Personal Finance In Your 30s

Your 30s can be an exciting time. Many people in this age group are enhancing their careers, getting married, starting families and buying homes for the first time. This is also a time to re-think how you manage your finances. There are several things that you can do to get your money in order while you are in your 30s.

Open an IRA

IRA is short for individual retirement account. Even if your employer has a 401K plan, you should still have an IRA. The earlier you start saving, the more money you will have when it comes time for you to retire. Interest will also be added to whatever you put in your account.

You should try to save 10 to 15 percent of your retirement income per month. You should increase the amount that you save every time that you get a raise. You can increase your saving by 1 to 2 percent when you get a raise.

Pay off Non-Mortgage Debt

Most people go into their 30s with debts. One of the financial goals that you should have is to get out of debt before you turn 40. If you reduce your debt, then you will have more money to put towards retirement. You will also be able to increase your financial stability.

There are several things that you can do in order to pay off your debt. You can start off by paying off the smallest debts first. Paying off the small debts will give you a sense of accomplishment. You will also need to stop using your cards if possible. It will be easier for you to get out of debt if you do not add any more debt.

Try to make more than the required monthly payment every month. If you only pay the required monthly payment, then you will pay a lot more in interest. Additionally, you should try to find more ways to make extra money to pay off your debt. For example, you can get a side job on the weekends. You can also use your talents and skills to make payments.

Increase Your Emergency Fund

Your goal should be to have at least three to six months worth of expenses in your emergency fund. Having an emergency fund is one of the best things that you can do in order to prepare for an unexpected event. Your emergency fund should increase as your income increases.

Consider Getting Life Insurance

Death is not something that people want to think about while they are in their 30s. However, if something happens, then you want to make sure that your dependents will be taken care of. You can protect your loved ones by getting term life insurance.

A term life insurance lasts anywhere from 10 to 30 years. If you die during this time, then the benefits will be paid out to your workers. For example, you have a $500,000, 30-year policy and you die 20 years after you get the policy. Your dependents will get $500,000.

Work on Your Credit

If your credit is not up to par, then now is the time to work on it. You will need to make sure that all errors on your credit report are fixed right away. It is estimated that 20 percent of credit reports have at least one error on them. You will need to contact the credit bureaus in order to get the errors fixed.

Paying off your debt is one of the ways that you can improve your credit. You will also need to pay your bills on time every month.

Photo: Håkan Dahlström / CC 2.0