Managing money in your 30s is very different than when you were in your 20s. You’ve probably built a good financial foundation at this point and looking to build wealth and avoid money mistakes.
Freedom Debt Relief reviews shares several tips in this article to help people in their 30s successfully manage their money.
Live Below Your Means
You’ve probably heard “live below your means” a million times. And I bet its in one ear and out the other at this point. The saying is common sense right? Mostly yes but digging a little deeper reveals a better understanding of what it really means.
Freedom Debt Relief reviews says it is one thing to earn $6,000/mo and spend $5,999 but something different to earn the same amount and spend only $4,500. Who do you think is getting further ahead?
The more you can sock away, the better off you’ll be in not only the short term but long term as well. You’ll be better off in the short run because you’re able to put away a large amount of emergency fund. You also have money left over for opportunities, such as a down payment for a new home.
When it comes to the long term, you’re saving more for retirement. The more you can save earlier in the life, the better off you’ll be in retirement because of compounding effects of money with time.
Percentages Beats Dollars
If you go from making $6,000/mo to $7,000/mo but then continue saving only $1,500 from our earlier example, you aren’t increasing your savings rate as your income grows. But you should.
Freedom Debt Relief reviews points out that if you don’t increase your savings percentage along with your income percentage increase, you are more likely to waste those additional dollars.
It’s difficult to not fall into the trap of increasing your lifestyle as your income increases. This usually means spending money on consumer items rather than using it to grow your wealth.
In our example, an increase from $6,000 to $7,000 is almost a 17% increase in income. Increasing savings by the same amount results in $1,500 x 17% = $255 additional savings per month, raising total savings to $1755.
Take Command Of Your Money
It’s important that every dollar has a job before it is even born. Here’s what we mean: if you can assign every dollar for your next payment to some job, you’ll always know where your money is going.
Assigning every dollar a job is basically budgeting. If you don’t budget your money and stay within your budget, eventually, you’ll find that you are spending money for things you hadn’t planned on. Instant gratification begins taking over, and before you know it, you’ll be spending more than you make each month.
Building out a budget and practicing it every month gets easier month after month. It staves off instant gratification. As your income increases, your budget can also change. Just don’t sacrifice the percentage of savings for more spending.