The good news is that if you’re approaching or have just turned 30, you’re not as behind your peers as you might think. If you didn’t care about building wealth in your 20s, how can you make up for it in your 30s? The average 25-34-year-old is spending over $4,000 every month. But they only make $45,550 (on average) every year. Based on these findings, this leaves roughly $200 every month leftover to go towards building wealth.
Here’s everything you need to know about growing wealth in your 30s
- Define What “Wealth” Means to You
Before you start calculating how much money you need, you need to understand your values clearly. The idea of “wealth” looks different for different people.
For some people, it is to be debt-free, living a modest but comfortable life doing what they take satisfaction in.
For others, it means significant assets and income.
100 people who have thought about it will have 100 different detailed definitions of what “wealthy” means for them.
Wealthy is a relative definition, and you should define what it means to you; either certain net worth, or certain cash flow, or a combination of both.
- Establish a Solid Career Trajectory
Now is the time to figure out what exactly it is you want to be when you grow up. In your 20s, you likely worked in a few different jobs and learned more about what type of career is a good fit.
Some people develop self-awareness right out of the gate and can fall into a focused career they love as early as 18 years old. Not everyone is built that way.
For some people, life experience is really the only way they can discover who they are, what they’re good at, and what they’re not good at.
The first step for doing this is to take stock of your experience and the skills you’ve acquired so far. These can include soft skills like “leadership” and also technical skills in a given discipline.
- Eliminate Your Debt
Consumer debt will hold you back. If you haven’t been serious about paying off debt until now, it’s time to get serious.
The first step to eliminating debt is to stop gaining more debt. The only financing in your life should be towards assets. Set goals for getting out of debt and commit to them.
There are different “best practices” for paying off debt.
“One of the main strategies is to pay off debt with the highest interest first, then also to pay more than the monthly minimum,” says Riti, a working girl and professional assignment help and essay help service provider.
- It’s Time for Your Budget to Grow-Up
We live in a world where many people live beyond their means and aren’t conscious spenders. In your 20s, you might have gotten away with impulse purchases and not sticking to a budget, but the only way you can build with it is to take control of your finances.
If you’re entering 30 without a lot of savings, the truth is you’re going to have to cut a lot of expenses.
Don’t look at this as lowering your quality of life; look at it as not wasting unnecessary money and investing in your future.
Rice and beans aren’t very sexy, but they can be dressed with all types of seasonings and sauces to make them fit any craving. The same goes for oatmeal.
- Save Your Money
The money you make that isn’t going into debt, and your basic needs (food, shelter, health) should be going to your savings. Experts have always touted 20% as the magic amount to save. Most also recommend starting to save that much by 20 years old.
To maximize your savings, you’ll want to funnel your money into accounts that accrue interest. At a minimum, open an IRA and a 401(k).
There are options for all different income levels and types of employment. There are also mutual funds and CD accounts.
To build wealth, you have to think wealthy. Why would you just store money somewhere that’s not doing anything for you?
- Establish Multiple Streams of Income
Everyone seems to have a side hustle these days.
To build wealth, you’ve got to generate multiple streams of income. The people making millions aren’t relying only on their desk job to increase their net worth.
The goal is to establish passive income funnels like a property you rent out or a website someone else manages that earns pay-per-click revenue. It takes time and know-how to understand what makes a good investment versus a bad one. You should focus on saving and paying off debt before you start investing.
- Be a Financial Expert
Educate yourself about personal finance as much as possible. The great news is that there are a ton of excellent free resources out there.
You also might want to consider reading more financial and market news and listening to finance and business-focused podcasts.
- Master Your Trade
Along with investing in your financial education, you should be doing everything in your power to improve your skills and marketability in your career.
You should be increasing your income every year, and one of the best ways to do this is to improve your skill level and income requirements consistently. Take courses, earn relevant and desirable certificates in your field, attend conferences and events, network, read books, and get involved in your industry’s community.
- Work On Yourself
Soft skills can be just as valuable as your technical skills. Money and opportunities don’t just appear, and you need other people to get ahead. You need to be likable.
Qualities like being a good communicator, working with a team, or active listening are all desirable soft skills. The soft skills that are the most important for you to have will vary depending on your career type.
- Get The Right Mindset and Live a High-Quality Life
One of the most underrated musts for getting rich in your 20s or 30s or really at any time is thinking like a wealthy person. Limiting beliefs could be the biggest hurdle you face between your financial standing as it is and where you want it to be.
Don’t fall into traps of self-pity because you “have to be frugal.” You can still have a high quality of life on a budget. You can still travel, exercise, eat healthy foods and enjoy fine dining.
You might find that some family and friends aren’t supportive and frequently peer pressure you to make careless or irresponsible decisions. To move forward, you’ve got to lose the fear of being judged by others and losing friends.
Conclusion
It’s OK to cut out people. It is beneficial to build a supportive network of like-minded people who have similar goals or are already where you want to be.If You Didn’t Care About How to Build Wealth in Your 20s — It’s Not Too Late. If you didn’t care about how to build wealth in your 20s, you’re not impossible to still become wealthy in your life. It won’t be easy; in fact, it will be hard work at times, but it’s doable.
