Experts Share 6 Personal Finance Must-Dos by Age 35

by Dan Mattia | November 02, 2018

If you’re new to the world of personal finance, the amount of available information can feel overwhelming. And for good reason: financial advice is completely subjective and dependent on your overall goals.

The American dream is different for everyone.

For many of us, our 20s are a time of worldly exploration and questionable decision-making. Trips, parties, and overlooking the consequences of our actions can result in a shaky start to our 30s.

Once the parties wind down and the grays start to crop up, it’s time to look at your finances with a more serious demeanor.

“Most Americans spend more time planning their next vacation than they do reviewing their financial position,” says Emily Hsieh, Certified Financial Planner and founder of Narrative Financial. “Money shouldn’t be a taboo topic,” she continues, and recommends 30-somethings talk openly about their finances.

Financial honesty and openness is especially important now, considering 78% of American adults admit to lying about money.

An open dialogue between you, your spouse, your friends — anyone — can key you into ways to make the most of your financial situation.

However, some tried and true personal finance advice can apply to the majority of 30-somethings. We asked financial experts what financial must-dos you should achieve before the age of 35. Here’s what they had to say.

1. Create Your Budget

Your top financial must-do before turning 35 is to establish a budget. Hands down.

A budget will keep you on track to meeting your financial goals. A good way to allocate your funds is to follow the 50/30/20 rule. When it comes to your income:

  • 50% should go toward your essentials, such as bills, gas, and groceries
  • 30% can be spent on your wants, like a vacation, new car, or shiny new toys
  • 20% should be directed toward your savings and debt, such as student loans, retirement, credit card payments, and investments

Part of your savings should be used to build an emergency fund, too. According to David Ambrogio, a consultant for Tower Books, “57% of Americans don’t even have $1,000 in the bank.”

Ambrogio recommends “committing to a monthly savings plan, investing early, and supplementing your income by taking on side work” in order to build up an emergency fund that equals at least three to six months of your expenses.

2. Take Charge of Your Debt

It’s easy to rack up debt before 35. Student loans, a mortgage, credit cards, and marriage all have a heavy impact on your finances. In fact, the average American under 35 years old has accumulated $67,400 of debt. That number increases to $133,100 for those between 35 and 44 years old.

That’s a scary amount of debt, especially when you’re still establishing your life or just purchasing your first home.

Luckily, there are ways to reduce (or totally eliminate) your debt by 35. Jennifer McDermott, Consumer Advocate for, recommends “consolidating all debts into one place.” Doing so “can help you pay off [your debt] faster as it is easier to manage, and allows you to take advantage of low-interest introductory offers.”

Eliminating “bad” debt, like a monthly credit card balance, can free your cash up for other purposes. “Paying $200 per month on a $5,000 balance can take almost three years to pay off with a high interest rate (18% or more), and it will add more than $1,300 in interest charges,” says Drew Parker, creator of the Complete Retirement Planner.

If you were to instead invest that $200 per month, you could “have $10,000 in hand in the same amount of time (with a 7% return),” continues Parker.

And if you follow the 50/30/20 rule, that $10,000 can go a long way toward avenues that are better – and more exciting — than paying down debt.

Like a tropical vacation (or ski trip — we don’t judge).

3. Ramp Up Savings

Once your debt is under control, it’s time to start building your assets.

It’s never too late to start saving, even if you’re near (or at) 35. Even saving $5 or $10 a week can go a long way. Try to find an FDIC-insured bank that pays a reasonable interest rate — ideally one that keeps pace with or stays ahead of inflation.

In most cases, you can even deposit funds into your savings account automatically from your checking account or through direct deposit. Set it and forget it, baby.

Lou Haverty, a CFA with Financial Analyst Insider, suggests trying to save at least the equivalent of your annual salary by age 35. “If you’re not at that level yet, and a lot of people aren’t, it can serve as a good reminder that you should consider increasing your savings rate to get closer to that 1x mark.”

