Six Money Messes to Clean Up Before Your 30s

For both my husband and me, reaching our mid-20s seemed like a huge “adult milestone.” For the first time in our lives, we had “real jobs” – the kind with a 401(k) match, health insurance, and paid time off. Plus, we had purchased our first home, took out a loan for an upgraded car, and started mentally preparing ourselves to have a family.

We were no longer eating cereal for dinner, sleeping in until noon, or asking our parents for advice all the time. Nope, we were finally real adults.

We thought we had it made, and proceeded through life without a care in the world. And then it happened: At age 28, I became pregnant with our first child.

All of a sudden, our world was turned upside down.

“Do we have all of our ducks in a row?” I would ask my husband. “Can we truly afford to have kids?”

Something about having a third person in the family to care for made us stop and take a look at how we had our lives set up. And for the most part, we were happy. But there was still that creeping feeling that we didn’t have every last detail squared away – that we had loose ends to take care of before we reached our 30s.

So, task by task, we started getting our financial lives in order. And by the time we had our second child, we had most of the big stuff – the potential money messes and financial emergencies – taken care of.

“Better late than never,” I thought. Even though our kids were the catalyst behind our decision to prepare our finances for the future, I was happy to have most of it behind us.

According to Katie Brewer, Certified Financial Planner and Financial Coach at, the fact that we didn’t do things like create a comprehensive plan for retirement, buy life insurance, or pay down all of our debts until our late 20s is fairly typical.

Young people sometimes suffer from a “Superman complex,” she says. Since we think we are invincible, we often put off the “big decisions” that matter the most.

“Themes such as ‘YOLO’ have penetrated the millennial generation, and saving isn’t the cool hipster thing to do,” says Brewer.

And that’s part of the reason so many young people put things off. When you’re young, you think you have more than enough time to make up for it.

Fix These Money Messes Before They Turn Into Financial Emergencies

Unfortunately, that mentality can wreak havoc if you allow it to follow you into your 30s, which is why many experts suggest you get some of life’s biggest decisions out of the way before you get there. Here are some of the most important money issues to tackle while you’re still in the best position to do so:

Create a Comprehensive Retirement Plan

It’s easy to stash 5% of your pay away in your work-sponsored 401(k), but will it be enough? Maybe, maybe not; as CFP Katie Brewer says, it all depends on your goals.

According to Brewer, almost everyone should shoot for a savings rate of at least 10-12%, not counting their company match. If you want to retire earlier though, you want to start saving more like 15%-20% of your income – and maybe even more. It all depends on when you want to retire.

Of course, there are challenges that come with saving that much for retirement, says Brewer.

“Unfortunately, a lot of people in the their late 20s and early 30s are still battling student loan debt and are accumulating expenses instead of savings,” she says. “This is the age when weddings, baby showers, and first-time home buying becomes a priority instead of retirement savings.”

That’s why Brewer suggests a simple approach: “Set it and forget it,” she says.

“Sign up for your 401(k) and have it automatically increase every year. Set up an automatic draft for savings the day after your paycheck hits, and have it go into a separate bank so you can’t see it when you are at the ATM,” Brewer recommends.

And the sooner you start, the better. Why? Two words: compound interest.

“Due to the magic of compound interest, small, steady contributions turn into a significantly bigger number over time.”

One of the simplest, lowest-cost ways to automatically invest for retirement is through an online financial advisor. Check out our in-depth reviews of Betterment, Wealthfront, Acorns, and Personal Capital.

Buy Life Insurance

When you’re young, healthy, and childless, life insurance can seem like a waste of money and time. But that kind of thinking is wrong, says Mack Dudayev, CEO of Why? Because life insurance rates are primarily determined by your age and health — which happen to be a young person’s biggest assets.

“Most likely, you will never be as young or as healthy as you are now,” explained Dudayev. “So it’s best to get a low premium locked in early.”

And the longer you wait, the bigger chance that a health condition you acquire could make life insurance much more expensive – or impossible – to get.

“If you were to develop a serious medical condition, you’d no longer qualify for coverage — which, ironically, is when most people start thinking about life insurance,” notes Dudayev.

Whether to buy term life insurance, variable life insurance, or whole life insurance? Now that’s an entirely different issue. Term life insurance is the cheapest, and most often recommended, option. Your best bet is to weigh all your options now, while you’re young, so you can be properly insured should you ever need it.

