7 Smart Money Moves to Make in Your 30s

Your 30s are a time when you may be hitting your stride in your career, earning good money and realizing it’s time to “grow up” your financial management habits. If it seems like there isn’t any money left at the end of the month or you haven’t started saving for retirement, these money-saving tips for millennials can help you with both scenarios. Here are a few of the best money moves in your 30s to help get your finances in order.  

Check in on Your Finances and Goals

If your finances were on autopilot in your 20s and you were living paycheck to paycheck, your 30s are the time to create financial goals. 

First, you should figure out your total debts (student loans, car loans, credit cards, etcetera). Then determine what goals you want to accomplish in the next 5 to 10 years. Are you saving for a home, looking to start a family, start a business or working towards FIRE? 

Figuring out what you are working towards can steer the path for your finances. You may need to start a side hustle to bring in extra income or just use some of the money-saving tips for millennials included here to help you rein in your spending.  

Make a Realistic Budget

If you’ve struggled with money management in the past, making a budget may be one of the best money moves in your 30s. 

Although a budget may sound constricting, it can be freeing and an important step to meet your financial goals. Make your budget work for you by including a “fun spending” category that can be used however you want with no regrets, whether that funds a daily coffee habit or a shopping habit. 

Include savings categories in your budget for different financial goals along with your monthly expenses and you will be able to feel confident knowing where your money is going and that you have a plan.   

Max Out Your 401(k)

If your employer offers a 401(k), take advantage of it and try to contribute the maximum amount allowed. 

The contribution limit in 2021 for people in their 30s is $19,500. If this seems out of reach and your employer offers a match for your contributions, try to contribute up to the employer match limit. 

Contributing to retirement accounts early is important because it allows time to earn compounding interest which helps your money grow faster. Waiting to focus on retirement savings later is one of the important money traps to avoid in your 30s.   

Open a Roth IRA

A Roth IRA is another savings tool for retirement but allows some flexibility. A Roth IRA is not set up through your employer and can be used in addition to your 401(k). 

A Roth IRA allows money to be saved then withdrawn tax-free because post-tax dollars are used to fund it. There are some income limits for who can contribute to a Roth IRA, and the contribution limit is lower than a 401(k), currently $6,000 per year. 

But unlike a 401(k), a Roth IRA allows contributed funds to be used for select expenses, like buying a first home or covering qualified education costs. 

Pay Down Debt 

There are many personal finance tips for millennials. One major tip is paying down your debt, especially credit card debt. 

Debt payments could be holding you back from reaching other financial goals. With credit cards’ often high interest rates, making only the minimum payment may cause you to be in debt for years. Hopefully, by creating a budget, you can plan to get out of debt and stay out of debt.  

Refinance Your Student Loans 

One of the best money saving tips for millennials is to refinance your student loans. Since 14.8 million millennials have student loan debt, more than any other generation, it’s not uncommon to have student loan payments as a line item in your budget. 

Exploring student loan refinancing can be one of the best money moves in your 30s because it could help you save on interest costs over the life of the loan. 

When you refinance your student loans, you can also shorten the loan term if you are aggressively paying off debt. To see how much refinancing could save you, try ELFI’s Student Loan Refinance Calculator.*

Build an Emergency Fund

Unexpected expenses or emergencies will inevitably arise, so having a well-stocked emergency fund is essential to cover those expenses. 

Contributing monthly towards an emergency fund is another important task when following personal finance tips for millennials. Aim for at least six to eight months of monthly expenses for your emergency fund. Although this may take a while, starting by saving at least $1,000 in the beginning can be helpful. 

A survey by Bankrate found only one-third of millennials had an emergency fund to pay for a $1,000 emergency expense. Focus on achieving that first $1,000 by using any extra money allocated for other savings towards the emergency fund. Then continue contributing monthly until you reach your goal amount.    

Don’t Keep Up with the Joneses

Lifestyle inflation is one of the other money traps to avoid in your 30s. 

It can be easy to fall into the trap of developing a lavish lifestyle during your 30s if you are receiving raises or climbing the corporate ladder. Instead, lifestyle inflation in your 30s by putting that extra income towards retirement or other financial goals. 

Just because others may be buying a new car or a larger house doesn’t mean you should increase your expenses and do the same.  

Bottom Line 

Your 30s can be exciting with some significant life changes, and these personal finance tips for millennials can help set you up for a strong financial future.