30 Ways to Build Wealth in Your 30s

Your 30s can be one of your best decades ever for building wealth. You may finally have a job that you want to base your career around and you may have started to build some wealth. But your 30s can also be very difficult financially, as you may be starting a family, preparing for your kids to go to college, thinking about saving for retirement, and even trying to keep up with the Joneses.

Fortunately, there are some great moves that you can make with money in your 30s to put you on the right path financially. Here are 30 things that you can do to build wealth in your 30s.

1. Get rid of PMI

PMI or Private Mortgage Insurance is typically required on mortgage loans of more than 80% of a home’s value. The cost of this insurance varies based on your credit score and debt to income ratio, but it can often range between 0.5 and 1% of a home’s value. For a $200,000 home, this means that you may have to pay between $83 and $167 extra per month, just for PMI.

Getting rid of PMI means that you will have that much extra money each month to pay down your debt or invest with. It also means that you’ll be on a quicker path towards building wealth.

The easiest way to get rid of PMI is to pay down your mortgage to 78% of the purchase price. Another great way to remove PMI is to refinance your mortgage to 80% or less of the home’s value.

2. Eliminate credit card debt

The average credit card debt per household in the United States is $8,512. This means that the average household is paying $122 per month just for credit card interest!

To build wealth in your 30s, it helps to get rid of your credit card debt. Along with countless other financial advisors, I recommend attacking your credit card by selling as much stuff as you can, working extra side hustles, and eliminating non-necessary expenses. After all, $122 per month is way too much to throw away on things you purchased a long time ago.

3. Own a house that you can afford

Many people, including me, have purchased a house that makes it nearly impossible to build wealth in your 30s. For instance, a $400,000 mortgage on a house means that you are sending at least $1,200 to your mortgage company each month, just to pay interest.

Instead of purchasing a huge house, it usually makes sense to try and keep your mortgage, interest, and property tax payments to less than 25% of your net pay.

4. Stop leasing cars

Although car leases can seem pretty cheap, they are actually pretty expensive when compared to purchasing a used car. For instance, a $300 monthly car lease over a 40 year timespan could grow to nearly $800,000 if it was invested for those 40 years at a 7% rate of return. We would still need to purchase cars over this time span, but they would cost significantly less than $800,000.

5. Increase retirement investments

When you first started working during your 20s, it may have been difficult to invest lots of money in your retirement accounts. However, as you get into our 30s, you may have been working for 10 years or more, hopefully earning some raises along the way. Unfortunately, you may not have increased your retirement savings to keep pace with your raises.

Although it may be hard to instantly increase your retirement savings by $100 or $200 per paycheck, you can still increase your retirement investments. The best way to do this is to set up an automatic increase every 3 months or year. This will allow you to increase the amount invested for retirement, without feeling the pain of a large, one-time increase.

6. Get in shape

I know that it doesn’t seem like getting in shape would help you to build wealth in your 30s, but getting in shape. . .

• can save you on future health care costs.
• can help you to be more productive at work and at home.
• may even allow you to find lower health insurance costs.

Getting in shape can be as easy as going for bikes and walks around your neighborhood or as intense as high intensity interval training. You don’t even have to do it on your own. Many cities have running or workout clubs, which will help you to stay motivated as you continue to get healthier.

7. Plan for big expenses

Every single year, we have to pay big expenses like car insurance, taxes, or Christmas. However, when these expenses actually happen, they often seem like a surprise because we haven’t saved up enough money to pay for them.

Instead of having these expenses surprise us, a fund could be created to pay for them without using debt. If we typically have around $6,000 of big expenses each year, then we can save $500 per month in this fund to pay for these expenses.

This way, big expenses won’t be a surprise.

8. Invest in index funds

Index funds typically charge annual fees of 0.15% or even less. When comparing this to an actively managed fund, this is a savings of around 1% per year.

A fee of 1% doesn’t seem like much, but it can add up to hundreds of thousands of dollars during your lifetime. Index funds have also been shown to outperform actively managed funds 91.6% of the time during a 15 year period.

In other words, index funds are almost guaranteed to be better than actively managed funds.

9. Set financial goals

Civil rights leader, Benjamin Mays said this about goals:

“It must be borne in mind that the tragedy of life doesn’t lie in not reaching your goal. The tragedy lies in having no goals to reach.”

With money or anything else in life, a lack of goals means that we will flounder around, never really reaching our full potential. Simply setting a goal, whether it’s a huge goal or a small one, will help us to instantly improve our debt, savings, or any other financial area of our lives.

10. Purchase used cars with cash

When I got my first job after college, I immediately went to the car dealership and financed a brand new Honda Accord. After all, I thought that I deserved a new car since I had a job already lined up.

However, now that I am a bit older and perhaps a bit wiser, I realized that what I really deserve is freedom from debt and payments.

