5 Tips to Save You Financial Heartache in Your 30’s

My Money My Future

Ramona Ortega is a former corporate attorney and founder of My Money My Future, a personal finance platform on a mission to empower Millennials to manage their money with confidence.

We all make mistakes in our 20’s but one of the most regrettable ones relate to our finances, so let me save you some financial heartache.  Here are 5 easy to follow tips that will guarantee you are not trippin about cash in your 30’s.

As with most things in life, we over-complicated personal finance, and because it seems like a pain in the ass, we end up not taking care of business but the first rule of managing your money is keeping an eye on it, so that’s why we start with budgeting.

  1. Get on a Budget and Don’t Be Afraid to Check Your Account

Like most habits, the more you do it, the easier it becomes – same is true with budgeting.  The simple budget formula for any income is simply 50/20/30.  It breaks down like this; no more than 50% of your income should go to “fixed” costs like rent, bills–things you must-pay; 20% should go to your savings, like retirement and emergency savings; lastly no more than 30% should go towards “spending money” or “flex” costs.  Of course, the problem is that most of us never know our numbers, so we just spend and hope there is enough to pay the bills. Sign up for the My Money My Future web-app and get your free automated budget tracker.

  1. Start funding Your Emergency Savings Account

An emergency savings is a must have at any age, but the sooner you get started the better.  Ideally, people should have six times their monthly income saved but we all know that is a high bar to reach, so start with incremental amounts like $1000, then three times your monthly income.  Make sure to keep this money in a separate account to ensure you don’t dip into it for non-emergencies.

  1. Take Care of Your Credit

One of my biggest regrets of my 20’s was not taking care of my credit. You don’t realize how much of a penalty you pay for bad credit, but let me tell you, it is a lot. Your credit score is based on a number of factors but the two most important are 1) your credit utilization rate and 2) late payments.  Keep you credit card spending to below 30% of your credit limit and make sure to automate your payments.  Download the My Money My Future financial 360 to track your credit utilization.

  1. Open up a retirement account

Listen very closely, it is not how much you invest, it is how long you invest, so if you want to start building some wealth, no matter how broke you feel, start with putting away small sums of money away in your 20’s and watch compound interest do it’s magic. Even if you do not have a 401(k) offered through your employer, you can still open up a Roth IRA. There are now a number of low cost options to set up these types of accounts. See A Plan for Your Roth IRA.

  1. Know Your Net Worth But Don’t Let it Define You

Buy assets, meaning things that will increase in value (yes, ladies, even some purses are considered assets because they are easily convertible into cash) and be mindful of your debt.  Your net worth is the sum of your Assets minus your liabilities (debts).  Spend your money on experiences not things. Prioritize going on trips and doing things that you will remember, unlike those expensive late night sprees at Target.


Written By: Ramona Ortega 

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