Financial Planning for Thirtysomethings

Financial Planning for Thirtysomethings

August 27, 2021

As you enter your 30s, your near-term responsibilities and long-term obligations expand. Starting a family, contemplating homeownership and earning enough money to consider investing all come with the territory and require a financial plan. A couple with a house, car and two kids is pictured.

Say goodbye to canned tuna and ramen noodles and hello to the appearance of a gray hair or three: As you enter your 30s, your near-term responsibilities and long-term obligations expand. Starting a family, contemplating homeownership and earning enough money to consider investing all come with the territory.

As you move into some of the most exciting years of your life, here are five tips to help you get started on the path to securing your financial future:

1. Don’t forget the fundamentals. Many of the same financial planning basics from your 20s still apply:

    • Have an emergency fund with six months of household living expenses set aside
    • Allocate at least 10% of pretax income to retirement through a 401(k) plan or other retirement savings vehicle
    • Build a healthy credit history (pay off your balance every month) and monitor your accounts for credit card fraud
    • Take advantage of all benefits available to you through your employer

2. Protect your assets. As your earnings and assets grow, protecting them becomes more important—and that means making sure you have adequate insurance. Disability insurance can help protect your salary if you are unable to work. And life insurance can help provide for your loved ones’ future if you pass away. For further guidance on figuring out how much insurance you should have, please read our article on life insurance and listen to our podcast episode on insurance needs.

3. Manage your debt. Whether you’re hoping to buy a home or simply struggling to pay off student loans, getting debt under control is a crucial component of budgeting for most thirtysomethings. One rule of thumb we like is the “36-28-20” method. The rule suggests keeping total debt below 36% of your total gross income, housing expenses (mortgage/rent/taxes/insurance) below 28% of your gross income and credit card debt and other loans below 20% of net income. (This can be more difficult if you live in an expensive city.)

4. Plan for the worst. If you were in an accident, who would take responsibility for making your health care and financial decisions? How would your car loan and mortgage get paid? If you have children, who would take care of them and would they have sufficient funds to do so? A proper estate plan will provide answers to these questions. Some resources you might want to consider include our Estate Checklist as well as our report and podcast episode on how to find the right estate attorney.

5. Keep dreaming big. Your 30s are a time to work toward your dreams. Whether that means owning your own business, sending your kids to college or ultimately retiring to a beach in Bali, this is the time to call in an experienced financial planner to customize a road map to help you achieve your lifelong goals.

These five tips are applicable to anyone in their 30s. But it’s also important to recognize that everyone’s situation is unique—that’s why we offer detailed financial plans to our clients at no extra cost. If you would like our help to make sure you or a loved one have checked the right boxes for a financial plan, please contact your wealth management team. We’ve got your back.


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