How to Build Wealth in Your 30s

Your 30s are a great time to correct any financial hiccups of your younger years, prioritize retirement, and focus on building wealth. You can make key investment decisions now that could pay off in your retirement years.

Building wealth in your 30s requires a steady commitment to responsible spending, keeping debt under control and saving. You should always keep a close eye on your credit, especially now, since it impacts your ability to secure a mortgage on the purchase of a home and finance other large purchases that often come with this stage of life. This is especially important if you’re starting a family, growing a business or trying to reach the next level of your financial goals.

Use this guide to help you discover how building wealth in your 30s could set a solid foundation for the future.

Get control of debt

It can be difficult to build wealth in your 30s if you’re starting with too much debt. So take the proper steps to keep debt under control. Keeping a close eye on your spending, payment due dates and balances — and adjusting your credit card usage accordingly — can help you maintain a healthy credit lifestyle now as you build toward a stronger financial future.

Keep emergency funds on hand

Having money earmarked only for emergencies is a good way to prepare yourself for any unexpected surprises that come your way. A savings account prevents you from tapping into your investments when money gets tight. So if you don’t already have one, start building an emergency fund, it’s important to find someone you trust and feel comfortable with. Ask a family member or trusted friend to recommend a financial advisor or follow these tips for finding one.

Make the most of your 401(k)

Retirement may seem far away, but the reality is that you’re now halfway to typical retirement age. That’s why it’s crucial you participate in any employer-sponsored retirement plan available to you, like a 401(k). If your employer offers one, especially one that matches your contributions up to a certain percentage, take advantage of it by contributing as much as you can. And since most employers automatically deduct the amount you choose from your paycheck and deposit the funds into your retirement plan, the automatic transfers ensure you’re sticking to your investment goals. Remember: the employee’s contribution limit for 2024 is $23,000.¹

Open or increase contributions to an individual retirement account

Individual Retirement Accounts (IRAs) allow you to invest in stocks, bonds, exchange-traded funds (ETFs) and mutual funds. They can play a significant role in building wealth in your 30s, because you can contribute a maximum of $7,000 each year.² So, if you have room in your budget to contribute the maximum amount, do it. When you set up your IRA, arrange to have your contributions made automatically on a consistent schedule to make sure that saving for retirement remains a priority.

Diversify your portfolio

Diversifying your portfolio means not putting all your eggs in one basket, instead you spread out your money across different types of investments, such as stocks, bonds or real estate. Diversifying helps lower the risk of losing everything if one investment doesn't do well. By diversifying, you're not only protecting your money, but you're also increasing your chances of making more money over time. As always, talk to a financial advisor who could help you understand diversification and create a plan that works for you.

Purchase a home

Purchasing a home could play an important role in building your wealth in your 30s. It offers the potential for value appreciation and equity accumulation over time, providing stability and a sense of ownership. However, it's important to remember that home ownership is not suitable for everyone. Be sure to consider factors like the state of the housing market, job security, location and your financial responsibilities to make a decision that best suits your circumstances.

Get life insurance

Life insurance protects the wealth you’re working hard to build for your family should you pass away. It may also be used as an investment vehicle now. Whole, universal and guaranteed life insurance are three types of life insurance policies that accrue cash value in an account that acts like a savings account.³ A portion of your insurance premiums goes into your cash value account, and you may be able to withdraw money or take a loan using that account as collateral. Just remember that taking the cash value of a life insurance policy for other investments could reduce your policy's death benefit.

Sources:
1,2. https://www.irs.gov/newsroom/401k-limit-increases-to-23000-for-2024-ira-limit-rises-to-7000
3. https://www.businessinsider.com/personal-finance/whole-life-insurance-vs-universal-life-insurance-vs-guaranteed-life-insurance

*This article has been updated in 2022. Kia Jackson and Kim Gallagher contributed to this post.