How to master money... in your 30's
Here’s how to set yourself up for long-term financial wealth and wellbeing in your 30’s.
We are told that our 30s are the decade that we ‘Settle Down’, when late night shenanigans are replaced by late nights interrupted by other things like kids and careers. In other words, it’s time for proper #adulting.
Sure - for some of us, our 30s are characterised by ‘advancing our careers’ and starting a family. For others, we might be starting a business or looking to invest in a property. And for others still, maybe it’s none of those things, and we’re freelancing, travelling the world and still trying to figure out how to stretch our paycheck to cover rent and food. So, whatever your 30s looks like, we believe that all ladies in this community deserve support to create a 30s of freedom, independence, and possibility.
You don’t need to be reminded that we are passionate about accessibility, inclusivity and sharing knowledge outside the boys club. While this blog has been designed to help you master your income, take control of your cash flow, navigate super, get a handle on investing, understand your property options, and more - the finance info discussed is general advice only. If you’d like to discuss your individual needs, please reach out to us!
Ok. Ready to take control of your money, ladies? Let’s do this!
Why is mastering your money in your 30s important?
Financial literacy, a.k.a. having the skills and understanding to make informed decisions about your money, is important in any decade of your life but, particularly during your 30s. This is a decade where making big investments and long-term financial decisions are common and knowing how to make your money work as hard as you do will help you now and in the decades to come. That’s why, in many ways, mastering money in your 30s becomes a hardcore balancing act between living for the moment and doing your future self a favour.
Chances are, you’re earning the most money you have in your life and are juggling more financial responsibilities than ever before (such as kids, a business or a mortgage). And with many Australians retiring at 65 years of age, it’s important to start mapping out how you’re going to manage your money to ensure a comfortable retirement. So, the sooner you figure out how to effectively manage your cash flow, navigate investing and grow your super, the better off you’ll be. Let’s get to it.
Mastering your income in your 30s
Before we go any further, we want to call out the elephant in the room: the gender pay gap. Unfortunately ladies, the gap between how much women and men earn in Australia is still very much alive. In fact, women are earning (on average) 13.9% less per week than men (which equates to roughly $243.90 per week less income). Think of what you could do with that extra cash! But why is this still the case?
The gender pay gap exists as a result of a host of factors, including conscious (and unconscious) hiring bias, women-dominated industries attracting lower wages, an overrepresentation of women in part-time and casual work, women bearing the brunt of unpaid care and domestic labour, and more. With all of this in mind, what can we do in our 30s to redress this structural inequality?
In a nutshell: get talking. As an employee, it’s crucial to make sure you’re being paid in-line with your colleagues (both men and women) and that you are receiving the same salary packages as the rest of your team (including bonuses, pay rises and opportunities for negotiation). As we revealed in our ‘How To Talk About Money’ guide, making sure you #shareyoursalary can be a radically transparent and courageous way to do this because how can we know if we’re being underpaid if we all stay silent? Remember: inequality thrives on silence and, over time, this gap could amount to thousands of lost dollars. (We will be covering the gender pay gap and negotiating your salary in depth for Part Four of Ladies Talk Money, so stay tuned for that!)
For the self-employed 30-something ladies among us, it’s crucial that we ‘pay ourselves first’ (both now and into the future). This means setting up contributions into your super (more on this below) and setting up separate savings and ‘rainy day’ funds to make sure you’ve got yourself financially covered (no matter what the future holds).
Savings and cash flow in your 30s
As we mentioned in our Mastering Money In Your 20s guide, our cash flow mantra is → Spend less than you earn and invest regularly. And this gets even more important during your 30s. Why? Because with higher fixed costs and more financial responsibility (hello kids, businesses, insurance premiums, and/or mortgages), keeping tabs on where our income is *actually* going could save us hundreds, if not thousands, of dollars in the long term.
Here are a few things to keep in mind:
An ‘emergency fund’ and a savings fund are different (and you need both!). This will ensure you always have funds saved away for unexpected expenses that might crop up but also so that you can live well and enjoy yourself now.
Planning on having kids? Make sure to sit down and plan out how this will impact your household’s cash flow. How will you navigate periods of time away from work? If you have a partner, what is this going to look like? Can you both access parental leave? (The more that non-birthing partners take parental leave, the easier it is for those sh*tty entrenched gender stereotypes to stay in the past where they belong). TIP: Make sure to split super for the partner who will be taking time off to ensure they’re not left at a financial disadvantage. Plus, check with your super fund to see if you can access fee reduction during the time you are taking off work.
Get informed about whether you’re entitled to any of the government’s benefits and financial support schemes, such as the child care subsidy (CCS).
Superannuation in your 30s
Okay so we get that retirement might still seem like a far-off concept in your 30s, but hear us out! Being critical about your retirement plans now will put your future-self in the best financial position possible when retirement rolls around. Remember, super is your money! By taking the time to ask a few questions, shop around and do your research, you’ll be more comfortable in retirement.
So, what are our top super tips for all 30-something ladies?
