99: Financial Goals For Couples in Your 30s and 40s

Access the transcript for this episode here.

When you are in your 30s and 40s, it's important to set financial goals that create a safety net for the present while taking steps to prepare for financial safety in your future. Read on for 9 financial goals to work toward when you are in your 30s and 40s.

1. Create a Healthy Relationship With Money 

A healthy relationship with money is what happens when you cannot only have and adhere to a personalized financial plan but also feel emotionally good about the plan. Financial wellness is about more than planning; it's about making sure that your emotions are balanced.

Many of us have unhelpful thoughts when it comes to our money. These types of stories can cause or perpetuate an unhealthy relationship with money. These thoughts sound like, "I could save if I earned more," "I'll never be able to take that South American trip with my spouse," and "I don't have to worry about that credit card bill, my boss said bonuses are coming soon."

When we perpetually experience unhealthy thoughts about money, we start to believe them. Instead, I invite you to separate your thoughts from the facts. If your thoughts are unhelpful, see if you can reframe them to be positive or neutral.  

Examples of reframing unhelpful money thoughts:

• "I could save if I earned more," could become, "Even if I save $30 per week, it's a great start."

• "I'll never be able to take that South American trip with my spouse," could become, "If we save about $140 a month, we'll be in good shape to take that trip in a year-and-a-half."

• "I don't have to worry about that credit card bill; my boss said bonuses are coming soon," becomes, "Whether or not bonuses are coming, my credit card bill has to get paid first."

To learn more about creating a healthy relationship with money, read my piece here.

2. Bulk Up The Emergency Fund

When you are in your 30s and 40s, having an emergency fund is crucial so you can cover financial needs if something were to happen to your income. An emergency fund is cash saved in an easily accessible savings account (I prefer to use a high-yield savings account). Having an emergency fund creates a financial safety net when life happens. Think: you lose your job, need to stay home for longer than expected with a kiddo, or get in a car accident and have expenses above and beyond what insurance covers. 

While experts recommend a 6-8 month emergency fund, create smaller emergency fund goals if you are just getting started. For example, first save $1,000, then one month of expenses, then two, until you reach your desired emergency fund goal. 

3. Get Life insurance

Life insurance is vital for people in their 30s and 40s and becomes even more important if you care for others, like a child, disabled sibling, or aging parent. If you have children or stepchildren, you want to be sure your life insurance policy will financially provide for them until at least the age of 18 or older if you're going to pay for their college education. If you are a DINK (dual income, no kids) like me, make sure you take out a policy that would allow your partner to continue living their current life. 

Life insurance is precisely what it sounds like: you pay a monthly price (premium) for a life insurance policy that typically lasts 15-30 years. If you were to die during the period that policy was active, a lump sum of money would go to the listed beneficiaries. How much you need depends on a lot of factors. For example, if you have a child, consider that in 2017 it cost $233,610 to raise a child from infancy through the age of 18. At a minimum, you'd need a policy for $235k for each child you have. If you are a DINK, consider how much money would be required to pay off your house if you own it or allow your partner to continue renting in their current city. Also, consider how much it would cost to cover your outstanding loans, such as car loans or student loans.

The good news is that for a healthy 30 or 40-something, a life insurance policy is a relatively inexpensive way to ensure you are protecting your loved ones when you are gone. Check with your HR department first to see if they offer any life insurance policies since large companies usually get discounted rates. 

4. Get a Will & Trust

Like life insurance, getting a will and trust when you are in your 30s or 40s is something that many people put off. Wills and trusts are legal estate documents that help your surviving family know where you want your assets distributed. Having these documents in place is peace of mind for your family and prevents your assets from being tied up in court (called "probate") after your death. A will is a legal document stating how you want your affairs handled and assets distributed after you die. For example, maybe you want a celebration of life at an outdoor park instead of a traditional funeral. Having this spelled out in a will ensures that your loved ones honor your wishes. A trust is a separate legal entity where a grantor (also called a trustor) gives a trustee the right to hold and manage assets for the benefit of a specific purpose or person. A living trust is amendable, or editable, so you can change it as needed if your circumstances change. Having a trust is especially essential for people in their 30s and 40s as statistically, it's more likely that a person that age will become disabled or incapacitated than die early. Having a trust in place also helps if you become disabled or incapacitated. Whoever you appoint the trustee can help distribute money to appropriate people and manage other affairs.

