Guide to Financial Planning in Your 30s

What is financial planning in your 30s? This is the decade when you’ll likely start to make important money decisions . Here’s what to know about financial planning in your 30s.

Couple embracing on the beach thinking about financial planning in your 30s.

Being in your 30s is an exciting time of life. It’s often the decade when you start to meet many of your personal milestones, whether that’s getting married, buying a first home, starting a family or advancing in your career. These are all big money moments, and financial planning can help you achieve these goals while helping you feel more confident about your money. 

What is financial planning in your 30s all about? We’ll take you through several key planning steps that will lay a good financial groundwork so you’re ready to tackle your finances in your 30s, 40s, 50s and beyond. 

Section 01 Know where you are

Webinar Replay: 5 Financial Planning Steps You Should Take in Your 30s

Your first step to financial planning in your 30s is to understand where you are today and where you want to be in the future. This will be a pivotal decade for you, so it’s important to take stock of where you are: How much money do you have coming in, where is it going, and how much of it are you holding onto every week, month or year? What does your financial picture look like right now? 

Create a budget

If you don’t already have one, create a budget. Creating a budget serves two purposes. First, it gives you a view into how you’re currently spending your money. Second, it will help you make decisions about how you allocate your money toward the things that are most important to you now and in the future.  

When you set up a budget, you’re essentially trying to get a view of your cash flow. First, add up your monthly take-home pay from all sources of income. Then, add up all of your monthly expenses and group them into these three categories: 

  • Fixed expenses 

    Your fixed expenses will include anything that you need to pay on a recurring basis; they are likely to be expenses essential to your daily life. This might include things like your mortgage/rent, utilities, phone, internet/cable bill and car/home insurance.  

  • Financial goal contributions 

    This is money that you dedicate to financial goals. This category could include things like saving for a down payment on a home, retirement or college, as well as extra payments toward debt. It also includes any money you’re putting into an emergency fund or toward life insurance premiums.  

  • Discretionary expenses 

    Discretionary expenses are basically everything else. This is your “fun money” and will often include things like entertainment, splurges, eating out or going on vacation. Most likely, it will be the category where you have the most flexibility to free up money in your budget.  

Once you have categorized your spending, it’s time to crunch some numbers to determine how much you’re spending within each bucket. While everyone’s budget will be different, as a general rule, aim to spend roughly the following percentages of your take-home pay on each category.  


On fixed expenses 


On goal contributions


On discretionary expenses

Understand your net worth

The term “net worth” may sound like it applies more to Jeff Bezos than to you. But net worth doesn’t have to be a number in the millions or even the tens of thousands. Everyone has a net worth. So you might be wondering, “How do I calculate my net worth?” Here’s what you do: 

  • Add up your assets. This should include money in your checking, savings and investment accounts, as well as the value of any physical items you may own, such as your home, automobiles, jewelry and other valuables. 

  • Subtract your liabilities. This is essentially any debt that you carry, including credit card debt, student loans, auto loans, personal loans and mortgage balances. 

The resulting total is your net worth. 

Section 02 Think about goals for your 30s and beyond

Once you know where you currently stand, you can start to dream about where you want to go. This is the fun part. Ask yourself questions like: 

  • Do I plan to get married?

  • When do I want to start a family?

  • Do I want to buy a home?

  • Do I dream of retiring early?

  • How often do I want to travel?

  • Do I plan to pay for my kids’ college?

These are all big goals you’ll want to plan for financially. Getting a sense for when you might want to reach each goal can help you make choices about how to use money you’ve already saved and how to continue saving and growing your money to help meet those goals. Knowing where you are starting from and where you wish to go will allow you to create a financial plan to get there.

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Section 03 Protect what you have

It can be tempting to jump right into a plan to invest your money for the future. But part of getting to where you want to be financially is including a plan to protect your finances so that life’s ups and downs don’t throw you off course. This is also a time of life when you’re likely to grow your family, which makes the protection component a critical part of financial planning in your 30s. 

Here’s what to consider. 

Start an emergency fund or build the one you have 

An emergency fund is exactly what it sounds like: A checking or savings account where you keep money that you can tap in the event of an emergency, such as a surprise medical bill, car or home repair, job loss or other major unexpected expense. Most financial experts recommend that you eventually have enough money in your emergency fund to cover about six months’ worth of expenses.  

