Home » 5 Financial Moves for Millennials to Make Before 30

5 Financial Moves for Millennials to Make Before 30

Hey, frugal friends! Enjoy this guest post by our friend and fellow PF blogger, Josh from Money Buffalo. The big 3-0.  It’s a number dreaded by most young adults because it means they are now officially old by pop culture standards.  It is probably safe to say that the priorities of most thirty-year-olds are more in tune with their parents than their younger Millennial peers.  Instead of planning a Spring Break getaway or partying on the weekends, they are sacrificing their carefree pastimes to climb the professional ladder or start a family.  Now that I have recently entered the 30’s decade of life myself, I recommend a few financial moves for Millennials to make during their 20s.

Financial Moves for Millennials

Become Debt Free

Millennials are the most indebted generation to have ever entered the American workforce, largely thanks to student loans. The average 2016 graduate owes $37,000.  In addition to student loans, throw in a new car loan and a mortgage, and most of the paycheck goes directly to the lenders instead of your savings account.  Whether you intend to or not, monthly loan payments can force you to live paycheck to paycheck until they are paid off.

Take a minute and look at how many dollars of each monthly payment is applied to accrued interest instead of paying off the borrowed principal.  If you have a credit card, the company will tell you on the statement how long and how much it will cost to repay your balance by only making the minimum $25 payment each month.  That’s a lot of money the bank is earning for free.

Recommended Reading: The Spender’s Guide to Debt-Free Living: How a Spending Fast Helped Me Get from Broke to Badass in Record Time

Instead of constantly borrowing for every large purchase, save as much as possible and try to only buy one thing at once.  For example, I waited to buy my $27,000 sports car until I paid off my student loans.  That way I only had one monthly payment of $300 instead of $600 in monthly loan payments.

Also, being debt-free allowed my wife & I to make a career transition.  I didn’t have to stay in my time-consuming job because I needed to make $80,000 a year to make ends meet.  Instead, we saved every dollar possible and now we have our nights and weekends free because I can afford to work a job that makes notably less and still have a positive savings rate today.

Build an Emergency Fund

An emergency doesn’t necessarily have to be a natural disaster that destroys your house and every earthly possession.  You might get injured or unexpectedly laid off at work and are suddenly without any income to pay the bills.  A savings account solely dedicated to paying for the unexpected is a necessity.

Start small by setting aside $500 or $1000 into a “no touch” fund.  Gradually try to build that amount up to 3 to 6 months (or more) of living expenses.  As nearly 75% of all Americans live paycheck-to-paycheck and wouldn’t be able to afford a $1,000 emergency, an emergency fund is one of the best financial decisions you can make.

Invest at Least 10% for Retirement

Even though it is probably when most workers earn their lowest salaries, the first ten working years are the most important when it comes to saving for retirement.  This is because of compound interest as the earliest contributions have 40 years to accumulate in value assuming a traditional retirement age.  A person that waits until their 40s to start saving for retirement will have far less even if they contribute half of their paycheck to “catch up” because of compound interest and time.

Most financial experts recommend saving at least 10% of each paycheck as a twenty-year-old and gradually increasing the contribution amount.  Enroll in a tax-advantaged 401k or IRA to maximize your earning potential.  It’s also a good idea to use a retirement calculator to help you estimate your monthly contribution to afford the retirement you desire.

Recommended Reading: The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich

Retirement might seem like a fantasy to a new college graduate that seems invincible.  But, by the time you turn 30, you will have discovered there are more productive ways to spend your time than punching a clock for several decades for a paycheck.  Plus, you will start to value employee retirement benefits to provide for you and your family beyond your working years.

Recommended Reading: Think And Grow Rich

If you haven’t realized it already, managing personal finances is a juggling act.  You cannot exclusively become debt free and then start saving for retirement because the second finance goal might never happen.  Plus, those with robust retirement savings built them over a period of decades through passive income (compound interest).  If you cannot invest 10% of each paycheck at the moment, contribute what you can afford to start allowing your money to work for you.

 Keep Old Skills & Learn New Ones

I studied political science and Spanish in college.  My first job required neither of those skills, but, the hiring manager did recommend that I try to maintain the skills I had learned in college.  I am glad I listened because teaching Spanish was my ticket to escape my undesirable job.

As many people change employers and career fields during their working career, you can never predict the future.  It’s important to be prepared for employment changes.  Maintaining Spanish was important to me, it might be auto repair or accounting for you.

Also, remain open-minded and look for new skills to learn as the employment picture is constantly changing.  For example, I knew what an MBA was in college, but, I had never heard of a PMP certification.  Among my former classmates, the latter is easily one of the most prevalent titles to follow their names on LinkedIn.

Recommended Reading: Hustle Away Debt: Eliminate Your Debt by Making More Money

Before you have children is the best time to figure out what exactly you want to do in the future.  Once you have a family, you are less likely to leave your comfort zone and take employment risks.

Prepare For Marriage and a Baby

Call me naïve or ignorant if you desire, but, I never planned to get married or have a family when I was 20.  Instead, I was going to travel the world and be Captain Corporate America.  I changed my tune when I finally understood the expression “Your job is only good for a single person.”  Make the personal sacrifices, instead of partying each weekend, to prepare for where you want to be when you are thirty or forty and finally “settle down” like your parents once did.

