Financial Advice for Thirtysomethings

My colleague Debbie, who is in her mid-twenties, has decided postponed graduate school for a year.  Part of her concern is accumulating even more debt from graduate school to accompany her already high undergraduate debt.  In chatting with her, another colleague Jeanine was curious about what financial and life I might have for her. Jeanine is in her mid-30′s, has already completed an MBA, has a 401(k) and mutual fund account, and is contemplating buying a townhouse.  Unlike Debbie, part of Jeanine’s contemplation is whether to take a year off of work and travel or volunteer for a year.  I didn’t feel comfortable “offering advice” to someone who is less than 10 years younger than me, but these were some main points from our discussion:

–Prioritize eliminating most debt — Jeanine was able to payoff her student loans about 3 years after finishing her MBA, the accelerated repayment schedule gave her some flexibility once the loans were paid and allowed her to put money aside each month for saving and investment once she no longer had loan payments.

–Have a larger emergency fund — Jeanine experienced the dotcom boom and bust and has had many friends who have experienced prolonged layoffs.  As a more experienced person who wants to choose her career transitions wisely, Jeanine has more than 6 months of expenditures set aside.

–Be serious with your career — Jeanine’s first few years out of college were spent bouncing around from one un-serious job to another.  However, after completing her graduate degree and honing in on her area of expertise, she has moved up the career ladder in recent years.  If you are seriously career minded, this decade is an important one.

–Save and invest for future flexibility — Jeanine would like to take some time off in the near future and travel for a bit.  She has been saving furiously to allow for this.  Most of her friends are planning to have children in the next few years and are trying to integrate this into their financial planning.

–Take care of your health — when I was Jeanine’s age, I started experiencing lower back pain that didn’t seem to go away.  Turned out almost everyone in my office had lower back pain, a consequence of too much sitting, too little exercise during the day, stress and (for me) high heels.  Although my situation was not too serious, it led me to understand that I would not be happy to work in a high stress corporate environment indefinitely and helped me to focus my priorities.

posted at this week’s Carnival of Personal Finance