If you’re planning on having children, Hsieh recommends devoting some cash toward a 529 plan, a tax-advantaged plan that helps pay college expenses when the time comes.

4. Invest in Yourself

Investing in yourself, particularly when you’re at or younger than 35, works to ensure you’re in a strong financial position when retirement comes around.

“Inaction in investing from an earlier age loses you the time value of money,” says Julia M. Carlson, Founder and CEO of Financial Freedom Wealth Management and author of Fit Money.

An investment vehicle you might already be familiar with is the 401(k). Contributions to a 401(k) are made with pre-tax dollars and accumulate tax-free until you start taking required minimum distributions at 70 ½.

Many companies match a percentage of your contributions to a 401(k). In these cases, you should always contribute at least that amount. It’s free money and helps your investment build quicker.

Don’t forget to roll over your 401(k) to a traditional IRA if you change jobs, too. (If you’re like 25% of young employees, you’ll have likely worked five jobs by age 35.)

Aviva Pinto, a wealth manager at Bronfman Rothschild in New York City, says “If you think you will be in a higher tax bracket when you retire, a Roth IRA is also a great idea.” Contributions to Roth IRAs are made with after-tax dollars, so withdrawals are tax-free.

Don’t Procrastinate!

You lose out on quite a bit of financial growth by procrastinating investing.

“Unfortunately, people believe there is always time ‘later,’” continues Carlson. “But by age 35, you’ve already lost a lot of time and compound interest that could make a huge difference in retirement.”

When it comes to investments and savings, compound interest is your friend. The more you put away and the longer you save, the larger your account grows.

Richard Best, a writer for with over 30+ years’ experience in financial services, agrees: “There is a real cost of waiting to save for your retirement.” He presents the following example to illustrate the power of compound interest:

“Vincent contributes $20,000 starting at age 25 and stops making contributions at age 45.

Ally waits until age 45 to start contributing $20,000 per year until age 65.

They both invest the same amount of money. However, assuming a 6% average annual return, Vincent would have $2.5 million by age 65, while Ally would have just $790,000.”

By waiting 20 years longer than Vincent to begin investing, Ally loses out on more than $1.7 million. Can you say ouch?

5. Make (or Update) Your Will

While you can make a will at any age over 18, you don’t need one until you’ve amassed some assets or have dependents. Marriage, parenthood, or a positive net worth are all times you really should put a will in place or reassess one you already have.

You can, of course, write your own will, but it’s wise to meet with a professional beforehand.

Adam Beaty, a Certified Financial Planner with Bullogic Wealth Management, thinks everyone, even those under the age of 35, should meet with an estate planner. “Dying is the easy part,” he says. He recommends “everyone look at getting a medical directive (living will), HIPAA release form, power of attorney, and power of attorney for any property owned.”

Estate planning protects your assets and financial well-being while you’re alive, too. Without plans in place, someone might have to go to court to gain conservatorship over your financial health if you become incapacitated.

And if you’ve already put together a plan, it’s always important to check (and update) your beneficiaries.

6. Get Insurance

There’s never a bad time to buy life insurance — particularly if you’re in your 30s. Because premiums are primarily based on age, the younger you buy a policy, the more coverage you can afford and the cheaper your premiums.

For example, a healthy non-smoking 35-year-old male in Texas can buy a 20-year term life policy with $250,000 of coverage for as little as $18 a month. At an age where his debt still likely exceeds his income and savings, a tax-free $250,000 benefit can go a long way toward protecting his loved ones’ financial health.

Don’t forget your home and auto insurance, either. In some cases, bundling insurance might prove beneficial, but never neglect to shop around for the best deal first.

Your 30s can be frightening for plenty of reasons, but your finances shouldn’t be one. You’re never too old to take the reigns of your financial future. By 35, you can set yourself up for a comfortable future that protects your goals (beachfront retirement, anyone?) and the people who matter to you most.

Everyone’s financial situation is different, but following and implementing these six financial must-dos by age 35 will give you a great financial foundation to build upon.