5. Invest in Retirement

Investing in retirement is so important in your 30s and 40s. While you should continue to contribute to retirement as you age into your 50s and 60s, the power of investing comes from compound interest. Compound interest is the addition of interest to an initial amount of money, or "interest on interest." 

Here's a hypothetical to help you "see" the magic of compound interest. For example, say you have $1,000 in an investment account that earns 7% in annual interest. In the first year, you'd make $70, giving you a new balance of $1,070. In year two, you would earn 7% on the new larger balance of $1,070, which is $74.90—giving you a new balance of $1,144.90 at the end of year two. Compound interest works its magic when you give it time to do so, so adding additional money to your investment accounts (hopefully inside a retirement account like a 401k, IRA, or 403b) is important in your 30s and 40s.

If you are a self-employed therapist, you can grab my 1-hour workshop on what accounts are available to you, why keeping all of your money in cash is risky, and quick calculations to help you figure out how much money you need to retire safely.

And therapist or not, if you are interested in learning about investing, I recommend taking "Invested Development" by Amanda Holden. She's a former investment manager and now teaches women to use money as a tool to build wealth. Her goal is to democratize and deliver this financial education to those previously left out of these conversations. 

6. Pay Down Debt 

Start paying down your debt aggressively in your 30s and 40s. If you have multiple types of debt, for example, a car loan, credit card debt, and a student loan, using the "7% rule" can help you prioritize which debt to pay down more aggressively. The 7% rule assumes that the stock market will make returns of 7% annually. Therefore, when you have debt that has an interest of 7% or more, you should prioritize paying it off more quickly. On the other hand, if your debt is below 7%, it's ok to continue to make the necessary payments on it, but you don't have to be so concerned about aggressively paying it off. Instead, focus any additional money on investing. At lower interest rates, there's a greater chance your long-term investing returns will earn you more money than the money you'd save by paying off your low-interest debt.

For example, let's say you have two current debt accounts; a car loan at 3.5% interest and a credit card at 12% interest. Using the 7% rule, it makes sense to put more money toward the credit card that has 12% interest than the car loan at 3.5% interest. 

7. Increase Your Income 

Increasing your income in your 30s and 40s is a great goal. By this age, you've got 10-20 years of work experience under your belt, and negotiating a raise, looking for a new job, or adding a side hustle is a great option. I say this all the time, and it bears repeating: you can only save so much money; to truly become financially free, you have to earn more money. 

If you are going to negotiate a raise at your current job to increase your income, consider the following before you set up an appointment with your supervisor:

• How long have you been with the company? Loyalty is meaningful to companies. It's more expensive to hire and train someone new than to offer a raise to a reliable employee. Review your length of time with the company in addition to responsibilities you've taken on over the years as additional factors in your ask. 

• What raises have you received in the past? If you've been getting the standard 2.5-3% "cost of living" increase, you definitely need to negotiate a raise. With inflation increasing at high rates (2021 inflation was almost 7%!), you are taking a pay cut without a substantial raise each year. Consider whether or not you would have stayed at your current job if you had your starting salary. If the answer is no, get yourself a raise.

• Do your homework. Ask colleagues about their pay and look at sites like glassdoor.com for average salaries for people in your field to help you gauge an appropriate pay raise for your job. The often-touted 76 cents-on-the-dollar statistic often comes from women leaving the workforce for some time and re-entering at their former salary.

• Don't get discouraged. If you are told no, don't get discouraged. See if there is a possibility for a raise over the course of several years; e.g., 5% a year for three years instead of a 15% raise outright. Ask for other fringe benefits the company may be more willing to give you, such as additional vacation days or paid continuing education. If neither is possible, start shopping for a new job. You are worth it.

If you plan on leaving your company to increase your income, there are a few things to consider when job shopping.

• Prepare your resume. Make sure all of your relevant experiences are on your resume. For many of us, we've been at jobs for 5- 10- or 15- years, and we might not have thought about updating our resume.

