The sooner you get started on the path to building wealth the better. If you’re in your 30s, there’s really no time like the present.
If you can make these smart financial moves now, you can reap the rewards for years to come.
If you’re not actively investing already, you’re missing out on a huge opportunity to build your wealth base. Investing isn’t a get-rich-quick game and it requires not only money but time to result in success.
At this stage, you’re young enough to accept a higher degree of risk than someone who’s in their 40s or 50s. With retirement still decades away, your portfolio has time to rebound if the market takes a tumble. Investing in stocks might seem like a gamble but since time is on your side you can generate real wealth.
Make pumping up your earnings a priority.
Most people don’t hit their peak earning years until they’re in their late thirties (for women) or 40s (for men). It’s important to lay the groundwork now to maximize your earning potential. Keep investing in your skill set and don’t forget to network.
You might consider investing in additional training or education to make yourself more marketable. Switching fields completely could be another route to beefing up your paycheck. If that’s not an option, you might want to think about starting a side hustle to bring in more money that you can use to invest and save for the future.
Trim the fat.
Earning more money can be a catch-22 because the more you have coming in, the more tempted you might be to spend it. When you’re in your 30s, that might mean buying new cars or a big house. But it’s important to slow down. Lifestyle inflation can be a serious wealth-killer, so it’s a good idea to resist the urge to give in to this temptation.
If you’re not free of student loans or credit card debt at this point, it’s best to make putting those debts on the chopping block a top priority. If you own a home, focusing on chipping away at your mortgage is also a good idea. The more you can streamline your budget, the easier it’ll be to accumulate wealth instead of watching your money go to your creditors.
Increase your savings rate.When it comes to saving for retirement, there’s really no one-size-fits-all rule of thumb. With our retirement calculator, you’ll be able to determine exactly how much you need to save in your 30s based on your current level of savings and how you’d like to live once you retire.
The more you can invest now, the bigger your cushion will be when it’s time to stop working. Increasing your current savings rate by even 1% can have a major impact on your long-term outlook.
Building wealth is possible for 30-somethings who are committed to saving more and spending less. Following the action steps we’ve outlined here can put you on the right path to a financially comfortable future.