.
Mutual funds and ETFs can be interesting options for new investors, since they’re ready-made and already diversified. Equity investment options like real estate investment trusts (REITs) can also have strong returns. You’ll want to work closely with a certified financial professional to talk about your options and learn about the pros and cons, but a smart investment strategy can balance risk, reward, and security to get you well on the way to successful private wealth management and growth.
7. Invest in your future with financial education.
Above all, invest in yourself by pursuing opportunities to learn and improve as a master of your own private wealth management strategy. An investment in a financial education course gives you all the tools you need to get the most out of your money and ensure a healthy future for you financial life. The Financial Educators Network offers courses in how to build wealth in your 30s and beyond, taught by highly qualified and licensed financial practitioners - find a course near you.