Money in Your Thirties

For many of us, our 30's are a time of settling down and becoming more established -- especially now that women in general seem to be marrying later. My experience was a bit different (at least as far as getting married went) because I married the first time shortly before I turned 21, and by the time I hit 30 I had a 5 year old son. I'd also gone back to graduate school, and was finishing that up.

That's the perspective I'm coming from -- now let's go back in time to...

What I Wish I Knew When I Was In My 20's

Like many women, I spent the first couple of years of my 20's in college. I was also working full time, and bringing in money that always seemed to be spent the minute I got it. My ex and I budgeted carefully, but there wasn't any wiggle room, so we didn't save -- which meant we were living paycheck to paycheck.

There's a whole slew of things that I wish I knew when I was in my 20's, but I'll stick to the biggest things right now.

I wish I knew...

  • not to be in such a hurry to grow up. Being out on your own (or married, in my case) doesn't make you a grown up anyway. It just gives you fewer options financially. I read stories now about how people are graduating college and then going back to live with their parents and I think good. Of course, it's better to do that because you think it's a smart idea, and not because you have to.

  • just how important it was for me to contribute to my 401k (which had a 100% match!) and then never touch it until I retired. Seriously, if I'd contributed to retirement then and left it alone to grow, the magic of compound interest would have worked wonders.

  • what getting a credit card "just for emergencies" would cost me in money, stress, and time spent paying off debt. (And I wish I'd known not to borrow money like that period!)

  • how to analyze my spending and budget to see where things were top-heavy. We were spending way too much of our money on transportation, for example. If I'd realized that the cars we could afford when living at home without other expenses were no longer affordable once we were out on our own, I might have done something about them. Or maybe not -- who knows.

What 30-somethings Should Plan For (And Why)

Once we do hit our 30's, a big part of settling down involves planning for the future.

The key things at that point are probably:

  • Continuing to fund retirement (or starting to if you haven't already)
  • Getting an estate plan in place if you have dependents or are married
  • Making sure that you don't over extend yourself by planning your spending so that you live on less than you earn

That last one is especially important, because it's all too easy to fall into the trap of getting the nice house and car without really being able to afford them. And by "being able to afford them" I mean having enough in savings that you're fine if you're unemployed for an extended period.

Remember, just because your coworkers and friends are all buying stuff doesn't mean that they're smart about it. We don't live in TV land, where a waitress wears Prada and has a 1000sf apartment in Manhattan.

Three Things You Can Do For Your Money In Your 30's

Probably the single best thing you can do for your money in your 30's is to break any bad habits you developed while you were in your 20's. Were you used to eating out every day? Maybe it's time to cut back. Did you spend until you started getting overdraft notices or declined? A budget is your friend, and a great tool to help you get what you want.

Paying off debt is also an excellent idea, especially if you've got high interest credit card debt to take care of.

Finally, dig in and start educating yourself about money. Make a list of the areas you need to learn more about, and then start working your way down it. Knowledge is power, and in this case, it often translates into more money in your bank account. The sooner you start, the more time your money will have to grow, and the better off you'll be.