9 Major Money Milestones To Hit in Your 30’s, According to Expert Humphrey Yang
Your 30s can be a busy time when you’re getting promotions, making major purchases and experiencing major life changes. But this decade is also ideal for boosting your net worth so you can enjoy financial security now and a stable retirement later. In a recent video, the financial YouTuber Humphrey Yang suggested these nine money milestones to reach in your 30s.
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1. Top Off Your Emergency Fund
As you manage several responsibilities, having enough emergency savings is crucial. Yang advised saving one year of your monthly costs, though three to six months’ worth is a good start. Use a high-yield savings account and have a strategy, such as making recurring deposits.
2. Become Nearly Debt-Free
Since debt makes things more complex and less flexible, Yang advised paying off all debts except for your mortgage. This will help increase your net worth and leave more cash for new responsibilities, such as taking care of children or aging parents.
3. Have a Credit Score Above 800
Yang said, “The biggest benefit of having a great credit score in our 30s is going to give us a lower interest rate when we’re trying to buy our first home or perhaps refinance that mortgage that we might have.” A mortgage calculator shows that even a small rate cut provides significant savings. Avoid late payments and take other steps to get your score over 800.
4. Don’t Live an Inflated Lifestyle
Overspending to keep up with others won’t help with wealth accumulation and could lead to financial disaster. Yang emphasized trying to avoid increasing your spending even when your income rises. Focus on budgeting and saving cash.
5. Save Three Times Your Yearly Salary
Yang suggested having at least three times your yearly earnings saved by age 40. Even better, consider saving four to six times that amount. This will keep you on track for retirement and enjoy potential gains and interest over the next decades.
6. Make a 30-Year Financial Plan
Your 30s are ideal for making a long-term financial plan. When explaining what you should cover, Yang used the BRET acronym, which stands for budgeting and saving, retirement planning, estate planning and tax planning. He suggested hiring a Certified Financial Planner.
7. Invest in Your Health
Since taking care of yourself can cut your healthcare expenses and lengthen your life, Yang advised investing in your health during your 30s. He gave suggestions such as eating healthy foods, sleeping enough, exercising and taking care to avoid injuries.
8. Make an Estate Plan
Especially if you have major assets or dependents, an estate plan can be important at any age. Yang suggested looking into a healthcare power of attorney and living will. While you can find online templates for these documents, you might want an attorney for complex situations.
9. Have a 529 Plan
If there are or will be kids in the picture, consider getting a 529 plan for their education costs. Yang highlighted state tax advantages along with tax-free earnings when the funds are used properly. You also get flexibility with account rollovers.
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