30 Ways to be Financially Fit by 30

30 – an age of youth, fun, and freedom with a little more money. In your thirties, you generally find yourself young enough to take on new adventures and wise enough to avoid the pitfalls of twenty-something mistakes.

Life should have knocked you down a few times by now. You’ve learned a thing or two. Hopefully, you’ve begun to learn how to take the good with the bad. With some extra cash in hand and a few years of career progress under your belt, you’re confident enough to explore different life stages of friendships and relationships, new opportunities, and goals.

Strive for great experiences with great people. Chase success and relish in comfortable stability. Enjoy your 30s and the years ahead – but first, you must set the stage for your future.

Strive for Success

1. Know your Net Worth

While it’s important to know your personal worth overall (especially when it comes to your career or relationships), knowing your net worth gives insight and power to your financial standing. It’s the first step to understanding where you are and where you want to be financially.

Your net worth is calculated by adding up all of your assets minus what you owe. Many people start off with a negative net worth – use this as a starting point to compare your net worth down the road.

2. Track your spending

It’s pretty easy to lose sight of where your cash goes when you use plastic. Look over your statements, be mindful of your daily purchases, and decide if you want to change how you’re spending your money.

3. Create and stick to a budget

Personally, I have to admit that I don’t truly budget. I know how much I make and I pretend I make much less and live off of that amount. However, many find success in budgeting, especially when prone to spending money as it comes in.

To create a budget, you must account for your monthly income, then add up all of your expenses. Decide which expenses you want to cut and which you want to keep. Spend more than you make? Cut your expenses, get another or different job, or do both. If you need to, you might even tuck the credit cards away for a bit while you work on committing to your budget.

4. Stop living paycheck to paycheck

Living paycheck to paycheck is exhausting. It constantly feels like you’re on the brink of not having enough and that you’re never going to be able to save. Check out No. 3 above and tell yourself you can do it. Cut out what you need to cut out, get roommates, start walking instead of driving…do what you can to hold on to a little more of your paycheck until you can start saving.

5. Build a rainy day fund

Start with a $1000. If you can squirrel that away, then you can surely build yourself up to an emergency fund. $1000 is great to have on hand in case your car breaks down or you run into some kind of unexpected home repair. It’s a starting point to train yourself to save for those “just-in-case” moments in life.

6. Work yourself up to a healthy emergency fund

An emergency fund has a lot more weight to it than a rainy day fund. Emergency funds should contain 3-6 months’ worth of living expenses. These funds are to be used in EMERGENCY situations, such as a job loss or medical emergency.

To calculate the amount you should save for your emergency fund, you must know your monthly expenses and how to budget. An emergency fund will alleviate some stress and help you cope.

7. Check your credit report

You are entitled to a free copy of your credit report once every 12 months. This is enforced by the Fair Credit Reporting Act. Simply visit annualcreditreport.com to request your credit report. Credit reports detail your open and closed credit accounts, track payments and other information on every loan or line of credit you have, and allow for you to review for mistakes or unauthorized activity.

8. Know your credit score

Your credit score is a number that determines your risk as a borrower. You have to build credit to use credit. Are you planning to finance a vehicle? Shopping around for a mortgage? Need a quick loan? Make sure you have credit to your name.

Furthermore, if you ARE looking to open a new line of credit, it’s important to know your credit score and how to improve it if necessary.

• Pay down your debts.
• Use your credit cards, but pay off the balance in full.
• Do not close your credit card accounts.
• Pay your bills on time.
• Raise your available credit.

There are many ways to establish and improve your credit score. You can check your approximated credit score through Credit Karma or Credit Sesame. You might be able to access your actual credit score through your credit card issuer, as many now offer FICO score monitoring.

9. Open a High-Yield Savings Account

Let’s face it – your traditional savings account isn’t cutting it when it comes to compounding interest. What are you getting each month? A cent or two added to your balance?

Accelerate your savings with a High-Yield Savings Account. Brian and I opened our account with Ally at 1.25%, which has risen to 2.20%. We have already netted hundreds of dollars this year!

10. Avoid Lifestyle Inflation

It’s totally fine to reap the benefits of your hard work and treat yourself every once in a while. However, be sure to maintain a reasonable budget. Don’t go overboard…Just because you’re making more money, doesn’t mean you have to spend your extra income! Avoid lifestyle inflation. Reign in those nightly take-out dinners and crazy weekend bar tabs. Be strategic about how you enjoy, spend, and save your next pay increase or bonus.

