Your 30s is a time period when you should start making more money, and when you should start saving and investing your money. If you want your money to last from your working years, you need to make sure that you are correctly saving and investing that money as you work on your financial planning. Here are a few different ways that you can invest and save your money in your 30s.
#1 Always Contribute Towards Company 401(k)
Most companies that offer 401(k) will match what you contribute up to a certain amount. Make sure that your contributions to your 401(k) are set so that you are at least maximizing your company's contribution. This is literally extra money that your company is investing in your future, and that you don't have to pay taxes on, so you don't want to leave any money on the table.
For example, if your company will match up to 10% of your salary if you contribute it to your 401(k), make sure that you are contributing at least 10% of your salary. It is also a smart idea to save as much as you are allowed to each year in your 401(k), but if you just meet the company match, that is more than acceptable as well.
#2 Get a Life Insurance Policy
Next, you should invest in a whole life insurance policy. A whole life insurance policy is a great insurance policy to have. Not only will it allow you to take care of your family in the event of your death, but it can also provide you with access to cash when you are alive as well.
If you invest in a whole life insurance policy, you can access that investment. You can withdraw up to the amount of premiums you've paid into the policy, although this will reduce the amount payable upon your death. You can also borrow against the policy and take out a loan against a whole life policy.
#3 Set up an IRA
Outside of your job, you should set-up an IRA. In your 30s, you can contribute up to $5,500 per year to your IRA. This money will not help reduce your taxes as you pay it with after-tax money. However, when you retire and you need to withdraw money, you will not have to pay taxes on any of the money that you withdraw from your IRA, which makes it a worthwhile investment tool.
#4 Build that Emergency Fund
Finally, make sure that you build up an emergency fund. It is important to have cash on hand when your vehicle breaks down or your roof needs repair or you need to make an emergency trip back home to care for someone. As a responsible adult, you should have some cash you can fall back on when the unexpected happens.
In your 30s, you are going to want to work on building up your wealth by investing in your work's 401(k) plan, maxing out an IRA every year, investing in a whole-term life insurance policy, and building up an emergency fund that you can access. These four steps are a great place to start as you build up your wealth.
Nothing is worse than doing your bills, only to discover a sudden expense. When I was in college, I found myself trying to make ends meet by working three jobs and skipping meals occasionally. However, managing your finances doesn't have to be difficult. If you can learn how to save money and make better decisions, you won't have to worry about being able to afford the necessities. My website is filled with information that can help you to manage your money without completely altering your lifestyle. As you go through these articles, I hope that you can find information to help you on a daily basis.