Money in your 30s: How to best handle past and future finance issues in your "crunch time"

Everything you need to consider to manage mounting expenses, while you keep your eye on the prize.
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Your 30s are a very expensive time, with so many new and mounting expenses –  it can seem like the costs are unmanageable. These are the years when many people get married, start having kids, buy a house and some of us might still be hanging on to debts we accumulated in our 20s. On top of this you're not in your peak earning years, so finding ways to make it all work can be difficult. Feel good knowing that as you get closer to your 40s not only will costs go down, your salary may also get higher, and you'll be on your way to reaching many life goals. Hopefully this idea will keep you feeling positive about your financial situation in the decade that I like to call crunch time. In the meantime, set yourself up for that time ahead right now. Here's what you should be doing with your money in your 30s.

Eliminate old debt ASAP

As hard as it may seem, your priority should be to pay off all debts you accumulated in your 20s. This can be student debt you're still making payments on, or old credit card and line of credit balances that are lingering. These debts can end up being roadblocks that prevent you from reaching your bigger financial goals, like buying a house, building a healthy retirement nest egg and saving for your kids' education. Calculate how much debt you have and then figure out how much money you can spare each month to pay it down. By dividing your debt by that monthly number you can figure out how long it will take to get your debt to zero.

Get real about any house goals

If you're in the market to buy a home, make sure you know how much you can afford. Make an appointment with a mortgage specialist to see how much mortgage you qualify for, this will ensure you are looking at homes you can actually afford. When buying a house, think 5-10-15 years into the future. Do you plan to have kids? How many? Do expect to change jobs? That might mean you have to move. Buy a house that you will be able to hang on to for at least 5 years. The transaction cost of selling a house too soon, even if the value has increased, can be costly.

Think even longer term

If you haven't started saving for retirement, definitely get on it now, because the earlier you start putting money away in your retirement account, the more years it will have to grow. Talk to your employer about any pension plan that might be available at your work. By enrolling in a plan already offered by your company you can supercharge your savings, as many employers match contributions to a certain level. At this time, it can be hard to put your retirement savings first, but remember despite all your other expenses, your retirement savings remains a priority. The only way to build a healthy nest egg is to be consistently saving in one.

Open up an RESP for your children

If you're pregnant or having kids, starting thinking about saving for their education. The best advice is to open and fund a Registered Education Savings Plan (RESP) the year your baby is born. Like retirement savings, the earlier you start the more time the money has to grow. For every dollar you contribute to your child's RESP, the Canada Education Savings Grant contributes 20 per cent, up to a maximum of $500 a year, up to lifetime maximum of $7200. The earlier you contribute the earlier you get that money.

Make a will

Once you have some assets and dependents, it's important to make sure your financial wishes are in order in the event you are no longer with them. This would include how your assets would be divided, appointing an executor of your will and picking guardians for your children. It can all seem morbid while you're doing it, but it will give you peace of mind knowing it's done, and to know your affairs are in order, the way you'd wish them to be. Also put money aside for medical and other emergencies; ideally you should have enough money in a fund to pay for three months of your living expenses.