Main points
- When you’re in your 30s, paying off high-interest debt is one of the best ways to invest your money.
- You can increase your income significantly during this decade, so be open to investing in career development opportunities.
- Use at least 10 percent of your income to build a retirement fund and make sure you have the insurance you need.
Check out our picks for the best annual fee credit cards of 2023
Your 30s are an exciting and critical decade. You’ve had some time to establish yourself as an adult and build your career. In an ideal world, you’d also be saving and investing money regularly. But if you haven’t done that yet, it’s still early to get on the road without too much trouble.
Where you put your money now is very important, because it can set you up for success or make life more difficult as you age. To help with that, below you’ll find the best investments for people in their 30s.
Note that this will be a broad overview of ways to make the most of your money. It doesn’t cover specific companies or properties to buy, but rather how you can use your money in a way that improves your finances and your overall life.
1. Paying high interest debt
While it may not be the first thing that comes to mind when you think about investing, paying off expensive debt is one of the best investments you can make. There’s no textbook definition of high-interest debt, but anything with an annual interest rate of 10% or more fits the bill.
For many, the main culprit here is credit card debt. Americans collectively carry nearly $1 trillion in credit card balances, and the average interest rate is over 20% per year.
Look at it like this – if you eliminate credit card debt at a 20% interest rate, that’s like getting a 20% return on your money. No other investment can reliably get you returns like this.
2. Career development
Your income is one of the most important factors in your financial success. The more you earn, the easier it will be to find money to pay your bills and save for your goals.
Average income rises into middle age and increases slightly for Americans in their 30s. With the right decisions, you can significantly increase your income in this decade of your life. It’s worth looking for ways to invest in your career to give yourself the best chance. Here are a few options.
- Further your education with a degree or certificate program. Adults with higher levels of education earn more on average.
- Take a course related to your career or learn skills that will help you professionally. For example, if being bilingual helps, invest in tools to help you learn another language.
- Work with a coach or career counselor. You can also spend time with mentors to learn from them.
3. Pension fund
Waiting to save for retirement is a very common financial mistake. To illustrate how expensive waiting can be, let’s say two people save $1,000 a month for retirement. Because they invest in stocks, they earn 8% annual returns, in line with the stock market average. The only difference is that one starts investing at 35 and the other starts investing at 50.
At 65, an investor who started at 35 would have $1,490,359. An investor starting at 50 would have $346,038. Those 15 years cost more than $1.1 million.
You’re still young, so put at least 10 percent of your income toward retirement. Here are the most popular tax-advantaged retirement account types that can help you save on taxes while building your nest egg.
4. Insurance
Having insurance is important to protect you from major expenses. There are many different types of insurance and at least every adult should have:
- Health insurance
- Homeowners or renters insurance
- Car insurance (if you drive)
Depending on your situation, there may be other types that you need. For example, if you have a pet, it’s a good idea to have pet insurance. Life insurance is a must if you have someone who relies on your income, such as children or a spouse.
In the case of life insurance, it is worth mentioning that insurance sellers often offer life policies as an investment. For most people, whole life insurance isn’t worth it. For a limited period of time, premium is a better fit as it is cheaper.
As you get older, it becomes more important to use your money wisely. Now that you’re in your 30s, make it a point to aggressively pay off high-interest debt. Don’t be afraid to spend your money on things that will benefit your career and make sure you’re saving for retirement every month. Last but not least, consider what kind of insurance coverage you need to protect you in case of any kind of accident.
Alert: The highest cashback card we’ve seen now has a 0% introductory APR through 2024.
If you’re using the wrong credit or debit card, it could cost you serious money. Our experts love this top pick, which has a 0% intro APR until 2024, an insane cash-back rate of up to 5%, and all with no annual fees.
In fact, this card is so good that our experts use it personally. Click here to read our full review for free and apply in just 2 minutes.
Read our free review