For many of us, our 30s are a turning point in life. No longer can we get away with the financial sloppiness that was acceptable, and almost endearing, in our 20s, and we're finally at a point where we're advancing in our careers and earning a respectable wage that reflects that. If you're nearing or are already in your 30s, there are certain money moves you must prioritize if you haven't done so already. Here are five to focus on.
1. Establish an emergency fund
It's one thing to kick off your 20s without much in the way of savings. Once you reach your 30s, however, there's no excuse for not having an emergency fund, and without one, you risk racking up serious debt the next time an unplanned expense pops up out of the blue. Your emergency fund should contain at least three months' worth of essential living expenses, so if you're not there yet, start cutting costs to free up cash to go directly into savings. You might also consider getting yourself a side hustle to boost your cash reserves. Chances are, most of your friends are doing it, too.
2. Start building your nest egg
Even though retirement might seem like a far-off milestone during your 30s, the sooner you start saving for it, the more opportunity you'll give your money to grow. Case in point: If you sock away $300 a month starting at age 32, and you invest your savings at an average annual 7% return (which is more than doable with a stock-heavy portfolio), then by age 67, you'll be sitting on nearly $500,000. Wait 10 years to do the same, and you'll have just $228,000 for your golden years. If your employer offers a 401(k) plan, signing up is probably the easiest way to save for retirement, but if that's not an option, you can always open an IRA.
3. Buy life insurance
If you have people in your life who depend on you financially, or who stand to suffer financially if you were to pass away, then you absolutely need life insurance. Many people hold off on buying a policy because they're convinced it'll break the bank, but if you opt for term life insurance (which, as the name implies, covers you for a specific term, as opposed to your entire life) over permanent life insurance, you can keep your costs down while securing coverage for your family. Furthermore, being in your 30s gives you an advantage when applying for life insurance, because the younger you are, the more likely you are to snag a favorable rate on your premiums. This especially holds true if your health is great.
4. Create a will
Creating a will is a sobering experience. It's also a necessary one, whether you have a spouse and children or not. Without a will, you'll have no say in what happens to your assets (and hopefully you've accumulated some by now) after you pass, and if you have kids, you absolutely need a will to spell out who will care for them if you're not around to do so. While you can write up a will yourself using one of the various online programs out there, you're generally better off hiring an attorney. A standard will probably won't cost more than a few hundred dollars, and it's the worth the investment to get it done right.
5. Get out of credit card debt
Many 20-somethings carry credit card debt because their earnings aren't substantial enough to dig out of that hole. But now that you're in your 30s and are hopefully making more than you were 10 years ago, you should hopefully be able to eke out some money to chip away at your nagging debt until it's gone. And if that's not the case, follow the above advice -- cut back on spending and get yourself a second gig to drum up cash and eliminate that costly debt. Once you do, you'll have the option to put that money to better use, whether it's boosting your nest egg, paying down your mortgage, or saving for your kids to go to college.
Though achieving all of the above goals might seem like a big ask during your 30s, remember that you 10 years to make them happen. Hit every item on this list, and you'll be setting yourself up for a financially sound 40s.