Financial Planning in Your 30s

By: Wesley Watkis Click author's name for more of his/her articles

Financial planning is a good idea no matter how old you are, but your 30s are one of the best times to really focus (or get started) on a plan for the future. By now, you are probably more established in your life than you were a decade ago. You have had some time to build your career, ideally with a company-furnished 401(k) for retirement or some other long-term plan. Whether you have a family and a mortgage or are still renting and building wealth in other ways, you can always benefit from a sound financial plan for the years to come.

Here are some common financial planning concerns for people in their 30s and how to address them:

Deal with debt - The average American family carries over $8,000 in credit card debt over multiple credit cards. As many people know, paying only the minimums on a credit card does virtually nothing to lower the principle as the minimum payment barely covers the compounding interest.

If you find yourself drowning in credit card debt or unable to make a dent in the principle, make a plan to get yourself out of debt as quickly as possible. Draw up a budget and allocate as much money as possible to paying off your credit cards, starting with the highest interest rate card first.

If you find you still have student loan debt hanging around from your 20s, it is time to get rid of those, as well. As with the credit cards, come up with a long-term solution for getting the debt paid off, even if it takes you the next five years to do it.

Pay attention to savings and insurance - An emergency fund for unexpected expenses is always a good thing to have. Estimate how much money it would take to keep you afloat for three to six months and put that money in a hard to get to bank account. Don't touch that money unless absolutely necessary for a real emergency such as unforeseen medical expenses.

Do not forget to budget for adequate insurance to help protect yourself and your possessions. While most people receive health insurance through work and are required to have auto insurance, don't neglect other things like homeowners/renter's insurance, life insurance, and even disability insurance. If the unexpected occurs, not having insurance can undo all of your years of savings.

Really focus on retirement - If you have an employer-sponsored 401(k), you are lucky, and have hopefully been contributing to it regularly since your career began. If so, keep up the good work.

If you do not have an employer-sponsored 401(k) or independently opened an IRA for yourself, the time to start is now. While you many not be able to save as much money as you would have if you had begun saving in your 20s, any money saved is a good start to a more secure retirement. You can also look at other options, including investment portfolios with long-term options, since you still have a few decades before you'll need to tap into those funds.

One of the best things about being in your 30s is having a better idea of what you want out of life. Use that drive to make wise financial decisions, and don't worry too much if you haven't made a plan just yet. As long as you start soon, you should be able to tuck away a nice little nest egg for the future.

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About The Author: Questions? Email me at wesley@thewandwgroup.com and visit our website at www.thewandwgroup.com . New Money Talk is a weekly article focusing on retirement, personal finance, and estate planning. Comments and questions are welcome, but because of the volume of email, personal responses are not always possible.