Financial Roadmap: Strategies for Building Wealth in Your 30s
Simply “saving money” might not be the right mindset. Here’s how to start building wealth for your future.
Key Takeaways
In their 30s, many people start thinking more seriously about the future—and how they will pay for it.
Getting into the habit of investing is one of the most important steps you may take for the future of your finances.
Review key ways you can help maximize your investments and build wealth. It’s never too late to start.
When you reach your 30s, growing older “someday” might start to feel like more than just a theory. And life can seem more serious as you progress in your career and take on new personal and family responsibilities. It’s also an age when people start looking to the future.
Building wealth can feel like an uphill battle, especially when it’s in conjunction with student loans, housing expenses and caring for children or parents (or both). But it doesn’t have to be a slog. Here are some tips and strategies to help you start building wealth in your 30s.
Track Your Spending
Before you start building wealth, you may need to find extra funds to put toward investing. If you're like most people, you may not feel there's enough money in your budget to allocate for your future.
The first step is to start tracking how much you're spending and how much you’re earning. Compare the two amounts and figure out if you have a surplus or a deficit.
If you don't have extra money to save, look over your expenses and find where you can make some changes. For example, you may be able to cut recurring subscriptions or shop at consignment stores instead of always buying new clothes.
One way to track spending is to follow the 50-30-20 budgeting rule, which says to spend 50% or less of your salary on needs, 30% on wants and 20% on savings, investments or debt payoff. See how your current spending aligns with those percentages and make any necessary updates.
50-30-20 Makes Budgeting Easier
- 50% on needs
- 30% on wants
- 20% on saving, investing and paying off debt
Increase Your Income
Cutting expenses can sometimes feel like a punishment, but another way to jump-start your savings rate is to increase your income.
Look for overtime or extra shifts.
If you can make time in your schedule for more work, you could see a bump in your paycheck—especially if you’ll be paid at a higher rate.
Ask for a raise.
Create a list of ways you’ve made your company money or saved them money. Then, look at what similar jobs are currently paying. Armed with your research, bring a formal raise request to your supervisor. If your managers don’t agree, it may be time to start looking for a new job.Switch employers.
If you’ve been at the same company for a while, you may be underpaid for your experience. And since prices for just about everything have exceeded normal rates in the past few years, your salary may not be helping you stay ahead of inflation.Find a part-time gig.
If the part-time job matches a hobby, such as working at a golf course, driving cars between dealerships or a side hustle at football or baseball games, you may enjoy it—while making more money.
To Build Wealth, Commit to Getting Started
A basic goal for how much to invest in your 30s is 10 – 15% of your income. As you get older, the percentage will increase. If you can’t afford to do that quite yet, consider starting with an amount you can afford.
One harmful misconception is that you need a large sum of money to begin investing. The reality is that you may be able to start with lower minimums— with some caveats, such as setting up recurring monthly investments. Financial companies with low or no minimum investments may have other fees (such as brokerage fees or inactivity fees) which you’ll want to pay attention to.
As you increase your income or reduce your expenses, commit to funneling those extra funds toward your investments. For example, if you pay off a loan, add the monthly payment amount to your monthly investments. If you get a raise, immediately increase your contributions to account for the higher salary.
Contribute to a Retirement Account
A 2023 survey1 found that more than 96% of companies offering 401(k)s matched contributions that their employees made to their retirement accounts. These matching contributions may be as high as 100% of the employees' contributions, usually up to a certain limit.
A basic guideline is to always save enough to get the full employer contribution. It’s not exactly “free money,” but every dollar you receive from your employer is one more dollar you don’t have to save yourself.
Employer Retirement Plans
For 2024, the annual maximum contribution limit for 401(k) and some other retirement plans is $23,000 for employees. Including employer contributions, the maximum annual limit is 100% of an employee's salary or $69,000 ($76,500 including catch-up contributions for those age 50 and older), whichever is lower.
Unless you have high-interest credit card debt, you may want to consider contributing enough to your 401(k) to get the match.
Traditional and Roth IRAs
If your company doesn’t offer a 401(k), you may consider an Individual Retirement Account (IRA)—traditional or Roth. In your 30s, a Roth IRA may be a good choice when you have a long way to go until retirement. With a Roth, the compound interest can grow tax-free rather than tax-deferred like traditional IRAs (where you pay taxes when you withdraw the money).
