10 Ways To Build Wealth In Your 30s And Beyond
To build wealth in your 30s, follow these 10 steps:
1. Examine Your Financial Goals
Before applying methods to increase your net worth, identify your financial goals. Do you want to buy a house in the next few years? Are you thinking about getting married or starting a family? Should you prioritize paying off student loans or lowering your credit card debt? Are you putting enough away for retirement?
Identifying your financial goals during this pivotal third decade of existence can help frame your approach to building wealth. It can also help you prioritize your goals and establish the steps you’ll need to take to accomplish them.
2. Reevaluate Your Budget
Life as a 30-something-year-old can look a lot different than it did in your 20s, so it’s important to adjust your budget to match that reality. If you have a mortgage payment, child care costs and more groceries to pay for now, your budget should reflect that.
If you’re in the process of revamping your budget – and are looking for ways to save more money – try using a budgeting technique like the 50/30/20 method. The rule breaks your income into three categories, recommending you allocate 50% of your income toward your “needs,” 30% toward your “wants” and 20% toward savings.
Let’s say you take home $3,000 every month. Using the 50/30/20 rule, you would put $1,500 toward necessary expenses, like mortgage and car payments, groceries, monthly bills and debt payments.
Then $900, or 30% of your monthly income, would be put toward your wants, which may include dining out, gym memberships and subscription services. The remaining $600 would be deposited in a savings account or emergency fund.
Using the 50/30/20 rule to budget money helps keep your priorities in order, especially as your financial obligations increase. But like any budgeting technique, you should adjust it to fit your lifestyle and needs – treat it as a starting point rather than a hard and fast rule.
3. Spend Less Money Than You Earn
In addition to sticking to a budget, spending less than your monthly income is another way to boost your overall wealth. As you transition from your 20s to your 30s, you’ll likely have a higher salary and enough disposable income to treat yourself to some “nonessentials” like dining out more or upgrading to a newer car.
It can be tempting to splurge on big purchases. But parking some of those “extra” funds into a savings account or retirement plan today can help increase your net worth and prepare you for tomorrow. Living below your means, even for a few months, can help you get ahead on your savings goals. And you may build up enough money to put toward other financial obligations, like debt payments or a child’s college savings.
4. Automate Your Savings
If there is one universal experience for 30-somethings, it’s probably multiple monthly payments, bills and debt obligations to keep track of. Rather than manually transferring money from your checking account to savings each month, consider automating the process.
Set up direct deposit with your employer for every paycheck you earn. Instead of calculating how much you need to put into your savings account every month, you can automatically transfer a specified amount of money from your direct deposit into your designated savings fund(s). If you ever need to adjust how much you’re depositing into your savings account(s), you’ll need to reach out to your employer.
You may want to consider setting up an automatic transfer through your bank. The money will go right from your checking to your savings account. Automating the savings process not only helps you consistently build wealth, but it can take care of building up your savings, too.
