Turning thirty, the big 3-0, is probably the most crucial financial crossroad in the lives of many people today. Whether you are embarking on a new career path, planning on buying a house, or preparing for the responsibility of children, how you handle this monetary pivot in your life can very well lay out the blueprint for what the rest of your finances will look like.
However, if you are willing to keep an open mind to the possibilities of new ways of thinking, there are some practical ideas that may be all the inspiration needed to take charge of your own life and financial security.
These 20 tips will give you a different perspective on managing money, well into your 30s and beyond.
1. Be patient and delay pleasure
As you approach your 30s, it is safe to assume that you have probably spent the better part of your 20s in college, surviving on ramen noodles and fast food. Your impulse upon entering your 30s will be to jump into the nice house, the cool car and begin living the American dream. But be careful not to accumulate more liabilities than you have income or assets to pay for.
2. Your house is not an asset
Most people have been conditioned to the belief that buying a house and owning real estate is the secret to financial success. This is really only half the truth. If your home is taking money out of your pocket, (i.e. in the form of a mortgage), instead of putting money in your pocket, (i.e. in the form of rentals or home businesses), it is a liability, not an asset. As you turn 30, be sure to understand the difference between assets and liabilities before making large purchases.
3. Cut back on your vices
Leaving your college years behind, you might have accumulated more vices than you care to admit – alcohol, cigarettes, and undoubtedly fast food, just to touch on a few. To be honest, I have had more than my fair share of those 3 am greasy Taco Bell runs after a night out with friends. As memorable as these times were, a realization dawns as you enter a new decade. Not only are those nights hard on your health, they are also hard on your wallet.
Also, do not forget that as you go from a fun college atmosphere to a stressful work environment, what started out as a fun way to pass the time can become a detrimental and financially draining addiction or coping mechanism.
4. Learn to cook
You don’t have to be a gourmet chef by any means, but If you are serious about managing money, you must at least know how to prepare some basic staples and simple meals that will cut back on how often you have to eat out. It can also be very helpful to plan out your meals for the week ahead of time. This will help create your grocery budget and eliminate random spending on unnecessary food.
5. Don’t be content simply being an employee
In this day and age of rising inflation and stagnant wages, you will probably find it very difficult to make enough money to save and invest after paying for basic survival essentials like food, clothing and shelter. This hardship is a consequence of generations of conditioning children to aspire to simply become employees. Whole generations are told to get a secure job with good benefits and work hard. If you find yourself feeling smarter than your job title, you probably are. As you turn 30, start thinking of ways to accumulate the knowledge that inspires you to create something of societal value.
6. Write out a budget
This might seem like an obvious duh, but how many people do you know who have actually taken the time to write a financial plan, let alone learn how to follow one? Unless you write out a detailed budget, you are playing chicken with your financial future.
7. Save first, pay bills later
Set a savings goal and adjust your lifestyle to meet it. Do not set your saving goal to meet your lifestyle, you will always be broke. Ideally, you should be saving about 25 – 30 % of your income after taxes. The logic in society today is to pay bills and then save. This way of thinking is one of misplaced priorities and an attachment to stuff. If you want to get ahead financially and create true wealth, you must learn to pay yourself first.
8. Go through your debit/credit card statements
Don’t just throw away those monthly statements from the bank, actually go through them. Think of it as a statement that reflects your spending habits or behavior. If you are running out of money before the month’s end, your statement will very well show those loose purchases that add up to cost you tons of money. Go through with a highlighter so you can color code your expenses. This system will help you build your budget.
9. Your time is your most valuable form of money
Time is the one resource we all admit to not have enough of, yet it is the most wasted of all resources.
If you spend 10 – 12 hours of your day at a job you don’t particularly enjoy, do you really believe you are managing your time well? If time is money, then you should learn to invest it in things that add value and joy to your life.
10. Ditch cable
With so many tools available for entertainment – i.e. Internet, YouTube, Netflix, Redbox etc. – it makes no sense to pay $150 – $200 per month to watch reruns. You are probably never home anyway and when you are, there are more effective and creative ways to pass time. Cutting your cable bill can be a good way to, over time, invest $2,000 in your future.
