Your 20s have come and gone, and settling down is something weighing heavily on your mind. With major life changes on the horizon, your 30s are a prime time to readjust how you invest. Though each investment plan is individual, here are some tips to help you adjust your investment strategies to fit your 30s.
- Ramp up retirement saving — If you haven’t already been saving for retirement, now is the time to start. If you have, now is the time to ramp up the amount you’re saving. At least 15% of your income should be going to a retirement account.
- Make investing and saving systematic, not sporadic — Automatic saving should be incorporated into the way you split your paychecks. Use direct deposit to automatically put savings away so you never have to feel the separation anxiety of watching money leave your account.
- Insure EVERYTHING — Your 20s were a time for risk taking and a sense of invincibility. Unfortunately, your 30s won’t have you feeling the same way. Installing a safety net in the form of insurance is one way to buffer risk that would otherwise be devastating financially.
- Kid-proof your finances — Whether you choose to have children, already have them, or never plan to have any, child-proofing your finances is always a good idea. Children are costly, costing upwards of $10,000 a year in child care alone. Having that kind of buffer ready is a substantial boon to your finances.
- Set your affairs in order — Wills and estate planning often only enter the picture after children do, but getting your affairs in order ahead of time helps mitigate any uncertainties that can pop up, financial or otherwise. Review these every five years to accommodate changes that crop up in the intervening years.
Investing in your 30s can have an incredible impact on the amount of money you have when you retire. Putting away just $1000/year starting at 30 for 10 years can mean up to $62,000 in your retirement fund by 65, assuming a 6% return on investment and annual compounding. Compare that to investing $1000/year starting at 45 for 20 years: $38,000 in a retirement fund.
Healthy investing habits in your 30s can set you on the right track for the rest of your life. Your 20s may have been fun, but settling down to seriously work towards your financial goals is ahead. Take advantage of it now.