Living on Your Own in Your 30s – Financial Considerations

Living on your own in your 30s presents a unique set of challenges and opportunities. It is a perfect time to learn more about yourself.

Living on your own at this stage is a great way to tune out the world. Being alone also affords you time to reflect on your life and your relationships.

It is also an opportunity to make new friends. There are some financial considerations to keep in mind before making the move.

Read on to learn more about the various dynamics and benefits of living on your own in your 30s.

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Financial Considerations For Living On Your Own In Your 30s

Your thirties are a critical time in your life, and your financial preparations should include the following.

You’re likely to have a growing family and want to secure your future by planning for your needs.

You may even want to skip buying a starter home and purchase a larger one, but home prices and mortgage rates are high. You may also be planning a wedding and intending to splurge.

Sadly, the average American wedding costs $35,000 and is the largest expense that millennials face.

It is important to set aside an emergency fund of at least three to six months of living expenses.

It is important to revisit this goal regularly, especially as expenses continue to rise.

Experts recommend putting this money into an accessible savings account and finding high-interest accounts.

Currently, the national average interest rate on savings accounts is 0.09%, but there are high-interest savings accounts that offer up to 2.55%.

One of the most important financial considerations for living on your own in your thirties is buying a home. You should aim to purchase a home within 20-25% of your monthly income.

You should also have enough cash to pay for closing costs.

Moreover, you should try to find homes that reflect a “right now” mentality, as it is unlikely that your expenses will remain the same as they were in your 20s.

Avoiding being “house poor”

House poor  is a financial situation where you’ve spent most of your income on housing.

Your monthly housing budget should be approximately 30% of your income.

If you find that you’re already “house poor” despite living on your own, you may have overspent on certain purchases, or perhaps you didn’t plan your monthly spending.

In either case, you can re-assess your budget and work towards getting back on track.

Many house poor people struggle to make ends meet, putting all of their essentials on credit cards and accruing finance charges.

This puts them further behind on their financial goals. Housing costs are a major factor in your budget, and there are a few steps you can take before taking out a home loan to prevent being house poor.

If you’re employed, you may need to consider seeking a second job or getting a side gig.

If you’re worried about being “house poor,” the first step is to make a housing budget.

You need to find a home that will fit your budget, but at a price you can afford comfortably.

You may need to rent while you look for the perfect home. Take a free online home buying course to learn more about this process and avoid being “house poor.”

Becoming “house poor” is a common situation for people who live on their own and are in their 30s. House poor is a term that’s akin to being “over-indebted” by the mortgage payments.

However, this does not mean that you should spend more than 30% of your income on housing.

Avoid Being Cost-Burdened

If you’re spending more than 30% of your income on housing, you’re considered to be “cost-burdened.”

But you need to remember that the financial situation of every individual is different and that this is only a guideline, not an exact rule.

Having a home requires upkeep and maintenance, and if you’re not prepared to take on the responsibility of maintaining it, then renting a house may be the best option.

In any case, make sure to wait until you’re ready to purchase a home.

Mortgages are generally available for 35% of gross income, but you must have good credit and stable employment.

Create an Emergency Kit

An emergency kit is useful for life’s emergencies. The kit should contain items that will help you stay safe and comfortable during an unexpected situation.

You might need to survive for several days without food, water, shelter, or electricity.

It’s also wise to keep some cash on hand so you won’t have to ask family members for financial assistance.

Making New Friends

In the past, it’s been difficult to meet new people, especially as you’ve grown more comfortable in your own skin.

Now, you’re in your 30s, and making new friends makes more sense than ever. Your 30s are a time when you have a better understanding of who you are and what you want in a relationship.

But to maintain good relationships with new people, you need to know how to make them stick.

How to Make Your Relationships Stick

First, consider reaching out to your old friends. While your circle of friends may be smaller, you can still connect with them. Reach out and share activities.

If you’ve lost touch with old friends, use social media to reconnect with them.

You’ll find plenty of people who don’t share the same interests as you, and you’ll be surprised how easy it is to make new friends!

If you’d prefer not to go to a party, you can try attending events in your city that bring people together.

Joining a book club or vision board party is a great way to meet new people. You can also invite friends if you happen to share common interests.

Lastly, you can try out new apps like Bumble BFF  or meetup.com  to make new friends.

Be Intentional About Connecting

If you’re in your 30s and are not near your old friends, you can try joining a social group. This way, you’ll feel like part of the community and have new friends.

These groups also help you feel connected to your new surroundings.

The sense of community and belonging is crucial when you’re making friends on your own. You might also be surprised to discover how easy it can be!

Another way to make new friends when you’re living on your own in your 30s is to join a club or volunteer with an organization.

These organizations match volunteers with like-minded individuals. If you don’t have time to join a club, consider volunteering at a community college.

There, you’ll meet people from different backgrounds and share similar interests. You’ll find new friends and get to know a whole new circle of people.

Buying A Home

Buying a home when you’re living on your own in your 30s can be a wise investment if you’re going to stay in your current location for at least three years.

Before making the move, however, you must evaluate your salary and whether it will grow in the near future.

If your salary is low, consider paying off student loan debt, which can free up income for the purchase of a new home.

Saving at least 20% of the purchase price can help you avoid paying private mortgage insurance. Keep in mind that closing costs can add 2% to 5% to the purchase price.

As mentioned above, buying a home in your 30s is a wise decision once you have paid off most of your debts.

In addition to a down payment, you will also need a housing loan to make the purchase.

As with any loan application, banks will check your credit score to determine your repayment capability and trustworthiness.

By the time you reach your 30s, you should have paid off most of your debts, and your credit score will be more stable than it has been in a decade.

Buying a home when you’re living on your own in your 30s is an exciting step, but it’s not for everyone.

Think About Where you Will Leave in the Medium to Long Term

For younger professionals, it’s best to think about where you’ll be in three to five years. A common compromise is purchasing a condo that can be rented if you change jobs.

A mortgage payment of less than a third of your income may not be possible, so make sure you can pay the full mortgage amount.

While a home loan may be out of your reach for a young professional, it’s better to rent for a while until you have the money to make the purchase.

By renting a property for several years, you’ll be able to save a significant amount of money for a down payment and get the house you’ve always wanted.

There are also some advantages to buying a house in your 30s if you’re self-employed.