In 2024, the maximum annual limit for IRA contributions is $7,000 ($8,000 with catch-up contributions).
Small Business Retirement Plans
If you are self-employed or own a small business, you could also consider a SEP IRA, which has a $69,000 annual contribution limit in 2024, depending on your financial situation.2 SIMPLE IRAs are another option for small businesses with less than 100 employees.
Deciding between a SEP or SIMPLE IRA depends on your company size and flexibility of contributions, among other things.
You Don’t Have to Be Too Conservative
When you're in your 30s, you may consider a more aggressive investment strategy by taking on more risk. For example, you may want to allocate your portfolio to more stock funds, which carry more risk, than to bond funds, which typically have less risk. But having both is important for practicing the important strategy of diversification—or spreading your money over several different kinds of investments to help manage market volatility.
Taking on a bit more risk when you're young has the potential to pay off when you’re older. Plus, you have the luxury of time for a recovery if the markets should tank.
On the flip side, if you're too conservative and keep all your money in cash equivalent investments—like money markets—it could hinder growing your money into a nest egg you can put toward long-term goals like retirement.
Knowing how much risk to take with your investments is an important factor in determining what to invest in. Your level should be based on how much time you have until you need the money and how much risk you can comfortably live with. If you’re not sure, our investment consultants are here to help.
Find the Right Financial Professional
If you’re not sure how to embark on a wealth-building plan, you can enlist the help of a qualified professional. A financial advisor can help you pick the right investments, decide what kind of retirement account fits your needs and recommend a monthly contribution amount. You’ll also want one that has fiduciary accountability to you, which means the advisor can only recommend products that are in your best interests.
Be sure to do your homework and ask the right questions when seeking a financial professional.
While you don’t need a professional financial planner to invest, it can help you get off on the right foot. You are not obligated to see the professional at a specific interval, but a periodic checkup may be appropriate just to ensure you’re on track to retire at your desired age.
Online digital advice is another option. These “robo-advisors” offer automated and simple hands-off investing for a lower fee, especially if you’re not looking for an actual financial professional. Keep in mind that this type of advice might not suit your needs if you have more complicated finances and goals.
Take Advantage of Your 30s
This decade of life is when many people start to look ahead and think about how to save for long-term goals. It may feel challenging to save and build wealth, but at this stage in your life, just getting a start, cutting back in some areas and contributing in others can go a long way toward helping maximize your investments. Your future self will thank you.
Need Help With Your Wealth-Building Plans?
We can get you started on the next phase of your financial life.
Plan Sponsor Council of America, 66th Annual Survey of Profit Sharing and 401(k) Plans, November 2023.
SEP Contributions, Irs.gov, June 2024.
This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, employment, legal or tax advice.
You could lose money by investing in a mutual fund, even if through your employer's plan or an IRA. An investment in a mutual fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Please consult your tax advisor for more detailed information regarding the Roth IRA or for advice regarding your individual situation.
Taxes are deferred until withdrawal if the requirements are met. A 10% penalty may be imposed for withdrawal prior to reaching age 59½.
Diversification does not assure a profit nor does it protect against loss of principal.
Generally, as interest rates rise, the value of the bonds held in the fund will decline. The opposite is true when interest rates decline.
Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.
Digital Advice is provided by American Century Investments Private Client Group, Inc., a registered investment advisor, for clients with a minimum $10,000 investment. Digital Advice provides discretionary investment management. American Century does not charge an advisory fee for this discretionary advice. The Journey Portfolios offered through Digital Advice all contain American Century exchange traded funds (ETFs) and mutual funds, which charge investors investment management fees, underlying fund fees, and other administrative and servicing fees. Depending on the different weightings or allocation of such ETFs and mutual funds, your fees for investing in a Journey Portfolio will vary, but generally range from 0.25% to 0.40% per year. American Century Investments' financial consultants do not receive a portion, or a range of the advisory fee paid by clients. Client-oriented trades outside of our recommendations, personal consultations by phone or in-person with our financial consultants, and other activities like wire transfer fees are offered for an additional fee.
All investing involves risk.