If you started your emergency fund in your 20s and have it fully funded, check this off your to-do list. If it needs to be padded further (especially as your expenses have likely grown), work an amount into your budget that you can set aside into your emergency fund each month until it is fully funded. And if you don’t have an emergency fund at all, that’s okay, too. Now is the time to start one.

If you set aside $25 a week, you’ll have $1,300 in your emergency fund after a year. Bumping that up to $100 per week would get you to $5,200 in a year.

Planning for Disability

If you get sick or hurt and cannot work for an extended period of time,  it is important to have a plan to help you make up for some of that lost income. This can protect your financial plan by helping you to avoid having to draw down savings that are meant for other goals.

Many employers offer affordable short- and long-term disability insurance to their employees, but in many cases it will cover only about half of your income. Now that you’re in your 30s, it’s a good idea to review what coverage you already have and start planning for what you may need.

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Life insurance

In your 30s, it’s highly likely that your family will grow or that you’ll have more people who depend on you, whether that’s a spouse, children, a disabled sibling or aging parents. That makes life insurance another critical layer of protection for your plan. It will ensure that your loved ones will be taken care of even if you’re no longer there to support them.

But how does life insurance work? The two main varieties of life insurance to consider are term and permanent. Both pay out a death benefit to your beneficiaries in the event of your death, but there are important differences:

Term life insurance offers a death benefit for only a set number of years (the term). If you die within that time frame, your beneficiaries will receive the death benefit. After your coverage expires, there’s no payout to your beneficiaries.

Permanent life insurance covers you for life. Your beneficiaries will receive the death benefit no matter when you die. Permanent life insurance also accumulates cash value that you can eventually access at any time during your life, for any need.

Because of its additional benefits, permanent life insurance is more expensive than term for the same size policy. That’s why many people in their 30s will use a mix of term and permanent insurance to reach the death benefit amount they want while still getting access to what permanent insurance has to offer beyond the death benefit.

Converting term insurance

Many term insurance policies allow you to convert some or all of your policy to permanent insurance at some point in the future, regardless of changes to your health. This can be a great way to add the benefits of permanent life insurance over time.

So how much life insurance should you get? Our life insurance calculator can help you get a sense of what you might need based on your unique situation.

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Section 04 Grow your wealth

Once you’ve laid the groundwork to protect your financial plan, it’s time to start taking steps to grow your wealth. Depending on your financial situation, this may consist of a combination of paying down debt while also saving and investing for various goals.

Make a plan to pay down debt

When you’re in your 30s, it’s not unusual to have credit card or student loan debt. If that’s your situation, then it’s a good idea to plan for how to get out of debt. Doing so can help position you for future financial success, because debt can be a headwind to reaching your financial goals. Plus, as you pay down your debt, you’re helping to grow your net worth.

Good debt vs. bad debt

Before you aggressively start paying down your balances, it’s important to realize that not all debts are created equally. This is where the concept of good debt vs. bad debt comes into play.

Good debt

Good debt tends to involve lower interest rates and is typically used to reach a major goal or milestone. Student loans and a mortgage are examples of good debt.

Bad debt

Bad debt carries higher interest rates and is often used to finance purchases that don’t provide much value back to you. Credit card debt is an example of bad debt.

If you find that you carry both good and bad debt (as most of us do), then you’ll probably want to prioritize paying down the bad debts first.

Debt repayment strategies

When it comes to paying down your debts, there are a number of different strategies to consider. Two of the most popular debt repayment strategies are the debt snowball and the debt avalanche. Here’s how they work.

Debt avalanche

  • Organize your loans by interest rate, from the highest to lowest.

  • Pay minimums on all your loans, but devote extra payment to the highest interest rate loan.

  • Once you’ve paid off that debt, move on to the next highest interest rate until that’s paid off, and so on.

  • If you do the math, this is the method that will help you pay the least in interest.

Debt snowball

  • Organize your loans by balance size, lowest to highest.

  • Pay minimums on all your loans, but put any extra payment toward the lowest-balance loan first.

  • Once you’ve paid off that loan, move on to the one with the next lowest balance.

