You probably know that you make financial decisions every day, such as how much to spend on lunch and whether to take Uber or Bird to commute to work. But sometimes you also need to make financial decisions that will have a bigger impact on your wealth, credit score, and debt.

Here are the best financial decisions you can make in your 30s and how to use them to enjoy a wealthier, debt-free life.

How to build wealth in your 30s

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If you were care-free or irresponsible with your money in your 20s, it’s time to focus on building wealth in your 30s. There are many ways to do this, and it starts with making the best financial decisions for your situation. 

Take a serious look at your current financial situation and decide how you can build wealth from where you are today. You could see a financial adviser or a financial planner if you want some help planning your financial strategy, decide to put more money into your retirement saving each month, start a budget, pay off a debt, or sort out a bad credit record. 

5. Create new sources of income

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I know this sounds very basic, but creating new income streams is a great way to secure your future wealth and get a little closer to achieving financial independence.

If you don’t know where to start, you can review your personal skills and knowledge and identify those skills that other people will be happy to pay for.

Starting by doing some work on the side as a freelancer is a great starting point.

Later on, when you improve your income and generate enough cash flow you can establish your side business or even jump into it full time.

4. Stay up to date with your student loan

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Student loans can be a big financial worry for many years.

One of the best financial decisions you can make in your 30s is to pay off your student loan as quickly as possible. To find money to do this, focus on paying down any debt you have as soon as you can.

You could start by paying off your credit cards, then do what you can to pay off your car, personal loans, your student loan, and what you owe on the mortgage.

It is very important that you never fall behind on your student loan repayments. If you do, it could affect your credit score, which will make it more difficult for you to borrow money at a favorable interest rate when you want to buy a house or you need another type of loan.

Declaring bankruptcy won’t clear your student loan either, as you will still have to pay it back.

3. Clean your credit card debt as soon as possible

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Credit card debt is always expensive. If you are lucky, you will pay around 13% annual interest on what you owe to the credit card company.

But you are more likely to be paying 16.71% interest on average or even up to 25% interest on what you borrow when you swipe that card.

Using your credit card to buy things and not settling the full balance every month is not a good financial decision for you or your family.

Here’s an example of what credit card debt could be costing you: if you owe $6,354 on your credit card, like an average American family does, you will be paying $1,061.59 every year in interest alone.

2. Track and improve your credit score

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You probably want to buy a car or a house in your 30s, which means you will need to take out a loan.

Lenders will want to look at your credit score before they give you a loan, which is why it is important for you to track your credit score and keep it as high as possible.

One of the best free ways to improve your credit score is to use your payment history from your utility bills, which you can do by signing up to Experian Boost.

Keeping your credit score high and your debt low will also help you get lower interest rates on any loans you take out in your 30s.

If you have a significant student loan, a stable job, and a good credit score, you may be able to refinance the student loan at a lower interest rate through a bank like Wells Fargo or Citizens Bank, or even through a company like SoFi.

1. Focus on long-term investments to create real wealth

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Investing your money is another good financial decision as your investments will make money for you over time. There are many types of investments to look at, from low-risk Treasury bonds to higher-risk mutual funds, shares in the stock market, or even shares in famous artwork from companies like Masterworks.

You still have time before you need to retire from work, so there is room to take some risks in your 30s. Experts recommend putting between 70% and 80% of your savings into stocks, index funds, and mutual funds, so they can grow in value over time.

In this framework, consider the strong power that compound interest generates over the years, especially if you start investing in your portfolio in your 30s. The sooner you get into the habit of putting money aside into your savings and investments, the better.

What are you favorite tips? What steps are you planning to take to grow your wealth? I would love to read your thoughts in the comment section below.

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