Smart Money Moves in Your 30s: Building an Emergency Fund and Maximizing Retirement Savings

As you enter your 30s, it's essential to make smart money moves that set you up for long-term financial success. One crucial step is building an emergency savings fund to cushion yourself against unexpected expenses. According to Shaun Williams, a certified financial planner and private wealth advisor at Paragon Capital Management in Denver, having an emergency fund in place can help keep your retirement savings untouched should unexpected expenses arise.

It's wise to prioritize building this fund before paying down debt, as most emergencies can cost hundreds of dollars. Williams notes that it's essential to have a handle on this emergency fund before tackling debt.

Another smart money move is taking advantage of tax-advantaged retirement accounts. Original contributions to Roth Individual Retirement Accounts (IRAs) can be withdrawn at any time without taxes or penalties, making them an attractive option for other goals or emergencies. Consider opening a Roth IRA, as your tax payments will be low during this stage in your life.

As you begin your career, you're likely to have a lower income, placing you in a lower tax bracket. Contributing to a Roth IRA allows you to set aside after-tax dollars that can grow tax-free for decades. Don't miss out on the company match, either – it's essentially 'free money' that can boost your savings faster.

If you're eligible for an employer-sponsored retirement plan like a 401(k) or 403(b), be sure to check if a company match is available and start contributing as soon as possible. At the very least, pay yourself what the company matches, advises Williams.

In addition to building an emergency fund and maximizing retirement savings, it's essential to take advantage of other financial tools and resources available to you. For example, high school students in Pennsylvania will now have access to a personal finance class before graduation, thanks to a new state law.

By prioritizing smart money moves like building an emergency fund and taking advantage of tax-advantaged retirement accounts, you'll be well on your way to achieving financial stability and security in your 30s.

Smart money moves in your 30s