• Clean up your LinkedIn. Even if you don't use LinkedIn regularly, many companies and recruiters look at your profile on that site. Make sure you have a professional headshot (that isn't a crop of you at a wedding in your 20s), a keyword-rich headline, and connect with people at and outside of your current company.

• Consider benefits. Before your job search, make a list of "must-have" and "nice to have" benefits. Things like work-from-home flexibility, pre-loaded time off, and retirement matching are benefits lots of people in their 30s and 40s are interested in. 

8. Save For Children's College 

In the United States, the average cost of college is $35k per year, with an annual increase of 6.8%. If you have children and want to help them with their higher education expenses, you need to start saving for their college ASAP. I'm a huge fan of parents setting up a 529 plan. A 529 plan is a tax-advantaged account where anyone can contribute to a child's higher education. If the 529 is used to pay for qualified education expenses, no federal income taxes are owed on the distributions, including the earnings (!). The money can be invested within a 529 plan, and funds can be used for things outside of college tuition. Money inside a 529 plan can be used for elementary school tuition, room & board, books, or the cost of an apprenticeship program if your child decides college isn't the best choice for them.  

9. Spend & Save Intentionally

In your 30s and 40s, you are more likely to have disposable income (yay!). Think about what you want your additional revenue to do for you. Maybe you are a Netflix-n-chill extraordinaire who excels in collecting luxury pajamas. Perhaps you are like me, and you like to save up for a year or two and take a decadent vacation. Make your splurges serve you and your values. Do a quick audit of big purchases you made last year. How many of them continue to make you happy? How many of them were in alignment with your values? Spending and saving intentionally is key to continuing a healthy relationship with money. 

How to Set Financial Goals & Stick to Them

While I've listed nine financial goals in your 30s and 40s, the next step is setting and achieving them. As a financial therapist, I recommend choosing one financial goal to work on at a time. Review the above list, and decide which goal makes the most sense to focus on first. Make sure you have a deadline to achieve that goal, and create small steps along the way to help you achieve the goal. For more information on financial goal-setting, you can click through to this podcast and post all about how to set and achieve financial goals. 

Clarify Your Money for Millennial Couples

Something that you need in your 30s and 40s to achieve the goals discussed in today’s post is a spending plan. Agreeing on a spending plan is the foundation of cultivating a shame-free relationship with money in your romantic relationship, and it helps you see what financial goals you need to prioritize. For couples in their 30s and 40s, I'm going to bring you a self-paced course to help you understand how your emotions and values impact your relationship with money. Clarify your Money helps millennial couples create a values-based spending plan that works for their unique situation.

Some links included in this article are affiliate links, meaning I may earn a commission at no additional cost to you.

• TRANSCRIPT

  When you are in your 30s and 40s, it's so important to set financial goals that not only address what's going on in the here and now, but you're also taking proactive steps to prepare financially for the safety and security of your future. In today's episode, I'm going to be covering some financial goals I want you to be considering if you're in this age bracket. And of course, take them with a grain of salt, they might not apply to you, but I like to kind of create some guidelines so that you can be thinking ahead to see how close or far are you from these things. So as I get into these nine different things to consider, the through line here that I'm not specifically addressing is that you have to be healthily talking about money and agreeing on a spending plan, if you are in a romantic partnership, so for a lot of people in their 30s, and 40s, they are cohabitating they are married, not everyone. But if that's you, I want you to keep that kind of in the back of your mind that in order to really achieve these goals or work towards achieving these goals, you have to have the capacity to be talking to your partner about these things. And if you want help, I have been sharing that I am opening up my course clarify your money for couples, go ahead and go to my website, MindMoneyBalance.com/Clarify to learn everything you need to know. And with that, let's get into these goals in your 30s and 40s.

