Money habits every 30-something should have

Whether you’ve just turned 30 (happy birthday) or you’re planning for the future, there are a few fundamental money habits that every 30-something should have.

By your 30s, you’ve ideally spent some time exploring the kind of career you’d like. Or at the very least, you’ve tried a few things and have (hopefully) landed somewhere stable. If your 20s were for experimenting with your career or spending your entire paycheck every month, your 30s are for stabilising your finances and starting to grow wealth.

Between growing a generous nest egg and setting yourself up for retirement, let’s explore some key habits you could consider taking up for your financial health.

Money habits for your 30s

Spend less than you make

While this can be easier said than done in a time of rising inflation and mortgage rates, you may want to look at your 30s as a time to spend less of your income than you make. This means it’s time to muster the self-control to live below your means.

If your goal for your 30s is to grow wealth, now is the time to get your spending habits under control. Are you addicted to online shopping? Try and set yourself a challenge of buying only one new item a month or quarter. In fact, some people recommend going to the extreme of challenging yourself to not buy anything new for a year.

You also do not have to say yes to every single event that comes your way, as endless dinner and drinks out will easily start to eat at your savings. That doesn’t mean you shouldn’t still socialise, but instead consider more cost-effective options for seeing friends, such as organising a pot-luck dinner at home. It’s still important to splurge and have fun, but unlike in your 20s, that doesn’t need to be a multi-week scenario when you’re trying to spend less than you make.

Make a budget, and stick to it

If you’re one of those people who cringes at the thought of looking at your bank account, your 30s are the time to bite the bullet and create a budget that works for you.

Keep in mind that this really does need to be a budget that works for you and not someone else. You’ll find endless budgeting tips online, and it’s worthwhile trying a few different ones out to see what suits your spending patterns and the frequency in which you are paid.

For example, some recommend the 50/30/20 rule, in which 50% of your income goes towards needs (rent, bills, groceries), 30% goes to your wants (activities and dinners out), and 20% goes towards savings and debt repayment.

However, you may find this too constricting in months where you have, say, an unexpected expense or higher-than-average energy bill. Instead, you may prefer to have a revolving monthly budget, where you adjust where your money will go based on the immediate expenses, savings goals, and any events or splurge purchases you want to make.

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Pay off your debts

Repeat after me: the debt you racked up in your 20s is not following you into your 30s. One of the greatest money habits you can take up is learning how to effectively pay off your debts, and live debt-free (excluding a mortgage, which is considered “good debt” to have in your 30s).

If you have an outstanding credit card balance, look at your budget and see if you can make more than the minimum repayments required. For example, if you were paying just the minimum on a $10,000 credit card debt with a purchase rate of 18%, it would take over 43 years to pay off. However, with higher repayments of $500 a month, you’d knock out that debt in just two years. 

If you have multiple forms of debt, there are a few strategies to consider:

• Pay the debt with the biggest interest rate first, so you do not accrue more debt at a faster rate.
• Pay the largest debt first, giving you more breathing room in your budget.

Whichever option you choose, take the time to assess your budget and determine how you can best pay off your debts. And if you know that you struggle with accruing interest on credit card balances, consider low-rate credit card alternatives, or even look at whether a no-interest buy now, pay later platform could better suit you. 

Save an emergency fund

Once you’ve found yourself in a position where you are spending less than you make and/or you’ve got your budget under control, you can prioritise your next goal: growing an emergency fund.

Start by saving a month’s’ worth of your paycheck, then keep going until you reach three months. This can be a fantastic buffer for worst-case scenarios, such as a sudden job loss or injury. In an ideal world, you’ll eventually save a year’s’ worth of your income throughout your 30s.

And if you’ve been with the same savings account since you were a kid, consider looking at the market for more competitive, high interest rate options. Chances are that you’re earning a lower interest rate than you could be.  

Consider investing

If you’ve been nervous or unsure about growing an investment portfolio up until now, your 30s could be the right time to consider exploring some options for investing. Putting your spare cash into one or more investment options could be a competitive way to see your nest egg grow – especially compared to parking it all in a humble savings account.

There are a wide range of options to consider, from lower-risk traditional investments to high-risk new technologies. RateCity’s guide to the top investments for young Australians may be helpful here, and recommends the following as potential investment options:

• Equities
• Managed/index funds
• ETFs
• Property
• Cryptocurrency
• P2P lending
• Superannuation
• Gold

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In your 20s, retirement can feel like a literal lifetime away, but in your 30s it’s worthwhile making planning for it a key money habit. It’s crucial you act now rather than later, as the earlier you prioritise your superannuation, the longer you have to grow your balance. 

According to the Association of Superannuation Funds of Australia (ASFA) from their paper released March 2022, the average account balance for men aged 30-34 is $51,175, and for women aged 30-34 is $42,240. For your late 30s, the average balance for men is $83,723 and $65,220 for women.

Average superannuation account balance: ASFA

Source: ASFA Research Paper, March 2022.

If your superannuation balance does not look like it could match these figures, now may be the time to consider your options:

• Find lost super

First of all, if you’ve never checked for lost superannuation funds, today is the day to do so. That first job you had in university could have paid you superannuation, but if you’ve not seen or thought about it in years, the balance has likely been eaten away at by fees. That is money that you earned for your retirement that deserves to be in your main superannuation account. 

You can find lost super through the Australian Taxation Office (ATO). Simply log in or create an account with MyGov, link your MyGov account to the ATO and then select super. This will show you if you have more than one superannuation account. Then, you may easily consolidate your super into a single fund.

• Compare super funds

Just as you should compare cars before you drive the first one you see off the lot, you should also consider comparing your superannuation funds. Your 30s are the best time to ditch complacency and do your research to ensure your financial products are offering you the best possible deal for your financial situation and goals. 

Compare super funds using RateCity’s helpful comparison tables, and view past returns and fees, to get a better idea of which fund may suit you.

• Consider making contributions

You could also consider putting some additional pre-tax income towards your superannuation balance to help it grow, on top of the compulsory super you pay, also known as salary sacrificing.

Salary sacrificing, or making concessional contributions, can go a long way in boosting your final balance for retirement. You may also qualify for a lower tax rate by making concessional contributions into your super account.  

This can also be a competitive option to consider if you need to take time off work for major life events, such as having a child or caretaking a family member, and know your super balance won’t grow in that time.

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