11. Create additional income streams

Do not rely on one source of income. It’s important to broaden your skill set and focus your attention on bringing in money in other ways than your regular 9-5. Whether you pick up a weekend shift somewhere or master the art of freelance or day trading, you want to at least know that you are capable of making additional streams of income.

The goal is to bring in money while you sleep! Hit up eBay, draw up a manual, or launch a tutorial – there are so many different ways to make some extra cash.

12. Rent or own

Big decision on this one. Rent makes sense if you’re a nomadic soul who prefers to float from place to place. If you want to put down roots, however, you might want to look into owning rather than renting.

While it makes sense that you might not want the responsibility of home ownership and maintenance costs, the cost of rent ALONE might just push you towards ownership. Rents in our area have skyrocketed over the last 2 years. A two-bedroom, 1,200 sq. ft. apartment is easily $2,000/month! It’s preposterous to pay that when a 2,200 sq. ft. home has a mortgage of less than $900. When you own, you also have the ability to rent out your space while creating equity.

13. Focus on retirement

Do you work for a company that offers a 401(k) match? Contribute enough to your account to meet the match! It’s free money! As for me, I do not have a 401(k), and therefore I contribute to a Traditional IRA. I also have a Roth IRA.

For 2019, the maximum contribution to an IRA is $6,000 for those under 50, while the maximum for contribution to a 401(k) is $19,000. If you’re able to max out your retirement accounts, you’ll be in great shape when you retire!

14. Learn how to negotiate well

Whether you’re faced with a big purchase or looking to increase your salary, the power of negotiating well can bring you huge gains in the future. It’s key to remember that the relationship is mutually beneficial. You don’t want to be insulting and you certainly don’t want to be insulted. You already have the upper hand if you can disconnect and walk away.

15. Open a brokerage account

Diversify your investments by opening a brokerage account. Yes, a high-yield savings account is great and maxing out your retirement accounts is even better. A brokerage account, however, gives you ample opportunity to diversify your funds between individual stocks, bonds, exchange-traded funds (ETFs), and mutual funds. You can choose a more conservative route or ride the risk – it’s up to you to educate yourself and learn about the different options.

16. Take risks

In your 20s and 30s, the majority of your funds should rest in stocks. With 30 years until the average retirement age, you’re young enough to take on risks that should lead to higher returns in the long run. Short-term volatility isn’t as much of a concern since the market will bounce back after a dip. With any investment, you should absolutely educate yourself (as you shouldn’t invest in what you don’t understand) before deciding to put down money.

17. Prioritize major purchase goals

You might be saving for your emergency fund or your retirement, but what about a down payment for a house or a trip of a lifetime? Make sure you can account for the additional “big” purchases you wish to make in life. Learn how to divvy up your savings into different percentages to meet your purchase goals by your desired deadline.

18. Make a will

Everyone dies. Sometimes you’re prepared and sometimes it happens unexpectedly. A will outlines what happens to your money and assets upon your death.

19. Cover your family with life insurance

If your family is financially dependent on you, you need to take out a life insurance policy. In the case of your death, you want to make sure your family is provided for. There are all kinds of policies out there – find one that best fits your needs.

20. Invest in yourself

Pick up a book or two about personal finance. Take in a free course on investing. Learning about money and money management is critical to how you live your life. For some ridiculous reason, personal finance isn’t taught in school. It’s up to you to learn the ropes.

21. Protect and insure

By the time you’re nearing 30, you tend to realize you’re not as invincible as you once thought you were. It’s time to invest in proper insurance policies. Take a moment to review and compare different health insurance plans. Shop around for car insurance. Protect your belongings through adequate homeowners or renters insurance.

You don’t have to drop a ton of money for the premium plans, but make sure you find plans that align with your budget and provide comfortable coverage.

22. Shop smarter

Learn how to maximize credit card rewards, utilize discounts, and increase your earnings when you shop! Check out our credit card set-up to see how we take advantage of our reward programs.

When making a big purchase, it’s smart to take some time to make sure you really want or need it and to shop around to find the best price.

23. Choose your convenience carefully

Oh, hard-boiled eggs, how you beckon me at the grocery store when I am starved and half asleep…But that price tag? Yikes! Here’s the thing: Life gets crazy busy sometimes, and while it’s SO much easier to grab breakfast on the go or drop $50 on take-out, your wallet and your waistline are in no shape to sustain that kind of treatment in the long run.