  The first thing is creating a healthy relationship with money. A healthy relationship with money is what happens when you can not only have and adhere to your version of a personalized financial plan, but also emotionally feel good about that plan. If you've been here for a while, you know that I believe that financial wellness is not just about the numbers, it's making sure that your emotions and your values are in alignment with those numbers. And so while I have a full piece on my blog about how to create a healthy relationship with money, I'm going to pull from that and summarize some of the key takeaways from that here. One thing that I see come up all the time is unhealthy or maybe unhelpful is a better term thoughts when it comes to our relationship with money. These types of unhelpful thoughts or unhelpful stories can cause or perpetuate an unhealthy relationship with our money. These things sound like, Oh, I could do x if I earned more money, or I won't be able to do Y with my spouse because I'm bad at money. Or I don't have to worry about my credit card bill. My boss said the bonuses are coming soon. And on the surface, these might not sound unhealthy. But what happens is, if we start to say them repeatedly, we start to believe them. Instead, something I invite you to do is separate your thoughts from your facts. Sometimes your thoughts are truthful. But sometimes they are like you know, dramatized stories that have just popped into our heads that we have told ourselves enough times, and then we start to believe them. So if your thoughts are unhelpful, I invite you to like shake out like the the vision that's coming to mind is like a person kind of mining for gold, I want you to like scoop up all of the stuff in your mining pan, and shake back and forth all of the crap and let it all fall away the things that are not true. The things that are negative the things that are unhelpful and just stick with whatever nuggets are left over that are neutral, truthful and maybe even positive. So let me give you some examples. Examples of reframing unhelpful money thoughts could be, I could save more if I earn more. So this thought might not sound you know unhelpful at the surface. But what this person is saying is I'm unable to save right now, because it's not even worth it because I don't make enough. Instead, what they could say is something truthful, which would be even if I save $30 per week, or $30 per month, it is a good start. So instead of saying, Oh, it's not worth it to save $30 They reframe it to, it's okay for me to save even if that amount is small. Another example would be, I'll never be able to take a trip to South America with my spouse. How much truth isn't there, we want to shake it out, get rid of the numbers, get rid of the always those are kind of like key qualifying words that let you know that there's something wrong with this thought and reframe it to something more truthful. Okay, let's look at our money. If we save $140 a month, we'll actually be in really good shape to take that trip in a year and a half. And at the time of this recording, there's a good chance that you might want to wait a year and a half before you're taking some big trip because we don't know how things are gonna shake out And finally, I don't have to worry about that credit card bill, my boss said bonuses are coming soon, this thought might not be helpful, because you're relying on something else in order to pay your credit card bill or in other words, this is kind of like magical thinking in a way, like, I'll just take out a bill or I'll just go shopping, I'm sure I'll figure out a way to make ends meet instead of taking a little bit more ownership over that bill. So it might sound like whether or not bonuses are coming, my credit card bill has to get paid first. So these are slight reframes. But you can see how they move from like, negative or unhelpful into more neutral or maybe even positive territory. Again, if you want to learn more about creating a healthy relationship with money, I will link my piece to that full blog post in the show notes.

  The second financial goal for your 30s and 40s is bulking up your emergency fund when you're in your 30s and 40s. Having an emergency fund is crucial. So you can cover your financial needs. If something were to happen to your income, an emergency fund is cash saved in an easily accessible savings account. I personally like to use a high yield savings account for this, you know, you're never gonna really outrun inflation here, but it's so much safer than having it in the market. So I know it's boring, but it is just something you need. And having an emergency fund really helps to create that financial safety net when life happens. So what this does is gives you the ability to pull from that cash account, instead of putting it on a credit card. So let's say you lose your job, or your kid gets sick, and you have to stay home with them longer than expected. And you have to take FMLA and you're not getting paid, or you get in a car accident and have expenses above and beyond what your insurance covers. Those would all be considered emergencies where you have to dip into your savings account. And if you don't have an emergency fund, what you're probably going to do is something like pull out a personal loan or put it on a credit card, which can be good temporary fixes. But the long term consequences is that you're paying a ton in interest on those types of things. So while experts tend to recommend like a six to eight month emergency fund, if that feels really overwhelming, if you're looking at your emergency fund right now, and you have a couple 100 bucks in there. First of all, you're in good company, as I mentioned, in last week's what's going on with millennial couples, 57% of millennials have three months or less. In an emergency fund, most people have less than $1,000. So you're in good company. So instead of focusing on oh my gosh, I need 10s of 1000s of dollars in our emergency fund that feels really out of line, I'm never gonna get started. Start with smaller stair step goals or ladder goals. Start with $1,000. Once you have $1,000, then move towards saving a month of expenses. Once you have a month of expenses, then to et cetera, et cetera. If you're a partner, you need to talk to your partner about what feels best for you. If you're self employed, you're probably going to want a bigger emergency fund. If you're in a high demand like tech job, you're probably not going to need quite as much because it's probably going to be easier for you to get a job. Those examples are if you lost your job, but if you are disabled, which is far more likely, you are going to definitely want that emergency fund. And especially if you have things like children or a mortgage, those expenses don't just stop because you lose your job, you're definitely gonna want to bulk up that emergency fund.