  • This method gives you quicker wins, which can help keep you stay motivated as you pay down your debt.

Your investments

By the time you’re in your 30s, you’ve likely starting saving for retirement, or maybe you’ve even started putting money away into an investment account. Investments are a great way to save for big, long-term goals because they help your money grow over time. Now is a good time to brush up on (or learn) investing basics and make sure that you’re putting away the right amount in the right places based on your goals.

Are you saving enough for retirement?

Our retirement calculator can show whether you’re on track for the retirement you want.

There are several big goals that people often reach with the help of investments. Some financial goals, like retirement or saving for college, even have special accounts that qualify for tax advantages, which is why they are known as “qualified” accounts.

Investing for retirement

This is one of the most common reasons that people choose to start investing, especially if you have access to a retirement account like a 401(k) or 403(b) through your employer.


  • Money you contribute is pre-tax.

  • You won't owe tax as your money grows.

  • You'll pay ordinary income tax on any money you withdraw in retirement (age 59½ or older).

  • At age 72, you’ll be required to start taking a certain amount of money from your account if you haven’t already. This is known as a required minimum distribution, or RMD.


  • Money you contribute is post-tax.

  • Your money grows tax-free.

  • You won’t have to pay any tax on the money you withdraw in retirement (age 59½ or older) so long as you’ve had the Roth account for more than five years.

  • There is no requirement to withdraw money from a Roth IRA while you are alive.

  • There are income limits that prevent high earners from contributing directly to a Roth IRA (Roth 401(k)s have no income limitations).

Invest for college

If you have children or plan to in the future, your 30s is a great time to begin saving for their college education. After all, college is expensive, and it’s likely to get more expensive as time goes on.

As with retirement, there are a number of different options you can use to begin saving for college, including:

  • 529 College Savings Plan
  • 529 Prepaid Tuition Plan
  • Coverdell Education Savings Account
  • Uniform Gifts to Minors Act (UGMA) Account
  • Uniform Transfers to Minors Act (UTMA) Account

Non-qualified investments

We mentioned above that accounts designed specifically for retirement and saving for college are called qualified accounts because they qualify for special tax benefits. Regular investment accounts don’t have these special tax perks, so they are known as non-qualified accounts — but you can still use them to save for any long-term goal, typically one that’s more than three to five years away. Some common goals include:

  • Paying for a wedding

  • Buying a house

  • Travel

  • Starting a business

  • Taking a sabbatical

What do you want to invest for?

Our financial advisors can help you build an investment strategy designed to reach your future goals.

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Section 05 Put an estate plan in place

Many people think estate planning is something you do when you have tons of money. In reality, an estate plan spells out things like what happens for your loved ones if you die, who can make medical or financial decisions on your behalf, and how you want any money that you leave behind to be used.

It’s not fun to think about, but it’s a critical part of financial planning. If you don’t have an estate plan yet, your 30s are a critical time to put one in place.

An estate plan should include:

  • A will,
  • Beneficiary designations,
  • Financial and health care powers of attorney, and
  • A health care directive (also known as a living will).

Hopefully, you won’t need to leverage any of these documents for decades to come. But taking the steps now to generate an estate plan will take pressure off your family in the event that something were to happen to you. An estate plan helps make a difficult time a little less difficult.

Section 06 Enjoy your money

Many people think financial planning is all about making sacrifices today in order to save for the future. The reality is that financial planning is about prioritizing what is most important to you and making a plan to get there. It actually helps free you to spend your money today without feeling guilty about shortchanging a future goal.

If you haven’t started a financial plan yet, there’s no better time than now to start. If you do have a plan, revisit it to make sure it’s focused on what you want in your 30s. A financial advisor can  help you build or revisit your plan. Here are some questions you may want to discuss with your financial advisor when you’re in your 30s.

Section 07 Conversation starters with an advisor

  • How do I prioritize the goals that I’m saving for today?

  • How much should I save for each of my goals?

  • Should I contribute to a traditional or Roth retirement account?

  • What should I invest in when I’m in my 30s?

  • Should I get permanent or term life insurance?

  • Which debts should I focus on paying down first?

*All investments carry risk, including potential loss of principal invested.