Right then, let’s talk about building wealth in your 30s! You’ve spent your 20s launching your own business, becoming financially independent from your parents, and steadily chipping away at your student loans. While retirement might not be on your radar just yet, your 30s are a prime time to amass some cash.

Technically, you can start building wealth in your 30s as soon as you get your first paycheck while still at school. However, most of us wait until we’re settled in our careers and have access to a workplace pension scheme before we even think about it.

It’s time to level up your finances now that you’re in your 30s! Let’s explore some steps you can take to start building wealth in your 30s.

What is Wealth?

Before diving into building wealth in your 30s, it’s crucial to define what wealth truly means to you. As Henry David Thoreau famously said, “Wealth is the ability to fully experience life.”

In their groundbreaking book “The Millionaire Next Door”, Thomas Stanley and William Danko revealed a surprising truth: many affluent individuals and self-made millionaires shun the flashy lifestyle. They drive second-hand cars, reside in ordinary neighborhoods, and are incredibly cautious with their money.

Social media, television, and film bombard us with a skewed definition of wealth, all glitz and glamour. But true wealth is a personal concept – what does it truly mean to you? Money is undeniably important, impacting every facet of life, but it’s not the sole factor.

Before diving into building wealth in your 30s, take a step back. Define what wealth truly represents for you. How would an affluent life look? How might it impact your relationships, physical health, mental well-being, and overall sense of fulfillment?

Craft a Roadmap for Your Goals

Your 30s are likely brimming with aspirations – buying a home, tying the knot, maybe starting a family. Before diving headfirst, take a moment to list all your financial desires, big or small.

Writing down your financial goals serves a dual purpose: it clarifies your priorities and keeps them firmly in mind. This list will undoubtedly evolve and adapt over time, and that’s perfectly normal. As you compile it, be honest with yourself and shed any financial daydreams that might hinder your progress.

Now, armed with a clear vision of your goals, it’s time to formulate a plan to achieve them.

Craft a Budget

With your goals clearly defined, it’s time to create a budget – your roadmap to financial success. A well-crafted budget gives you a clear picture of your income and outgoings. Remember, the key is to live within your means. Every pound you earn needs a job – some will go towards essential bills, while the remaining portion, your discretionary spending, can be used for treats or saved towards your goals.

Remember, you deserve a treat now and then! Treat yourself like a regular bill – set aside some money each month for the experiences and items on your goals list. By taking control of your finances with a plan, you’ll have more control over how and when you spend your money, leaving room for both saving and enjoying yourself.

Tackling Debt in Your 30s

Your 30s are a good time to take stock of your debts and get them under control. It’s crucial to prioritise paying off high-interest debts, particularly credit cards. While some debts might be cleared quickly, others will require a longer-term strategy.

The average student loan debt in the US is a staggering £32,731 (around $38,736). Refinancing a car loan or student loan could be a way to secure a lower interest rate, making repayments more manageable.

As you chip away at your debts, you’ll free up cash that can be redirected towards your savings goals. Essentially, the money you were previously using for debt repayments can now be used to build your savings pot.

Don’t Neglect Your Future

While company benefits packages might not always spell out every perk, one of the most effective ways to build wealth in your 30s is through contributions to a workplace pension scheme, like a salary sacrifice pension. Explore your options – some companies offer a generous employer match, so investigate if “maxing out” your pension makes sense for you. If your employer doesn’t offer a workplace pension, consider opening a private pension (Personal Pension) or Lifetime ISA (LISA).

Your 30s bring retirement closer into focus. Consider your desired retirement age and start planning accordingly. Remember, retirement plans are about more than just saving money – they’re about investing for your future self.

Supercharge Your Savings

Investing for retirement is one of the smartest moves you can make in your 30s, and really, at any age! Get clued up on the retirement saving options available to you – workplace pension schemes are a great place to start, especially if your employer offers a generous match. Prioritise contributing to these schemes to build a healthy nest egg.

While estate planning might not be the most pressing concern of building wealth in your 30s, it’s a good idea to be aware of it. Life milestones like getting married, having children, buying a house, or caring for elderly parents can be a good prompt to consider your estate planning strategy.

Building Strong Foundations

Our parents, whether intentionally or not, shape our financial attitudes from a young age. As we start earning, spending, saving (or not saving!), habits begin to form that can either propel us towards our financial goals or hinder them. Here are some key areas to consider as you develop your building wealth in your 30s:

Spend Savvy

Understanding your spending triggers is crucial. We’ve all been there – the boredom buy, the impulse purchase, the retail therapy session. Before you reach for your debit card, ask yourself these questions:

• Do I need this, or just want it?
• Can I afford this outright, or will it stretch my budget?
• Does this purchase align with my priorities?
• How many hours will I have to work to pay for this?

Becoming a mindful spender isn’t about deprivation, it’s about aligning your spending with your goals. By being conscious of your financial transactions, you’ll be well on your way to taking control of your money.

Pay Yourself First

Paying yourself first is a powerful strategy for achieving your financial goals. Think of it like an automatic deduction for your future self, similar to how contributions are taken from your salary for a workplace pension scheme.

Setting up a standing order to automate contributions to your savings account is a fantastic way to ensure you’re consistently saving towards your short-term goals. This way, you’ll be putting money aside for your dreams before you even have a chance to spend it on everyday outgoings like rent, bills, or phone contracts.

Align Your Spending with Your Values

As you become more mindful of your spending habits, take some time to reflect on whether your outgoings truly reflect your values. Grab your bank statements from the past few months and have a good look – do you see any discrepancies? Your 20s might have been all about nights out and weekend trips, but entering your 30s often brings a shift in priorities. As you learn how to build wealth, you might find yourself valuing different things now.

Here are some additional points you should consider:

• What experiences or possessions bring you the most joy?
• Are there areas where you’re spending that don’t truly align with your goals?
• Could you redirect some of that spending towards things that matter more to you now?

By aligning your spending with your values, you’ll ensure your money is working towards the life you truly desire.

Keep Your Goals in Sight

Hitting your 30s might mean a bigger paycheque – a well-deserved reward for all your hard graft! But before you rush out and splash the cash, remember there’s a difference between comfort and extravagance.

Lifestyle inflation is a sneaky beast that creeps in as our income rises. The danger lies in letting it lead to overspending.

Treat yourself, by all means, but be mindful of impulse purchases. Every unnecessary expense chips away at your financial goals.

Cultivate a Wealthy Mindset

Building wealth in your 30s starts with believing you deserve and can achieve financial success. However, a “millionaire mindset” is more than just wishful thinking.

Empower yourself with knowledge. Learn the basics of investing and the magic of compound interest. Don’t shy away from calculated risks. While all investments carry some element of risk, understanding the fundamentals and dispelling common investment myths will equip you with the confidence to make informed decisions.

Here are some additional points you should consider:

• Focus on abundance, not scarcity. Believe that there’s enough wealth to go around.
• Develop a strong work ethic and a willingness to learn.
• Surround yourself with positive influences who support your financial goals.

By cultivating a wealthy mindset, you’ll attract the opportunities and resources needed to build a secure financial future.

Multiple Income Streams

Many successful individuals advocate for having multiple income streams. Just like diversifying your investments, spreading your income across different sources can offer greater financial security.

Building wealth isn’t about how much stuff you own, it’s about making smart financial decisions. Consider decluttering your belongings – not only can it free up space, but selling unwanted items can provide extra cash to invest.

Remember, wealth creation is a journey, not a destination. The sooner you start investing, the more time your money has to grow thanks to compound interest. The power of compound interest is like a snowball rolling downhill – it starts small but gathers momentum over time.