How To Build Wealth In Your 30s: 10 Tips

If you’re in your 30s, you’re likely well past the career milestone of your first job and may be facing some big life decisions and considering large financial transactions like buying a house. To minimize financial stress and thrive today and in the future, you’ll need to make savvy money moves that build wealth in proportion to your money goa ls.

Let’s dive deeper into the strategies you can apply to build wealth in your 30s and set yourself up financially for the future.

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. 

5. Set Up An Emergency Fund

An emergency fund can come to the rescue if your car breaks down, a pipe bursts in your home, your child needs unexpected surgery or you lose your job. A good rule of thumb is to save at least 3 to 6 months' worth of living expenses. Emergency savings can help ensure you’re covered in the event of an emergency.

6. Keep Tabs On Your Credit Score

Your credit score is a key component of your overall financial profile. A good credit score (or a score ranging from 670 to 739) can mean securing low interest rates and better terms and conditions when you take out a loan or apply for a new credit card. Your credit score and credit history are directly linked to your ability to grow and maintain your wealth.

Are you in search of methods to maintain or improve your credit score? Here are a few high-impact habits to start:

• Make all your payments on time: Timely credit card payments signal to a potential lender that you’re a reliable borrower with enough income to pay your debts and recurring bills. Missing payments can lower your credit score and likely result in late fees.
• Maintain a low credit utilization ratio: Your credit utilization ratio is expressed as a percentage. It shows how much of your available credit you’ve used across all of your credit accounts. The higher your credit utilization ratio is, the less likely it is that a lender will be willing to extend more credit to you. A high ratio can also negatively affect your credit score. The rule of thumb is to keep your credit usage under 30%.
• Keep different types of credit accounts: A good credit mix, which is a variety of credit types, like credit cards (revolving credit) and student loans (installment credit), shows lenders that you can manage paying back multiple types of debts.

7. Prioritize Debt Payments

It can be tough to save and invest when you owe money. That’s why it's in your best interest to pay off your debt as soon as possible. The sooner you become debt-free, the sooner you can allocate your money toward other financial goals.

To pay off debt, you may need to pick up a side job or extra shifts, lower your expenses or cut spending. There are other debt payoff methods you can consider, including:

• The avalanche method: The debt avalanche method involves paying off the debt with the highest interest rate first while making minimum payments on your other debts. This method minimizes the amount of interest you pay over time, which saves you money on interest payments.
• The snowball method: The debt snowball method involves paying off the smallest debt first, then moving on to the next smallest debt amount and so on. This method can help grow your confidence in your ability to pay down all your debts as you watch smaller account balances dwindle to zero.

8. Contribute To Retirement Accounts

If you didn’t stash a lot of money into a retirement savings account in your 20s, now is the time to begin stashing cash in earnest. By planning and saving for retirement now, you’ll feel less pressure once you hit your 40s and 50s.

Let’s go over some popular retirement plans to choose from and review their benefits.

401(k)

A 401(k) is a company-sponsored retirement plan. You have to sign up for a plan through a participating employer. 401(k) plans have numerous tax advantages and higher contribution limits than other retirement plans.

Employer matching – when your company matches your contributions up to a certain dollar amount – is another perk. Maxing out your employer match is a savvy way to earn “free money.”

Traditional IRA

A traditional individual retirement account (IRA) isn’t employee-sponsored. Anyone can open an IRA account. Like 401(k) plans, traditional IRAs have several tax advantages and there are no income limits to open a traditional IRA. Because IRA investments aren’t managed by an employer, you typically have more control over the products you choose to invest in with an IRA.

Roth IRA

A Roth IRA has many of the same benefits you’ll get with a traditional IRA. While a traditional IRA lets you make pretax contributions, a Roth IRA allows you to make after-tax contributions. Because the money deposited into the account has already been taxed, you can withdraw contributions from your Roth IRA tax-free.

9. Take On A Side Hustle

To maximize your earning potential and build wealth, consider taking on a side hustle. Side hustles can be low-stress gigs you take on in addition to your primary job. Some of the best side hustles include:

• Dog walking
• Pet-, house- or babysitting
• Driving for a ridesharing service
• Delivering food or groceries
• Becoming a virtual tutor
• Freelancing

10. Work With A Financial Planner

A financial advisor can help you meet your short-term and long-term goals. An advisor can help you design a financial plan that is right for your lifestyle, financial circumstances and goals. Like a personal trainer holds you accountable for exercising, a financial planner holds you accountable for sticking to your financial plan.

Tips For Investing In Your 30s

It’s essential to diversify your investments in your 30s. While it’s great to invest in retirement accounts, there are plenty of other ways to make money and build wealth.

Consider these options:

• Stocks and index funds: Many 30-somethings are hesitant to invest in stocks because they believe they’re too risky. As long as you diversify your portfolio, you’ll likely increase your chances of enjoying a positive growth rate with stocks and index funds over time, although returns are not guaranteed.
• Bonds: Bonds are kind of like loans to the government or corporations. While they offer a lower rate of return than other investments, they should be a part of your investment strategy because they are generally considered safer investment products.
• Real estate investments: If you choose the right property and, for example, rent it out for the right amount, real estate investing can be another wise decision to make in your 30s.

The Bottom Line

While there isn’t a one-size-fits-all strategy for building wealth, there are several steps you can take to save more money, lower your debts and invest for the future. Small changes and consistency can have a big impact on the rate your wealth grows over time.

If you’re looking for a tool to help you build wealth in your 30s, use the Rocket Money℠ app to stay organized and tuned into your finances. Rocket Money provides an overview of your entire financial profile, from your checking and savings accounts to investments and more. The app can also help you track the steady growth of your net worth to make sure you’re making progress toward your financial goals.

To learn more, create a Rocket Money account today.