I'm turning 30 ... what should my money priorities be?

Now is the time to assure your financial future.
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You're entering your 30s. By now you're maybe more settled in your career and (hopefully) find yourself earning more money than ever before.

At the same time, your 30s are a time of greater financial responsibilities. You may have started a family, or have bought – or are thinking about buying – your first home.

So while you might be earning more than in your early 20s, financial pressure comes from more directions than ever before. 

How do you figure out where your priorities should lie?

As someone who passed the barrier into my 30s a couple of years back (OK, nearly 3 years), I'm here to explain how anyone in the same boat should be prioritizing their finances.

We need to talk about retirement

It still seems a long way off, but if you haven't started saving into a pension yet, you really need to start.

Someone who started saving in their 20s could end up with tens or even hundreds of thousands dollars more than someone that began in their 30s because of compound interest.

Getting it going in your 30s isn't too late though, so sign up for your company 401(k) and get an IRA (regular or Roth) as soon as possible.

Here's how much JP Morgan says you should be saving depending on how much you earn, and when you start.

Make use of tax-free options for kids, college, health

My son is about 2 years old, and I'll always remember the moment I realized: "Holy crap, childcare is expensive!"

We're talking between $200 and $400 a week in the Twin Cities. So unless you have grandparents who are willing to spend every moment with your little one while you work, this is the reality you face.

It's why you should take advantage of Dependent Care Flexible Savings Accounts if one is offered by your employer. It allows you to save up to $5,000 a year per household of your pre-tax income that can be used to pay for daycare costs.

And if you're starting to save for their college education, look at a 529 plan. Saving For College has more info here, but basically you save your post-tax dollars into the account and the investment growth is tax-free. It also won't be taxed when it's withdrawn to pay for your child's college tuition/accommodation costs.

Speaking of tax efficiency, health savings accounts (HSAs) allow you to put pre-tax money away, which can be used to pay for your medical care.

Building up that money now can pay dividends (no pun intended) when you're older and likely to require more medical attention.

Value your time

Hitting my 30s has prompted a reassessment of what's important – and I've come to the realization that I'm on the "time > money" side of the fence.

Most of you will already be doing a lot of your finances online, but maximize your time by setting up auto-payments for things like credit card bills, savings contributions and non-contract cellphone plans.

Not only does this avoid any late penalties, it means you can focus on growing/saving your money when you do come into login to your financial accounts, rather than dealing with the hassle of bill payments.

Get invested

Let's face it, because of interest rates being so low, regular bank savings accounts give you diddly-squat in interest on your savings.

As such, it makes sense to put at least some of your savings to work in investment accounts, where returns from the stock and bonds market can be greater – albeit come with the risk you lose money.

If you don't want to commit too much to this, consider a passive-savings app like Acorns. This rounds up your everyday spending and puts it in a savings account, which is invested for you based on your risk profile.

You can find out more about Acorns and other investment apps here.

Protect yourself from disaster

You've got a house, car, child(ren) and a whole load of possessions. That means quite a lot hangs on you staying healthy and in work.

It'll cost you money, but getting things like long-term disability and life insurance can protect you and your loved ones should the worst happen.

What's more, as Nerdwallet explains, life insurance is cheaper the younger you buy it, saving you a lot of money down the line and allowing the money you contribute to it now to accumulate in value.

Speaking of disaster, this is about the time you need to increase the amount of money you have in your "emergency fund."

Particularly if you're a homeowner, there's a whole lot more that can go wrong now, so make sure you have enough money set aside to handle any maladies that befall you.

Pay down debt

All of the savings help above means nothing if you're crippled by debt, so if you're entering the new year still struggling with credit card and loan borrowing, now's the time to get a handle on it.

The perceived wisdom is to focus on paying off your high-interest debts, as these cost you more. But there's an interesting study from Northwestern University that found people are more successful at getting out of debt by paying off their smallest debts first, irrespective of the interest rates.

That's because paying off an entire debt provides a psychological boost that motivates people to pay off other, larger debts in the future.

The Tip Jar is Bring Me The News editor Adam Uren's advice column on how to spend, save, and live with confidence. Read past columns here.

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