Your 30s are a decade in which you often take big financial steps, from buying your first home to changing jobs to saving for your future children.
Because you've been working longer, you'll likely be able to earn more money than you did in your 20s. But it can still be confusing to know exactly what to do with that money to stay financially successful in your 40s and beyond. .
Here are three smart things to do with your cash in your 30s, from two certified financial planners.
CFP and financial advisor Andrew Fincher says people in their 20s should also focus on paying down debt, but people in their 30s are likely to have more income, which puts them in an even better position to tackle missed payments. He says there is a possibility. VLP Financial Advisor.
“When you're in your 30s and have more repayment capacity, that's the perfect time to get serious about making sure that that debt doesn't extend into your 40s,” he says.
If you have kids or are planning to have kids, your 30s should be looking at $529 for college to fund their future education, especially considering the average cost of college in the U.S. is over $36,000 per year and growing. Now is a good time to consider opening a savings account.
529 plans are tax-advantaged savings accounts sponsored and administered by all 50 states and the District of Columbia. Earnings and withdrawals from a 529 are tax-free when used for qualified education expenses.
If you open a 529 account when your child is born, you can save and grow your investments for about 18 years, Fincher said. That way, you're less likely to have to worry about student loans when your child gets older.
State tax deductions for 529 contributions also make these college savings plans attractive, although they vary by state. Contribution limits also vary by state, ranging from $235,000 to $529,000, according to NerdWallet.
Your 30s are the perfect time to make sure your retirement savings are on track and increase your savings.
If your employer offers a 401(k) match and funds your 401(k) based on how hard you work, make sure you make the most of it.
“Look at what we’re trying to improve. [your company retirement plan]says Joe Conroy, CFP and author of Decades & Decisions: Financial Planning At Any Age.
“You might save 1% every year for a few years to increase your savings and get a better rate,” Conroy adds.
If you didn't plan for retirement in your 20s, it's important to make up for lost time in your 30s. If her employer doesn't offer her a 401(k) or similar type of plan, she can open an individual retirement account on her own.
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