I don’t deserve a new car every 5 years.

Therefore, I currently save up when I want to buy a car and then buy a reliable, but still cheap, used car with cash. This has allowed me to get out of debt, save more for retirement, and avoid the cycle of $400 car payments for the rest of my life.

11. Take control of your retirement investments

Retirement is, without a doubt, the most expensive thing that we will ever “purchase.” However, many people only spend a few minutes setting up their retirement accounts and then forget about them for most of their careers.

Instead, now that you are in your 30s, you need to take control of your retirement investments.

• Are you overpaying for any of your investments? Be sure to look at your mutual fund and assets under management fees.
• Are you saving enough money for retirement? Set up automatic increases to your 401(k) so you won’t be forced to work forever.
• Are you invested in the right investment vehicles? Your risk profile has probably changed since you originally set these investments up.

12. Look into a Flexible Spending Account

A Flexible Spending Account (or FSA) is a simple way to save taxes on the money you spend on doctor’s visits, prescriptions, and daycare expenses.

With an FSA, you contribute a set amount from each paycheck to either a Health FSA or a Dependent Care FSA. Then you use your FSA to pay for health or dependent care expenses. The great thing is that this is done with pre-tax dollars, so you will save your tax rate on any health or dependent care expenses.

The important thing to remember with an FSA is that it is set up as a “use it or lose it account.” Because of this provision, people typically put less into the account than they think will be used.

Limits for 2020 are $5,000 for Dependent Care FSAs and $2,750 for Health FSAs.

13. Spend money on things that you value

It’s easy to drive through our neighborhood or scroll through Facebook and notice that our peers have recently bought new cars, remodeled their house, or went on a trip to Europe. And as we get raises at our jobs, it can be tempting to do the same thing as our peers.

However, to build wealth in our 30s or at any other time during our lives, it helps to spend money on things and experiences that we value, instead of what others value. For instance, perhaps constantly having new clothes is really important to us. If this is the case, then we should definitely spend money on new clothes. However, if new clothes aren’t as important, then we shouldn’t feel forced to get them just because others do.

14. Get an emergency fund

Emergencies will happen. Your car will break down, your furnace will stop working, and you will get sick. If you don’t have a plan for these expenses, then you will be forced to continually go into debt to pay for these expenses.

Instead of having a high limit credit card that is used for emergencies, set a few months of expenses aside in a high yield, online savings account.

15. Think about getting a Roth IRA

A Roth IRA is a great retirement vehicle that allows you to avoid paying taxes on any earnings received from your retirement investment. Typically, a Roth IRA is useful for people whose taxes aren’t too high right now and would like to save money on their future taxes.

For a good analysis of the benefits and drawback of Roth IRAs vs. Traditional IRAs, just check out this article.

16. Start travel hacking

What’s the best type of travel?

It’s free travel, of course! However, if you’ve never heard of travel hacking, you may think that free travel is just a gimmick.

Fortunately for you and I, free travel is possible and fairly easy to get by using credit card travel rewards. For instance, I saved over $9,000 on my trip to Hawaii, traveled to New York City for $22, and saved thousands on our trip to Disney World.

Check this article out to see how you can get started with travel hacking using credit card rewards.

17. Find a job that you enjoy

Life is too short to do something that you hate for 20, 30, or 40 years. Therefore, it makes sense to find a job that we will actually enjoy during our lives.

This doesn’t necessarily mean that you have to move to a National Park and become a park ranger. Instead, it means that you can take the skills you have already learned over the past several years and apply them to a job that you enjoy.

18. Think about retirement

Even if you have a job that you enjoy, you may not want to do it forever. At the very least, you will probably want the option to retire eventually or even to retire early like I’m planning to do at age 50.

To see how much money you might need for retirement, you can use the 4% rule which states that you can safely withdraw 4% of your portfolio each year during retirement. You can also check out this article by Mr. Money Mustache to determine how increasing your savings rate can decrease the amount of time that you will need to work.

19. Start a side hustle

Even if you love your job, one of the best ways to build wealth in your 30s is by starting a side hustle. A side hustle can help you to pay down debt and save for retirement. It can even be done online from the privacy and convenience of your home office.

The great thing about a side hustle is that you can often devote as much time to it as you want. Your profits are often only limited by how hard you want to work.

20. Make passive income

One of the best things that you can do with your money is buy things that will make you money while you are sleeping. This can be as simple as investing in the stock market or as complex as starting your own business.

No matter how you do it, earning passive income can allow you to pay off debt, get off the 9-5 work treadmill, and eventually become very wealthy.

21. Think about the environment

Before making a purchase, taking a car trip, or going on vacation, think about how your action is affecting our planet. Often just thinking about this can allow us to avoid buying plastic stuff that we don’t need. It can also turn a boring, 2-mile drive into a much more enjoyable bike ride.