You have to weigh your opportunity cost. Yes, time is money and money is time. Decide how you want to balance your conveniences in this fast-paced, not-enough-hours-in-the-day rush of life. Do you REALLY need that Prime Now delivery of bottled water and batteries? Or can you deal with tap water and swapping out batteries on something else for the time being?

24. Decide if you want children

Let’s not sugar coat this: Children are NOT for everyone. I’m honestly surprised with how many people I STILL come across in this day and age who offer up that they’ll eventually have kids because that’s what “you’re supposed to do”. Um…what? Do you even WANT them? Do you know how expensive they are?! Are you actually going to raise your children or leave them as some kind of burden on society?

According to the U.S. Department of Agriculture (USDA), it costs $233,610 to raise a child born in 2015. That number doesn’t account for inflation! The truth is, you can never be prepared to raise a human being. You can, however, lessen the financial burden by making smart money moves early on. Pay down that debt and start making some serious financial goals!

25. Start paying down debt

Create a debt repayment plan that you can stick with. List out your debts and figure out the debt repayment method that works best for you.

One method is to tackle the debt with the highest interest rate, while another method is to utilize Dave Ramsey’s Debt Snowball Plan to pay off your debt from smallest to largest no matter the interest rate. What can you do when you don’t have any debt? Dream big and find out!

26. It’s okay to say no

Don’t try to keep up with your friends. Don’t try to keep up with Joneses. You are your own person and once you get to know yourself, you can determine your own wants and needs. From that point on, you have to be disciplined enough to understand the difference between a want and need to create a comfortable financial standing. It’s okay to say no when you’re saying yes to something else for yourself, whether for now or sometime in the future.

27. Spend where it counts

It’s time to reign in on those cheap purchases for the sake of catching a deal, furnishing an extra room, or having 5 pairs of the same basic tee. For the most part, these items don’t last and the money you spent on them is gone.

Coach yourself to spend on quality over quantity. Your money should go towards well-crafted, long-lasting items. I admit, I was and still am proud of my resourceful dumpster-diving days. It taught me how to truly appreciate “moving up in the world” in the sense of actually working towards a quality purchase.

Even if it’s not material, for instance, like food, travel, or even a gym membership, it gives you a different level of appreciation if you spend your dollar more wisely than just throwing it away. For example, to purchase whole, quality foods or a premium gym membership that you actively use changes your lifestyle, health, and how you spend your money. Treat yourself, but do so wisely and with intent.

28. Ask for help

Questions, comments, concerns? Start a conversation with your friends or join a like-minded meetup group in your city! It helps to bounce ideas off of others and learn new things, as long as folks can discuss and share without judgement.

Even better, your investment brokerage firm should have plenty of free resources for you to explore with the added benefit of affordable one-on-one guidance. If you prefer, it might even be worth it to you to hire a financial advisor or planner for added assistance.

29. Stay consistent

Have you ever heard about those “get rich quick” schemes? For the most part, they usually don’t work. Sure, someone might strike gold every now and again, but the truth is – they are schemes for a reason. More often than not, it’s a quick way to go broke.

Once you’ve set a financial plan in place and are focused on saving and investing, you must be patient and remain diligent. Do NOT suddenly throw all of your money into aggressive investments. If you wish to diversify or change up your investment strategy, be sure to remain educated to safely do so. Stay consistent in your research and financial habits to build wealth.

30. Change your money mindset

Conversation about money can bring some mighty negative feelings to the table. Money holds power over people – it can create perceptions of inadequacy, defeat, or, at the other end of the spectrum, overall fulfillment. Do not psych yourself out. Money is a tool. If you think about money as a tool, then you can change your mindset to focus on how to MAXIMIZE the use of this tool to create the life you want.

Trial & Error

Personal finance is just that – personal. There is no one-size-fits-all for everyone. You can do as much research as your heart desires, but you won’t know what you are capable of financially until you actually put yourself to the test. Because you’re still young, you have an advantage when it comes to making mistakes. Time is on your side. Now, that doesn’t mean you should behave like a reckless twenty-something, but you can stand to risk what you’re willing.

There are many ways (and many ages) to be financially fit. Everyone has to start somewhere – whether you’re 25 or 55, you just have to take the first step to change the way you spend and save.

What ways do you strive to be financially fit?