  All right, the third thing is getting life insurance. Life insurance is so important for people in their 30s and 40s. And in 40s, and becomes so much more vital if you are financially caring for somebody else. A child, a disabled sibling, an aging parent. If you have children or step children, you really want to make sure that your life insurance policy will financially provide for them until they are the age of 18 or probably older, because let's be honest, like at the age of 18, something magically just doesn't happen that suddenly makes us financially independent, but you want to make sure you're at least getting them through those those minor Age years. And you might want to be saving even more or getting out a bigger policy rather if you're going to pay for their higher education. If you're a D.I.N.K. (Dual Income No Kids) like me, you still need a life insurance policy that would cover your partner to make sure that they can continue to live the same lifestyle like in the event that I were to die. I want to make sure that my spouse can stay in our current home, make sure that they have all of their bills paid and covered and that they will be financially okay without me. It sounds really grim. But it is honestly one of the best peace of mind things that you can do for yourself. So life insurance is exactly what it sounds like you pay a monthly price or a premium for a policy that usually lasts 15 to 30 years. In most cases, you do not need a whole life policy, you need a term policy. And that term is usually a 15 year term or a 30 year term. So you lock in your rate for those 15 years or for those 30 years, and you pay a monthly premium. If you die during that period that the policy is active, then a lump sum of money would be paid out to whoever you have listed as your beneficiary. We'll get into that in one moment. How much you need depends on so many factors, I cannot tell you you need x or you need y you need to figure that out for yourself. But I would just want to like throw out some numbers here just to kind of get your brain on board with what you might need. If you have a child, consider that in 2017, it cost $233,000 to raise a child from infancy through the age of 18. So at minimum, you need a policy of at least 235k for each child you have. Now that data is what five years old at this point inflation has gone up, I think you need probably half a mil to mil per child. Again, I'm not a life insurance salesperson, figure it out on your own, talk to a rep. But those are just some numbers you want to consider if you're a D.I.N.K. like me, consider how much money would be required to pay off your house. If you own it or allow your partner to continue renting in their current city you want to build in things like inflation. And you also want to consider how much it would cost to cover your outstanding loans such as car loans or student loans. This might sound really overwhelming. But the good news is for a healthy 30 or 40 something a life insurance policy is a relatively low cost way to make sure that you're protecting your loved ones in the event that something happens to you. Because I can tell you, there is nothing worse than when something terrible happens and you are stressing about the finances. You want the finances to be the last thing on your loved ones plates in the event that you pass away. If you are traditionally employed, check with your HR department first to see if they offer any life insurance benefits. I know when I was traditionally employed, I got like 500k of life insurance for like, I don't know, five bucks a month, it was super, super inexpensive. So check there. And for me, my partner is traditionally employed, and I'm able to get some life insurance through them, I don't get enough. So I have a separate policy but it gives you a little bit of peace of mind. So start there and then you can kind of look for brokers outside of that.