Don’t be afraid to shop around and make sure you’re getting the best value from your super fund. With so many options on the market, make sure to assess the fees, performance, insurance offering, education and advice offered by your fund. Not sure where to start? Check out Canstar’s super comparison tool here.
If you aren’t already, consider making additional contributions to your super. This can be done by salary sacrificing your pre-tax income (but make sure to check you don’t exceed the annual contribution cap of $25K - no one wants to pay higher levels of tax, right!). This tip is so important as this can make a huge (positive!) impact on your retirement savings in the long-term.
Have a look at the salary package options your company offers. In many cases, your employer can offer salary sacrifice packages that you could benefit from now and into the future.
Investing in your 30s
Our advice for 30-somethings when it comes to investing is pretty simple: If you can, start now! The sooner you invest your money, the longer it has to grow in value. This is called compounding and is a powerful way for your money to work hard for you (without you having to work extra hours or juggle a side hustle). Generating a passive income through investing can be a great financial strategy if you’re looking for a way to fund big future expenses too, including buying a home, a stint overseas, starting a business, or putting your kids through school.
However, it’s not just compounding that you need to think about. Investing in a broad range of assets (like property, stocks, shares, and bonds) is a great way to lower your risk. Remember, there’s always a level of risk with any kind of investment. What’s important is to figure out how comfortable you are with it and find investment types that align with your appetite for risk. Confused? Check out our money jargon article here or make time to chat with a financial adviser like Jess to help you understand the best approach for you.
All things property in your 30s
Whether you’re searching for your first home, already have a mortgage, or want to be a rentvestor, there’s plenty to consider when it comes to property in your 30s.
If you’re looking to purchase a property…
Firstly, we want to acknowledge that buying a home (especially in our capital cities of Sydney and Melbourne) isn’t a realistic option for many of us. These ultra-competitive markets are super tough to get into, and we want to call that out before we continue. But, if you’re curious to learn more about the process of purchasing your own home (even if it isn’t on your immediate radar) we’d love you to keep reading (or even reach out to Chandel for a chat).
Apart from making sure that you’re across your finances before you head to auctions and inspections, our biggest piece of advice for first home buyers is to find a good broker. Why? Because they’ll be able to guide you through the purchasing process and provide you with all the information you might need to make an informed decision. Basically, ASK THEM ALL THE QUESTIONS. That’s their job! A good mortgage broker is a brilliant resource to draw on and should make sure you feel comfortable and educated about the process every step of the way. Oh, and did we mention they’re free? Kind of a no brainer then.
TIP: Want some more info on the home buying process? Download Pure Finance’s ‘First Home Buyers’ guide here.
If you already have a mortgage…
So, you’ve purchased your own home. Nice work lady! During your 30s, there’s a bunch of ways you can get on top of your mortgage faster. Here are some of our top tips:
Increase the frequency of your repayments: if you’re currently making payments every month, try switching to fortnightly repayments (if you can). There are 12 months in a year, but there are 26 fortnights, which means by paying fortnightly, you’ll actually be making an extra month's worth of repayments without realising. And as always, extra mortgage repayments mean: less interest and less years on your loan term!
Negotiate with your bank for the best interest rate: if you have a variable interest rate, one of the best ways to keep the costs of your loan as low as possible is to review your rate regularly (we’d say to check-in every 12 months). Sounds like a pain in the ass? It can be. So, why not speak with a mortgage broker who can help do the negotiating on your behalf. And if your current mortgage broker isn't already doing this for you, then maybe ask them why not? 😉
Use an offset account: this one sounds complicated but an offset account can be a really valuable way to reduce the interest you pay on your home loan! By linking a transaction account to your home loan you’ll gain maximum flexibility and lower the interest charged on your loan. This is especially good at the moment with interest rates being so low, meaning you’ll be able to pay off the amount you owe the bank faster. For more on offset accounts, check out our Money Jargon blog or this article from Pure Finance
Remember refinancing your loan is an option: if your rates start to creep up over time (which in most cases, they will) and your bank won’t budge or give you a better deal, refinancing is always an option. This just means taking your loan to a different bank. Ladies, being ‘loyal’ to a bank means ZILCH to them. So, if your current bank isn’t coming to the party, it could be time to find a better option.
Consider purchasing a second property: if you already own your own home, and have the financial flexibility to take on a new loan (we know this is not accessible for everyone), your 30s could be a great time to purchase a second property. This one comes with a massive caveat: you should only consider taking on a new home loan if you can afford it and can ensure the purchase won’t put you under financial stress. But, for those who are able to, exploring the option of purchasing a second property can be a good move to help grow your wealth while you still have plenty of working years ahead of you.
From super to investing to property and managing your cash flow, these are some of our top tips to mastering money in your 30s. We know it can be overwhelming, but we’re here to help you and we love chatting about money all day every day (especially with our ladies). So, if you feel like a chat, hit us up in all the usual places.
got any other tips to share with your fellow 30-something ladies? Get in touch with us → hello@ladiestalkmoney.com.au and help a sister out mastering her money!
The finance info discussed in this seriously fab article is general advice only. You should consider your personal circumstances or reach out if you’d like to discuss your individual needs.