22. Earn more

On this website, I focus a lot on decreasing expenses. However, besides decreasing expenses, one of the easiest ways to build wealth in your 30s is simply earning more.

This can be done by asking for a raise at your current job or by looking for a job in your current industry that pays better. You can even look outside your industry to find other jobs that pay well and are enjoyable for you.

23. Sell stuff that you don’t need

We all have stuff that is cluttering up our houses and garages. Not only does this stuff clutter up our lives, but it also costs us money and time as it sits there unused.

If you haven’t used something over the past 6 or 12 months, now is a great time to think about selling it or donating it. This can be an easy way to earn a few hundred or thousand dollars to put on your debt or start an emergency fund. But even more important, going through and getting rid of stuff will simplify your life and actually help you to be happier.

A great resource to help you with this is Marie Kondo and her KonMari method. This is a method to choose things that spark joy in our lives and get rid of the rest.

24. Get out of debt

Even though you may have been out of school for 10 years or more, you may still have a student loan that you are slowly paying off. You may also have a car loan, credit card debt, or even some medical debt that you can’t seem to get rid of.

Guess what?

It’s time to get radical with your debt! Being in debt costs you thousands of dollars each year and stops you from truly being able to build wealth in your 30s and beyond. Find out how much you spend on interest each day and vow to get rid of it. Then make a plan to get out of debt as soon as possible. Sell stuff, work extra, and find money in the couch if you have to. Do whatever you can to get rid of this debt! Today!

For a great guide to getting out of debt, check out this huge article that I wrote. It will show you exactly how you can get out of debt and provide you with the motivation to do so.

25. Learn about money

Many people are extremely knowledgeable in many aspects of their lives, but they struggle to learn about money. This means that they may not know the best ways to invest, struggle to understand why it is important to get out of debt, and often buy things that they can’t really afford.

If this is you, don’t despair! Money can actually be fairly simple and education is the key. Of course, I’m not talking about a graduate level course in investing. Instead, I’m just talking about reading a few books or websites that talk about some basic financial concepts. Just learning a few basic concepts can save you hundreds of thousands of dollars over your lifetime.

26. Surround yourself with the right people

In the movie, Brittany Runs a Marathon, Brittany has surrounded herself with people who like to drink and party. Therefore, Brittany finds herself drinking and partying, even when she doesn’t really want to. When she finally begins to run, she surrounds herself with people who are better influences. Instead of drinking and partying, she often makes more health conscious decisions like going to bed early and avoiding excessive drinking.

Just by surrounding herself with the right people, Brittany immediately becomes a better person as well.

The same can be said with money. If we surround ourselves with people who are constantly bragging about all of their consumption, then we may feel like we need to consume too. We may get on a hedonistic treadmill of consumption, thinking that stuff will make us happy, instead of realizing that happiness comes from fulfilling relationships and meaningful work.

27. Budget

I know that “budget” can seem like a dirty word to many people. However, a budget is simply a plan for where our money is going. We wouldn’t start driving on a vacation somewhere without first having a map and a plan for where we are going. So why shouldn’t we have a map for where our money is going?

It would be demoralizing to realize that we worked 40 hours last week and had no idea where our money actually went. So let’s set up a budget and tell our money where to go.

28. Ignore daily fluctuations in the market

If we watch the news or read any news website, we will constantly read that the stock market is overvalued. Financial prognosticators will encourage us to sell, sell, sell. Then, when the market actually dips by 1 or 2%, they will really start to panic and try to convince us to panic as well.

Ignore them!

The stock market will go up and down. If we realize this and just continue to invest our money into it, we will continue to receive gains of 7-10% from it. If we panic whenever there is a blip in the market, we will find it impossible to build wealth.

29. Save for college

If you have already started to save for your own retirement, it may make sense to begin to put some money away for your kids to go to college. Again, you should always take care of your own finances before helping your kids out with college. But once your finances are in good shape, you may want to begin to save money in a 529 plan or other investment vehicle for your kids.

30. Get started today!

Reading an article like this can be entirely worthless if you don’t actually make any changes.

Therefore, you should pick 1 or 2 of these items and get started on them today. Send some money to your credit card company and pay down your debt. Look into a side hustle. Increase your retirement contributions.

No matter what, you should get started today!

---

What will you do to get started? Or is there anything that you are doing that I have missed? Let us know in the comments below.

And thanks for reading!

~Nathan

---

Let’s keep living a great life . . . with the help of money. So what’s next?

• You can travel for free by using rewards credit cards.
• You can get motivated and get out of debt.
• You can check out previous post or the next post and continue to learn.

But no matter what you decide to do, let’s leave the ordinary behind and take action today!