  Alright, moving on to the next thing, which is getting a will and trust. I mentioned earlier that I'd be mentioning what the heck a beneficiary is, we'll get into that here. So just like life insurance, getting a will and trust when you're in your 30s or 40s is something that people are like, all due later, but it's also so so important. Wills and Trusts are legal estate documents that help your surviving family know how you want your assets to be distributed. And having these documents in place is peace of mind for your family and prevents your assets from being tied up in court, also called probate in the event of your death. A will is a legal document stating how you want your things handled. So for example, let's say you want a celebration of life out and outdoor park that is really meaningful to you. Instead of a traditional Catholic funeral. Let's say having this spelled out in a will ensures that your loved ones can honor your wishes. Whereas a trust is a separate legal entity, where a trust door or grantor gives the trustee the right to hold and manage their assets for the benefit of a specific purpose or person. A trust a Living Trust rather, is amendable aka editable, so you can go in and change it as your life circumstances change. If you sell a house and that's no longer a part of your assets, you can change it if you decide that the person that you are going to leave some of your money to turns out to be a total shithead and you want to get them out of your trust you can do that. If you decide that there is a charity or organization that is suddenly really meaningful to you. You can add that to your trust. It is not like this, you know written in stone document you can edit it or amend it. Having a trust in place also can help you if you become disabled or incapacitated, having whomever you appoint as the trustor can help distribute money to appropriate people or help manage your affairs, because statistically speaking, it's more likely in your 30s or 40s, that you will become disabled or incapacitated, than die early. I know that sounds so grim, like, so just, if you're listening to this, and you're like, geez Linds usually talks about like, way more exciting things. Here's the thing, these are things you hope you never ever have to use. But having them in place is such a gift for your future self and in the event that you are disabled in the event that you pass away, having these things in place is such a gift. And a beneficiary is who you want your money or things going to. So I mentioned earlier, in life insurance, you you list, who that money would go to in that policy as the beneficiary, what you can do is list your trust. So for me, I would have the Lindsay Bryan-Podvin Trust is who my life insurance goes to. And then my life insurance monies would basically all go into this trust. And then from there, the trust gets divvied up in the way in which I intend, okay, so I know these are heavy things, but they are so important, and especially in your 30s and 40s. I cannot stress enough how important it is to get these things done. Getting a will and trust is fairly easy. Again, if you're traditionally employed, your employer might actually have a legal benefit, where you can get some of these things done for a low cost. Otherwise, I would say trust kind of run in the 1500 to $3,000 range, unless they're incredibly complicated. And you could probably do it on your own. But to be honest, if you have if you have the means it is definitely something worth investing in.

  Speaking of investing segue, you gotta invest in retirement in your 30s and 40s. That's the next thing I want to talk about. Well, you should continue to contribute to retirement as you age into your 50s and 60s. The power of investing comes from time, which is compound interest. Compound interest is the addition of interest on additional money or interest on interest. Here's a hypothetical to help you see the magic of compound interest. For example, let's say you have $1,000 and an investment account that earns 7% in annual interest. This is hypothetical, because the markets are go up, they go down there is nothing that automatically gives you 7%. It just will help your brain get on board with these round numbers. So you've got 1000 bucks in an investment account that earns 7% in annual interest. So in the first year, you'd make $70. So your new balance is $1,070. So in year two, you have $1,070. And you're earning 7%, again, on that new interest, which is $74.90 giving you a new balance of $1,144 at the end of year two, so you can see you're earning money on money on money. And compound interest works it's magic when you have time to let it build and adding additional money to your investment accounts. Hopefully inside a retirement account like a 401K, IRA, Roth IRA, or 403B is so important important because you need time to make investing really work for you. So doing it in your 30s and 40s isn't not too late, it is so powerful, get going on it. If you are self employed therapists you can grab my one hour workshop on what accounts are available to you why keeping all of your money in cash is really risky and quick calculators or calculations to help you figure out how much money you need in your specific life to retire safely. I will link to it and therapist or not. If you are really interested in learning more about investing I highly recommend taking the Invested Development course by Amanda Holden. She is a former investment manager and now teaches women specifically but honestly all genders can use this information as a tool to build wealth. Her goal is to democratize and deliver financial education to those previously left out of this conversations. I will link to that as well. It is a course I took earlier this year. I had honestly been doing most of the things that she recommends. But it was so helpful just to really suss out in my brain. Oh, I am doing this. For this reason, this makes perfect sense. For me, this feels really good. So it was doing a lot of the things that now I feel so much more confident about why I am doing those things. So again, invested development, I'll link to it in the show notes.

