Why My 30s Are Financially Rocking So Far

Why My 30s Are Financially Rocking So Far

Why My 30s Are Financially Rocking So Far | brokeGIRLrich

I’ve been working with a pretty awesome 22-year-old assistant the last few weeks on my newest show and I kind of constantly see myself a decade ago reflected in her. We got to talking about IRAs for a minute the other day and she sort of laughed at the notion of having one and all I could think about was how glad I was that I really buckled down on my finances from about 25 on.

I’d like to go back and convince 22 year old me to open an IRA three years earlier than I did, but even without being able to do that, I was sort of left pleasantly marveling at how a little sacrifice and good planning in my 20s has made my 30s pretty financially easy.

I finished my undergrad with no debt and my first grad degree with about $3,000 of debt that I paid off almost immediately. I lucked out that I had people in my life who convinced me to think about retirement, so I opened an IRA at 25. At first, not much seemed to be happening with it – but even now, when it doesn’t hold that much, it still grows by $1,000-1,500 a year without me doing anything extra than contributing the $5,500 year. That’s kind of a lot of extra money it makes me and I see it in a real way now, a way that encourages me to keep saving.

When I went back for my second graduate degree, I wound up around $30,000 in debt and learned a lot about frugality and living below my means to get rid of that debt in 2.5 years on a salary that was pretty much the same amount. The most important thing I learned from that situation though was that debt owns you. When you owe other people money, you have to do what has to be done, whether it makes you happy or not. That includes being trapped in jobs you hate.

After finishing up paying off that debt, I prioritized building up an emergency fund so I’d never get trapped by debt again. I aimed for $1,000 goal first and funneled money toward it like there was no tomorrow. Once I hit that, I prioritized getting to $5,000 within a year and set up a plan to do that. I failed the first time, it actually took me 2 years to get there. My final goal for the account was to have $10,000 in it, so I set a goal of contributing at least $100 a month until I got there, which I finally did this year. Now I have a solid cushion and I’ve freed up those old contributions.

So I’ve begun to invest more. I also have savings amounts set for mid-term goals like buying a new car when mine dies (hopefully in 5-7 years) and for a down payment on a house. These mid-term goals provide even more financial cushion if anything horrible happened like losing my job and I’ve definitely noticed a pretty big leap in my net worth since I’ve been able to funnel more towards investing.

It’s so strange to me to think of the massive gains this has all brought into my life over the last decade just by making a few smart choices along the way. The absolute biggest gain is the safety. I generally just don’t worry about money, which is so crazy because I remember worrying myself nearly sick a few times in my twenties.

Two weeks ago we had a few days off in Georgia and I made several impulse buys, ate at a bunch of restaurants and drank a lot – and the cost of all of that didn’t bother me at all. As a matter of fact, it still never even touched my regular job income. I was able to float all of those additional costs out of my side hustle income.

I’m not writing this to brag or anything, only to point out that I’m as average as they come and I work in a low income industry. You can achieve all these things even if it means starting out small and then sticking to it for a decade. As far away as 32 seemed at 22, I’m sure 42 is right around the corner and I’m trying to set up 42 year old Mel for easy street. That’s worth a little extra careful planning.

8 thoughts on “Why My 30s Are Financially Rocking So Far

  1. Mel, you’ve done a great job of rocking your finances and I am so impressed! While you may wish you had started 3 years earlier, some of us wish we had started 30 years earlier. And you’re living proof that you don’t need a six-figure salary to be able to plan wisely for your future. Thanks for sharing your story and inspiring others.
    Gary @ Super Saving Tips recently posted…Why You Need Life Insurance Whether You’re Young or OldMy Profile

  2. Hi Mel! Also 32, also feeling pretty alright about my situation. I do have a question about your mid-term savings goals. I may be misinterpreting that paragraph, but it starts with, I’m investing more and then you say you’re saving for eventual next car and a house down payment. Are you using short term investments for those goals or just socking it away in money market accounts? That’s pretty much where I am and trying to figure out where to save for those things and how to grow those funds faster. Thanks for any insight or resources on that!
    Megan recently posted…A Fall SlumpMy Profile

    • Hey Megan,

      I’ve actually got them in savings accounts right now – though I go back and forth about investing them in mutual or index funds. Especially since barring a disaster, I’ve probably got at least 5 more years before my car bites the dust. I’ve also been thinking about switching to CDs, which have slightly higher interest rates but are so much less volatile. Honestly, I’m not 100% sure what to do on this front either. :o/

  3. You rock! It’s so good to give little seeds of advice to someone who is where you once were. Even if they don’t seem to listen, that little seed might grow into something big.

    We haven’t saved as much for retirement as I’d like, but we have been doing a lot of little bits here and there since we were in our very early 20s. Time makes such a difference!
    Jamie @ Medium Sized Family recently posted…5 Ways We’ve Saved Money This Week 54My Profile

  4. In a period of four years I went from having double digit post-grad debt, to a positive network, to rent-free, to a down payment on a place, and now while my payments are higher than my debt ever was, I’m also building this great asset of wealth and also still using my other savings vehicles. And still affording the ability to go a little spendy from time to time, it’s nice when hard work pays off! Can’t wait till it’s actually paid off and my 40s can be even better :)
    Danielle D’Ornellas recently posted…Mani Monday: Sally Hansen Miracle Gel Wine StockMy Profile

  5. I love that you went for an additional degree and were able to knock out the debt so quickly.

    I considered going back to school so many times, but the numbers just never seemed to make sense.

    Keep up the good work.

    I wish I had started investing at 18 instead of 25, but we can’t change the past, just try to make mostly good choices going forward. :)
    TJ recently posted…It’s OK to Leave Money on the TableMy Profile

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