Daily Money - Issue #137: III'm tuuurning 30

March 30, 2022 • Issue #137

Hi y’all —

Happy Wednesday. As I write this, I am eating a bowl of spaghetti it took me over an hour to make because I ignored the instructions in the recipe, burned the meatballs and set off all the fire alarms in my house — twice. Then I discovered I can’t reach the button to turn them off EVEN WHEN I’M STANDING ON A CHAIR.

Sometimes I feel like I’m killing it, and sometimes I feel like I’m in no place to be giving anyone advice at all. Clearly I’ve got a lot to improve upon.

Last week, I picked experts’ brains about what I should have accomplished financially by the time I turn 30 on April 14. (Short answer: Set up a budget, get my debt under control and start an emergency fund.) Now, I’m pivoting to the future.

One goal I have for this next decade of my life is to learn how to cook spaghetti without setting the house on fire. Another is to get taller. But what money tasks should I tackle — and hopefully achieve — in my 30s?

Brent Weiss is about to turn 40, so he was the perfect person to talk to. Weiss, a certified financial planner (CFP) and the cofounder of Facet Wealth, told me the best thing he did when he was my age was to get serious about setting goals.

“Who do you want to be? What do you want to leave behind? Where do you want to be in three or five years?” he says.

Only then, he says, can I start to figure out the steps I'll need to take to get to the life I want — not the one social media or my family or even Money tells me I quote-unquote should want.

“Understanding what the right track is for you is arguably the most important thing you can do," Weiss says. "If you're not putting money towards the things that give you excitement, joy or fulfillment, a) you're never going to stick to it and b) you're not going to enjoy the process.”

From there, the focus should be on evaluating whether I’m headed in the right direction. Forget other people’s paths or expectations. Are my money habits moving me toward my destination?

Speaking of destinations, Mark Reyes, a CFP with Albert, says my 30s are an ideal time to start saving for retirement in earnest.

There’s a three-pronged approach here. First, I should set up a 401(k) through my employer and take advantage if they offer matching. Otherwise, I’m leaving free money on the table.

I can also look into setting up a Roth IRA, or individual retirement account, where my contributions are taxed when I put them in. Because I’ll likely earn more money later in life, it’s important to save what I can in that account now before I enter a higher tax bracket.

Third, I may want to fund a health savings account, or HSA, and try not to spend the money while I’m young and healthy. HSAs offer what experts like to call a triple tax benefit: My contributions are pre-tax, the money grows tax-free and withdrawals for certain medical expenses are tax-free.

The sooner I have these accounts set up, the sooner I can start taking advantage of the magic of compounding. Weiss says that’s the “beautiful thing about [being] about to turn 30:” Time is on my side.

There’s an oft-repeated rule of thumb in finance that I should have the equivalent of one times my annual salary saved by the time I turn 30, three times my salary by 40, five times my salary by 50 and eight times my salary by 60.

These are not hard-and-fast rules everyone has to follow. But in general, Reyes says, “it’s a good, healthy habit to set aside funds earlier rather than later.”

The final thing I might want to do in my 30s is consider talking to a financial advisor.

Admittedly, he’s biased, but Weiss says to view this as another investment in my future. Although I may understand the basics of budgeting or saving, linking up with a financial planner can help me zoom out and look at my money situation holistically — view “all the pieces [in] the puzzle,” Weiss says.

I know from my previous reporting that what I want is a fee-only CFP or CFA (chartered financial analyst). Qualifications and affordability are key here — while some advisors work on retainer or have asset minimums, others offer subscription services. The CFP Board and the National Association of Personal Financial Advisors both have tools on their websites that’ll let me browse through my options.

THE BOTTOM LINE

(but please don't tell me you scrolled past all of my hard work)

My 30s are an excellent time to get serious about setting goals, put away money for retirement and chat with a financial advisor. However, I should avoid getting caught up in worrying about whether I’m on the “right track” because it varies so much for each person.

There’s no need to freak out.

“You have time. But you have to create a plan and take action to get to where you want to be," Weiss says.

VIA GIPHY

RECEIPT OF THE WEEK

check out this wild celebrity purchase

VIA INSTAGRAM

Gas prices are high, and Ice T is not pleased. The rapper/actor tweeted last week that he got robbed at a New Jersey gas station, and after his hands stopped trembling he called the police. When the cops asked if he knew who did it, Ice T replied yes — “it was pump number 9.” That’s cold.

INTERNET GOLD

five things I'm loving online right now

1	These photos of Queen Elizabeth joyfully looking at teapots made my day (despite my misgivings about the monarchy and doubts as to whether she is actually alive).
2	The invention we’ve all been waiting for is finally here: a LEGO vacuum that sorts your bricks.
3	Someone recently patented sparkly maple syrup, which I did not know was a thing until this very moment (it’s infused with pearlescent mica, according to the website). Also, on the topic of weird syrups, did you know that Cap'n Crunch makes an Ocean Blue Maple Syrup? One customer review says the bright-blue syrup “created a complete mess all over my carpets,” which makes me wonder what exactly they were doing with it.
4	As a big manatee fan, I’ve been closely following the efforts in Florida to save the gentle giants with… a bunch of lettuce. The U.S. Fish and Wildlife Service says “they've eaten every scrap of food we've put out,” including 160,000 pounds of lettuce. Anyway, today is Manatee Appreciation Day, so buy a manatee a salad here.
5	THEY MADE HIM A WINDOW!!!!!

401(K)9 CONTRIBUTION

send me cute pictures of your pets, please

VIA SOPHIA GUTCHINOV

This is Juno, a New York pup who invited all her friends to her birthday party. For her next trick, Juno will start saving for retiremutt.

Send fool-proof spaghetti recipes, please.

See you next week.
 

 
P.S. Do you have advice for my 30s? What’s the weirdest food they could make sparkly? How ‘bout those gas prices? Chat me up at julia.glum@money.com or @SuperJulia on Twitter.

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