  All right, we're getting towards the end, take a deep breath, grab a sip of water, we're getting there Party People pay down debt, start paying down your debt aggressively in your 30s and 40s. If you're able, and if you have multiple types of debt, for example, a car loan, credit card loan, student loan, using the 7% rule can help you figure out which debt you need to kind of focus on and pay down more aggressively. The 7% rule assumes that the stock market will annually make at least 7% returns. So therefore, when you have debt that has an interest of 7% of more, you should prioritize paying it off more quickly, because you won't be able to make that type of money in the stock market. And if you're like, Well, I'm a stock trader, I can do day trading. Yeah, great. And statistically speaking, between two and 7% of stock traders beat the market. So that's why I'm talking about just use the market as a benchmark. So if you have debt that is higher than 7%, you need to be paying that off more quickly. On the other hand, if your debt is lower than 7%, it's okay to continue making the necessary payments on it, like you'd want to miss a payment, you'd want to skip a payment. But you don't have to be so concerned about aggressively paying it off. Instead focus any additional money on investing. At lower interest rates, there's a greater chance that your long term investing returns will earn you more money than the money you'd save by paying off your low interest debt. For example, let's say you have two different outstanding debt, you've got a car loan at three and a half percent interest and a credit card at 12% interest. Using the 7% rule, it makes more sense to put money additional monies towards that credit card that has 12% interest than the car loan that has three and a half percent interest. Does that make sense? Because it's the 12% is obviously higher than 7%. And the car loan is three and a half percent, which is lower. Cool. Cool. All right.

  Next thing you need to focus on in your 30s and 40s is increasing your income. By the time you're in your 30s and 40s, you got like 10 to 20 years of work experience under your belt. So negotiating a raise, looking for a new job or adding on a side hustle or consulting arm of what you do is a great option. I say this all the time, but it bears repeating. You can only save so much, you can only cut your spending so much. To truly become financially free, you have to increase your income, you have to earn more, you just do. And if you're going to negotiate a raise at your current job to increase your income, I've got a few things you can kind of ask yourself before you set up an appointment with your supervisor. One, how long have you been with a company? Loyalty is so meaningful to companies, and it's more expensive for them to hire and train somebody new than it is to give you a pay raise? Okay, so review the length of time that you've been with your job in addition to any new responsibilities you've taken on as additional factors in why you deserve more money. Two: what raises Have you received in the past, if you've been getting a standard two and a half to 3% cost of living increase, you need to negotiate a raise. With inflation increasing at high rates last year, I think we touched or went over 7% Normally, you know inflation is like hovering around two and a half or 3%. So if you did not get a pay raise of at least 7%. You are taking a pay cut. So if you're just getting this cost of living increase, yet, congratulations, you got a pay cut. So consider whether or not you would have stayed at your current job if you had your current salary. If the answer's no time to get a raise. Three: Do a little bit of homework. Ask your colleagues how much they're getting paid. Look at sites like glassdoor.com You know, comb through Reddit to see average salaries for people in your field to help you figure out what is an appropriate pay raise for your job. The often touted $7,600 statistic that women earn compared to men often comes from women who leave the workforce and reenter at their old salary. So do not come back earning less money, get that raise. And finally don't get discouraged. If you're told no. It happens. It's alright see if you like your job and it feels like a good fit. See if there's A way to negotiate like a stair step raise. So maybe they can't give you a 15% raise outright. But maybe they can give you a 5% raise each year for three years. What are other fringe benefits that you might be willing to get? Like? Can you get some additional paid vacation days can they pay for some of your continuing ed, if neither is possible, honestly, search shopping for a new job, we are really at a time where workers are finally understanding the their value in the workplace. So go shop around, tell friends and family, you're on the move, you know, respond to a few of those LinkedIn recruiters get get yourself out there because you really need to be compensated fairly and if your job is telling you now guess what, by go find someone else.