Create a Legal Will

According to financial experts, wills are not just for rich people; they’re for everyone. Because when you don’t have one, you are essentially giving up control of your assets and letting someone else decide who gets to take care of your children. Now, that’s scary.

I have to admit, we were a little late to this game. But eventually, we set up our own will and testament through The process was simple and painless, plus it was fairly inexpensive to get our will set up and looked over by a qualified professional.

According to financial firm Raymond James, the main reasons to get a will are:

  • To set up your estate the way you want, instead of how your state wants it to be: Since state laws differ, it’s important to create a will that defines your true wishes. Otherwise, your estate and assets will be divvied up based on your state’s interpretation of “interstate success” through probate court.
  • To name a guardian for your children: If you don’t name a guardian in a legal will, a probate court will decide who takes care of your children. Enough said.
  • To set up an executor for your estate: In the absence of a legal will, a probate court will be in charge of assigning an executor for your state. Since that person will make the bulk of the decisions regarding “who gets what,” you will want to have a say in that.
  • To speed up the process and “get it right”: Probate courts can take months to sort out your case if you don’t have a will. Setting one up, on the other hand, expedites the process and removes any question as to what your final wishes really were.

According to Raymond James and other experts, you should update your will as your situation changes, or at least every few years.

Kill Consumer Debts

While your 20s are a time of carefree wonder, getting older has a way of making life seem more serious, and more complex. By the time you hit your 30s, you might have a home to care for, children to save for, and the capacity to finally understand that retirement is not that far away after all.

The ultimate way to prepare for – and hit – your 30s is to start things off strong with a debt-free lifestyle. Because everything you want to do in your 30s – bump up your retirement savings, go on family vacations, buy your dream home – will be immeasurably harder if you’re still plugging away at consumer debts. The answer: kill them.

There are numerous ways to make this happen. For some ideas, check out some of our past posts on killing your debts once and for all:

Build an Emergency Fund

If you didn’t need an emergency fund in your 20s, you will need one in your 30s. When you have a home, a couple of cars, a few kids, and who-knows-what-else, something is bound to go wrong. Trust me, it never fails.

Most experts suggest keeping at least three to six months of expenses tucked away in a high-interest savings account or easy-to-access investment vehicle, although some people choose to stash away more or less depending on their situation.

If you still don’t think you need one, read “20 Reasons You Need an Emergency Fund.” Then let us know what you think.

Start Saving for College

Remember that compound interest thing we talked about? The same principal applies to college savings. If you’re able to start stashing away small sums of money when your children are young, you may not need to panic when they turn 16 and start thinking about their options.

I’ve seen enough people do the latter to know that’s not how I want to end up. And with any type of college savings vehicle, or a college savings 529 plan, you can do the same. Just like your retirement plan, it’s fairly simple to set up a direct deposit into a plan or account marked for college savings. And if you can make it automatic, it’s even easier!

Also make sure to check with your state to see if they offer any incentives. While many states offer nothing, some pony up tax credits for families who stash enough money away. I know in my state of Indiana, we enjoy a 20% tax credit on the first $5,000 we save in our 529 plan each year.

Your 30s Will Be Here Before You Know It

When you’re in your mid-20s, it always seems like you have so much time – time to explore, time to find yourself, and time to save for a future that is so far away. But as you get older, you may find that you don’t have as much time as you thought – and that those big milestones creep up a little faster with each passing year.

Taking some time now to get the “big stuff” squared away – simple money issues that could potentially turn into financial emergencies down the road – could pay huge dividends later on. Because, like it or not, adulthood is hard enough. Nobody needs to spend their lives worrying about what will happen when they die, whether they’ll have enough money to retire, or whether they’ll be able to help their kids through college.

By making the right moves now, you can mostly put those issues behind you and focus on the future. And you can do it with the carefree wonder of your 20s. Because once you clean up the money messes of your 20s, you’ll have nothing to fear.

Did you get most of these “financial emergencies” taken care of before you turned 30? What would you add to this list? 

Holly Johnson

Contributing Writer

Holly Johnson is a frugality expert and award-winning writer who is obsessed with personal finance and getting the most out of life. A lifelong resident of Indiana, she enjoys gardening, reading, and traveling the world with her husband and two children. In addition to The Simple Dollar, Holly writes for well-known publications such as U.S. News & World Report Travel, PolicyGenius, Travel Pulse, and Frugal Travel Guy. Holly also owns Club Thrifty.