11. Consider the cost of having kids
Having a child is a joyous occasion. However, as you consider growing your family in your 30s, be sure to understand the cost that having a baby can add to your finances. Not to say that if you are blessed with the unexpected gift of a child you won’t be able to lead a happy and financially secure life, but it will unarguably create a few more challenges for you to overcome. The care of another’s life is a huge responsibility and should not be undertaken lightly. So in an age where birth control options are innumerable, take the responsible route and plan for the right time to add to your family.
12. Do not Cosign a loan or lend money
“The borrower is always slave to the lender.” As you get older, you may begin to have family members and friends look to you for financial assistance in getting loans. But try to remember that the bank requires a cosigner for a reason. If the borrower misses a payment, there is a good chance they will come after you. As such, be very hesitant to cosign on any loan. Not only are you risking losing your money, but you are also risking the loss of a great relationship.
13. Be careful who your teachers are and question everything
There will be lots of people, especially family and friends, wanting to give you massive amounts of financial advice as you turn 30. Remember that when it comes to money, everyone has an opinion. Most people are enthusiastically ignorant. You must take every piece of information with a grain of salt. People who may seem to be doing well financially may really be broke and living off debt. Seek not just knowledge, but understanding. Question everything and be careful not to live a different variation of somebody else’s life.
14. Your success is determined by what you do in your down time
Most wealthy people will tell you that you are only as successful as what you do during down time at your job. Marshall Mathers’s rapper counterpart “Eminem” seized every opportunity to battle in freestyle raps, even on lunch breaks at work. Those precious moments of time used turned out to be worth millions of dollars.
Remember as you approach 30 that you will be extremely busy, overwhelmed with work and bills. How you manage your down time is a good reflection on how you will probably manage money.
15. Avoid mind numbing activities
Social media and games like Candy Crush help occupy boredom. But remember that humans are most creative when bored. Just like down time, how you treat this boredom may tell how much success you have. You are more likely to think of something productive to do if you don’t numb and distract your mind with social media and games.
16. Shop by dollar amount, not by unit price or deals
In a world of coupons, mega savers and deals, do not loose money chasing a bargain. If walk into a store with a budget of $15 for a variety of groceries and see one item on sale at 10 for $10, it may not be a deal to you to get the item as your budget does not support the purchase. You simply can’t afford the deal. Going over your planed spending amount to secure a bargain will ensure that you spend the rest of your life doing just that. Again, be patient.
17. Have an emergency fund
Financial adviser Dave Ramsey has a principle that I love and practice and it is called a G.O.K. (God only knows) fund. You have probably gone through your 20s having your financial mishaps covered by Mom and Dad. However thing are about to get real in your 30s. As Mom and Dad begin to withdraw their help, you must learn to create your own safety net, lest Visa and MasterCard catch your slack.
18. Rethink higher education
As you approach your 30s, you are probably thinking of ways to increase your income. The general advice from parents and elders is to go back to school. However, there are many other ways to do this without the debt of a Masters or MBA. The train of thought that more education equals higher pay is an old way of thinking that doesn’t really apply to this generation. While a specialized degree may be relevant in some cases, you are best served to really count the cost of your education and weigh its potential return.
19. Reaize that your savings plan and 401K may not be enough for retirement
Saving money and planning for retirement are good habits to have. However they may not be enough to sustain you and your family in the future.
So far, you have learned a few new tools to aid your financial literacy. Start looking for ways to keep income coming into your pocket even well after retirement. In your 30s, you are able to take a few well informed, calculated risks.
20. Be familiar with self-reliance and D.I.Y.
Self-reliance and learning to create or do things on your own is a big part to saving money. Fortunately, we live in an age of infinite access to information. For example, vinegar and water make a cheaper replacement for Windex. These types of tips for everyday living can be found on YouTube or Google and can really help save money.
These tips aren’t a guideline to strictly follow, by any means. But they are definitely some food for thought as you enter your 30s and seek ways to really buckle down on financial stability.