6 Financial Lessons Worth Learning in Your 30s

Another personal finance blogger recently asked me to contribute to a post he was writing about money mistakes people in their 30s make and how to avoid them. I was happy to help with my best financial lesson.

As with most finance questions I come across, this one got me thinking about my own money mistakes and the financial lessons I wish I had taken full advantage of in my 30s. Here are six financial lessons, most of which I followed:

Buy real estate ASAP

Owning a home isn’t for everyone. Renting makes more sense if your job is mobile and you’re not sure where you’ll be living in a few years. Renting also makes sense if it’s a lot cheaper than owning a home.

My answer to the curious blogger about financial lessons was to buy real estate when you get the chance to. I don’t mean just when it fits into your finances and lifestyle — such as having a steady job and being married. My point, which I didn’t elaborate on in my quick response to him, was that buying real estate as an investment when you’re young can be a smart move many years later if you bought at a time when the real estate market was down.

You don’t necessarily have to live in the house you’re buying, though that does have good tax benefits.

For example: About 15 years ago a relative bought a townhouse in a nearby city. The townhouse was next to a major shopping center that would only get bigger in the coming years as more people moved to the area. Even back then, it was obvious to me that it was a growing area and that home prices would only go up. They did, and are now worth 10 times what they were 15 years ago.

I didn’t buy a townhome there then, but wish I had taken out a bank loan and got a second job, if needed, to buy one and then have tenants pay the mortgage from then on. That’s the first financial lesson I’d offer.

Save for investments

One thing I wish I did more of in my 30s financially was save more money for investing. Like everyone else, I’m busy working so I can pay the bills and hopefully have a little extra each month to enjoy dinner out or something, along with saving money for retirement and an emergency fund.

But if you can afford it in your 30s, it can help to save some fun money that you’re willing to put into an investment. The caveat is you have to be willing to lose that money. While that obviously isn’t the main objective, it’s a possibility to consider in this financial lesson.

You don’t want to look back years later and regret that you didn’t buy Apple stock at $10 a share when it was being beaten down and you knew it was going to bounce back. (Yes, this happened to me.)

While any amount is good, I’d recommend $5,000. It’s enough to hurt your bank account and enough to make you think hard about the potential investment. As you’ll see from other financial lessons I offer here, having money set aside for investments or something else is key to making the most of your finances in the long run.

You can also invest a little at a time, such as through a Dividend Reinvestment Plan, where $100 or so a month is automatically invested into a stock. I’ve done this too and have come out ahead.

Run your car forever

I owned my previous car for 23 years before buying a used car last year. I didn’t have car payments for 18 years, giving me a lot of time to save for a car when my 1991 Acura Integra finally got too old for me.

I probably could have kept using the car for another five years or more — mainly because I hardly put any miles on it each year. But too many small things kept falling apart — though no major mechanical failures — that I didn’t want to put up with the headaches anymore.

However tempting it is to buy a new car every 3-5 years, avoid it and just consider your car what it should be: A way to get from Point A to Point B. There’s little point in putting extra money into it if you don’t have to.

Don’t commute

This is as much of a lifestyle benefit as it is a financial one as a financial lesson. I’ve been working since I graduated from college, and I’ve never had to commute. Part of this is by choice, and some by luck.

I chose a career — journalism — where I thought it was important to live in the city where I worked if I was going to cover that city well. That worked out great for me as a reporter and later as an editor, allowing me to come up with stories that others who lived outside of the area didn’t think of.

Living near work allowed me to leave for work 10 minutes before starting time, and got me home a lot quicker than I would have it I commuted. I also saved on gas, car insurance and mileage, decreasing the need for a new car.

Save for your child’s education

I know I’m proposing saving a lot of money in your 30s for different purposes, but this financial lesson is one you at least owe your child in part if you want them to get ahead in the world.

I’m not saying you should save enough to pay for their entire college education, but starting a college savings plan when they’re first born should help them pay for close to half of it. The rest they can work for, either as teens or while in college.

Fund a retirement plan

If your employer offers a 401(k) retirement plan, join it, especially if it matches your contribution. Contribute as much as you can so that you feel it each month in your lifestyle.

I won’t go into all of the benefits of the power of compounding, but it should be obvious to a 30-year-old or any other adult how much better your retirement fund will be if you contribute early and often, and reinvest the returns, then if you wait 10 years or more to do it.

The last financial lesson

I could almost write a book on this subject and could include a lot more (such as buying term life insurance, having an emergency fund and buying everything at Costco), but I see that this post has already hit the 1,000-word mark, and I’m wondering if that’s too long to grab a reader’s attention span.

But for the sake of trying to be extra helpful, here’s a bonus financial lesson to take advantage of in your 30s: Negotiate your salary.

Asking for a higher salary is a request you’ll never regret. Even if you don’t get it, the request alerts your employer (or potential employer) that you think you’re worth the extra cost, and you plan to do everything you can in the coming year to prove it to them.

An extra $5,000 or so per year could be enough to encourage you to save it for an investment, such as a house in an up-and-coming neighborhood, which you can rent for years before selling it for a $500,000 profit so you can retire early.

This article by Aaron Crowe first appeared on Add-Vodka.com and was distributed by the Personal Finance Syndication Network.