Financial Planning By The Decades: When You Are 30
BOSTON (CBS) - Today's segment is based on the second book in the series, Your Money Life: Your 30s by financial author Peter Dunn.
This is a tough decade. You now want the grownup things; marriage, a home, kids.
According to Dunn, your thirties is the decade when you begin to put down roots, deepen your relationships, and establish your lifestyle. The financial challenges facing you through these years are substantial, often involving marriage, children, job changes, and even divorce or other unforeseen hurdles.
Investment priorities and insurance needs are shifting, as you deal with your growing responsibilities and try to keep an eye on your future financial stability. It's a decade of greater demands on your money, but it's also a time hopefully of increasing income that will help you reach the goals you envisioned in your twenties.
The money you invest for retirement in your 30s can determine whether you retire on your terms or your money's terms. Your insurance needs start to shift as homeownership becomes more common and you definitely have more demands on your income than you did in your 20s.
The goals for those of you in your 30s:
- You want to be free of student loan debt. (tough to do)
- You want to have an emergency fund with at least 3 months of living expenses in it
- You want to be contributing at least 10% of your income retirement plan
- You want to have a net worth of $250,000 as you approach your 40th birthday
- You want to be within 15 years of paying off your mortgage
- You want to be saving at least 20% of your take home pay
If you do do everything Peter Dunn suggests you will indeed be much better off. So the earlier you start to save and pay down debt the more choices you will have as you go through life.