  And if you're planning on doing that you're planning on leaving, here are a few things to consider. Get your resume dusted up, make sure all of your relevant experiences are on your resume. For many of us, we've been at jobs for 5, 10, 15 years, we might not have even thought about updating our resume. So go back there, make sure you add new job positions, credentials, work experience, etc. Dust up your LinkedIn even if you don't use LinkedIn regularly, many companies and recruiters are going to kind of cross check what's going on on that site. So make sure you have a professional headshot know that crop of you at your cousin's wedding in your 20s does not count as a professional headshot. Get a keyword rich headline, and connect with people at and outside your current company on LinkedIn. And when I say keyword rich headline, I don't want you just to say like Lindsay therapist, cool. Instead, say Lindsay, financial therapist, speaker, author. For you, maybe you are a sales manager. So you would say sales manager experienced in B2B sales and trained 30 people, I don't know I'm making things up. But go to LinkedIn, look at a few people's headlines and profiles. And then you'll figure out what you need to add. And finally, if your job stop shopping, consider other benefits before you job search, make a list of must haves and nice to haves. So things like work from home flexibility, pre loaded, time off, and retirement matching are benefits that a lot of people in their 30s and 40s are interested in. When I say pre loaded time off. What I mean is that oftentimes when you're starting a new job, we like cool, you get three weeks of paid vacation, but you accrue it at you know two days a month. Well, if you're in your 30s and 40s, especially if you've got a kiddo at home, like you need that time now. Because we don't know when things are gonna happen. So say great, I love that three weeks, but you need to load in two of those weeks. On day one, I cannot wait to accrue my time off. So keep that in mind.

  All right, next thing to do financial goal in your 30s and 40s is saving for your children's college. In the US the average cost of college is $35,000 per year with an annual increase of 6.8%. Boo barf. If you have children, and you want to help them with higher education expenses, I can not recommend highly enough starting to save for their college ASAP and getting a 529 plan set up. A 529 plan is a tax advantaged account where anyone can contribute to your child's higher education. So if your parents want to contribute if a neighbor wants to contribute if their tutor wants to contribute cool, they can all put money into this 529 plan. And that 529 plan can be used for any type of qualified education expenses, and you don't pay taxes when you pull money out or take out distributions including on the earnings. Remember, I've talked about compound interest, you can actually invest within a 529 plan. And whatever money you earn, you are not taxed on that is huge. So other things that you can use a 529 plan for outside of college tuition, like if you've got a kid who is not going to go to college, you can use it for things like an apprenticeship program. If your child decides college is not good for them. Maybe you've got a kid who needs additional supports and you want to send them to private school, you can pull up to $10,000 a year from a 529 plan to pay for things like private school tuition. And then when it comes to college, you can also use money within that 529 For things like room and board books, etc. So, get saving, put in a 529 plan, use those tax things to your advantage.

  And finally, the ninth thing is spend in save intentionally in your 30s and 40s you hopefully have more disposable income. So think about what do you want that extra money to do for you? Maybe you're Netflix and chill and you love collecting luxury PJs, great. If you're like me, you'd like to save up for a year or two. So you can take like a nice juicy 10 to 14 day vacation. Make your splurges serve you and be in alignment with your values, do a quick audit of big purchases you made last year, how many of them are continuing to make you happy and bring you joy and feel really good? How many of them were in alignment with your values, spending and saving intentionally is key to creating a healthy relationship with money in is a financial goal I definitely want you to work on. So this is kind of like a bonus here. So setting financial goals is great, but you also have to stick to them. So as a financial therapist, I recommend kind of thinking about the goals that I listed out as examples and decide what's the most important for me first, or if you're in a partnership, what's the most important thing in our relationship, maybe we first need to really focus on an emergency fund cool, pick one goal, pick a deadline that you want to work on achieving that goal by and create small steps along the way, I have a full post that I will link to on financial goal setting that you can click through and read about.

  So I mentioned at the top of this episode, but it bears repeating something you need in your 30s and 40s. To achieve all of these goals is a spending plan. You have to know what money is coming in, and what money is going out so you can prioritize all of these different financial goals. So if you are in your 30s and 40s and you're in a romantic relationship, I am so excited to bring to you a live course that helps you understand your emotions, your values and how they impact your relationship with money. So you can actually have a spending plan that works for your unique situation. Head to MindMoneyBalance.com/Clarify To learn everything you need to know about this live course. I would love to see you join me there if these goals sound exciting, but you're like wait, how much money are we making and where the heck is it going? I cannot wait to see you again, MindMoneyBalance.com/Clarify