Closing Thoughts

Freedom and a disposable income are two primary advantages of being young and single.  Don’t party away your weekends.  It’s okay to have fun, buy your dream car, and go to sporting events, but, use your free time to improve your finances so that you can afford a life of leisure when you have a wife and family to spend your evenings instead of juggling work and educational demands as well.


  1. I agree that laying a financial foundation for one day having a family, even if you don’t want one now, is a great idea. I know plenty of families who would love to have one parent at home with the kids, but purchased a home and/or vehicles that require two incomes. So they are stuck both working, but for less income after childcare.

    Great points about ditching your student debt, too!

    • Josh says:

      Becoming a family person changed almost every aspect of how I viewed life. Thankfully from talking with other friends where both spouses had to work to make ends meet, we tried to do our best to allow us to be home as much as possible for our children and incorporating them into our after-work activities as well.

  2. I feel great because we’ve achieved many of these! Mr. Picky Pincher just turned 30, but I have another 5 years to go. We particularly want to achieve debt freedom, and we’ll get there within five years for sure. 🙂

    30 is still quite young, but it’s the age where you really should focus on building wealth.

    • Josh says:

      Congrats on the progress so far. We are ecstatic to become debt-free as well and (hopefully) never have to borrow money again. Being in debt this time with the house seems a lot more burdensome to me than when I was single & had my student loan debt of a comparable value primarily because of the additional responsibility being a parent and having a more realistic understanding of how money works as well.

  3. Great tips, Josh! All of these tips will ease financial stress when you do decide to have a family. Though I did plan to marry at 20 (I know most don’t – I met my husband at 18), kids weren’t part of my plan until my mid 20s. And then, we had a ton of debt, a mortgage and a car payment. All of this made having a stay at home parent much more difficult.

    • Josh says:

      Thanks Amanda. One benefit to waiting to have a family is the advantage of getting debt-free (or really close to it) and getting some of those “big purchases” out of the way that can only be made once you start receiving a real paycheck.

      Of course, if I met my wife in high school or college, I wouldn’t delay marriage or having a family just to get debt-free. Life happens when it does for a reason. We need to act responsibly without letting it pass us by.

  4. I love the recommendation to invest (i.e. – not just save) at least 10% of your income towards retirement. This is the one area I see the greatest divergence with millennials from Gen Xers and Boomers: a hesitancy to actually invest their funds. I find they’re great savers but, perhaps due to the last financial crisis, are less likely to put their money into play in the market. Which is a real shame: investing early in life has, by far, the best returns over time.

    • Josh says:

      I do wish I would have invested more during the ’09 downturn. All my now-retired superiors said it was the time to buy. They were right.

      I had just graduated college in May of ’08 so my primary focus was paying off my student loans which had a higher interest rate than I could have received in a return during that time.

  5. Fred says:

    Since I am over 30, I can speak from experience. I did set aside some money in my 20’s but should have set aside a lot more.
    The biggest hurdle is getting started, so the time to start is immediately.
    Of course, if you have a matching 401k, invest the maximum amount allowed in order to get the full matching, no matter what you have to do to pay for it. Give up going out to dinner and vacations if you need to, since making 50% or 100% on your contribution, guaranteed, is a return that you can’t find anywhere else.

    • Josh says:

      I recently looked at my 401k statement and was surprised how much of the contribution amount was from the employer match. It was more than I realized. I’m glad I contributed enough to max out the match each month & year I was there.

  6. katscratch says:

    I feel like my son is already a lot more financially savvy than I was in college – partly because of our conversations, but partly just being a young adult in a very connected world. He and his friends have a mindset of independence and self-reliance, and research topics on their own in ways that weren’t even possible 20 years ago.

    I too wish I would’ve put a lot more into my 401(k), and that I would have realized the dollar amount I was missing by not investing as early as possible. I didn’t have a good enough understanding of how the whole shebang worked and it was usually presented as “you don’t have to sign up now” in new jobs.

    • Josh says:

      The Internet has made accomplishing goals a lot easier without having to find a local expert & then having to pay for their services.

      I remember our HR Department saying the 401k was a good idea, but, we could opt-out if we wanted to. It’s been a few years since then, but, I think one or two people might have opted out to pay their student loans off instead.

  7. The Automatic Millionaire was the first personal finance book I read after college. It had a great impact on my mindset…it’s awesome to realize that being a millionaire could be “automatic.” You just have to save and invest. Well the recipe is simple…though it’s not necessarily easy. If I could go back in time I’d definitely tell myself to save and invest even more. The bar wasn’t high enough since much of my peers saved nothing.

    • Laurie says:

      It’s so easy to fall into that “I’m doing better than most” mindset. That is exactly the attitude that got us INTO debt! We thought we were fine as long as we didn’t have as much debt as “most people”. Ditto on the Automatic Millionaire. It’s a phenomenal book. Thanks, Andrew!

  8. Lisa says:

    I would absolutely love it if I can be debt free by thirty! I’ve got a little over 2 years to do it… Hopefully I can achieve it!

  9. TradyGO says:

    I used to spend 12 dollars per day maximum, no more than that. It is amazing the saving you can do by limiting yourself. Of course, I don’t have children.

Comments are closed.