The 8 smartest things to do with your money in your 30s

Many business news sources offer a lot of financial advice for college students, millennials and retirees. But here’s an article from TIME that offers some valuable money advice for people in their 30s.

After a decade of experimenting, failing, learning from those failures, and “figuring things out,” you might find yourself in a more secure financial position once you hit your 30s.

What do you do with excess money when you’re no longer living paycheck to paycheck? And how do you prepare for big expenses you’re bound to face in your 30s?

We spoke to Michael Solari, a certified financial planner at Solari Financial Planning, about the smartest things 30-somethings can do with their money to set themselves up for a prosperous future.

When setting your savings goals, you can’t just go through the motions. “If there are no savings goals, then there won’t be any progress,” says Solari, and your 30s are bound to be filled with bigger expenses – such as a home, car, and children – that require diligent saving.

Mint and You Need A Budget are online tools that allow you to create savings goals and see your progress.

If you plan to buy a home, it should be one of your savings goals. Ideally, you’ll want to have saved enough to make a 20% down payment – anything lower and you will have to pay for private mortgage insurance (PMI), which is a safety net for the bank in case you fail to make your payments.

If you’re thinking about purchasing a home in a major metro area, take a look at how much you need to save per day to put 20% down on a home in major US cities, and see how to make sure you’re buying a home you can afford.

If you plan to have children, it’s time to start saving. The average cost to raise a child is about $245,000, and that doesn’t include college expenses. The best way to prepare for these expenses is to start setting aside money as early as possible. The dependent care flexible savings account could help with daycare; as for the additional costs of college, start by looking into a 529 savings plan.

Insurance in general – health, life, home, and disability – often gets put on the back burner, but it’s important to put in time to research insurance plans, or talk to a trusted adviser, and purchase the right insurance for you. One type of insurance that gets neglected more so than others is long-term disability insurance, but not having it can be extremely risky. Disability insurance is meant to provide income should you be disabled and unable to work, which is more likely to happen that many of us may think.

[Read the full article]

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