Here are the ten best ways to stay out of debt in your 30s.
- Create a Budget
- Set Financial Goals
- Never Spend More Than You Earn
- Pay Off Your Debt
- Save Money in an Emergency Fund
- Save Money in a Rainy-Day Fund
- Improve Your Credit Score
- Invest for Your Retirement
- Save for Medical Costs
- Save for Big Purchases
Below, we will go into detail about how you can use each of these tips to help you stay out of debt.
Create a Budget
One of the first things you need to do to stay out of debt is create a budget. Whether you are debt-free or looking to get out of debt, this is essential. Creating a budget is much simpler than most people think, but it does take time.

Follow these simple steps to create your budget:
- Schedule a day to devote to creating a budget.
- Print out any bank statements from the past few months to a year.
- Collect all the receipts that you can.
- Record your income. Are you paid every week? Every two weeks? Every month? Does it stay the same, or does it vary?
- Add up all your expenses. Again, it is best to do this in categories.
- How much is spent on living expenses? These include rent or mortgage, utilities, food, etc.
- What about the money spent on wants? These include things you purchase because you want them, not because you need them—for example, a new iPod or some books.
- What are you spending on entertainment? This includes eating out, going to movies, shows, concerts, etc.
- Add any miscellaneous expenses not covered above.
- Once you have all your expenses, compare them to your income. Are you spending more or less than you are making?
- If you are spending more than you are making, you need to cut back on wants, entertainment, and miscellaneous expenses.
- If you are spending less than you make, look at how much less you are spending. Can you cut back and save even more?
Set Financial Goals
Now that you’ve made a budget and found some money, it would help if you decided where to put that money. This means you need to make some goals.
https://www.nbcnews.com/better/business/6-smart-money-moves-make-your-30s-will-pay-down-ncna849616
Here’s the key to a good goal make it SMART.
SMART is an acronym meaning Specific, Measurable, Attainable, Realistic, and Timely.
Specify your goals
Ask yourself the following questions:
- How much will I need when I retire?
- How much will I need in an Emergency Fund?
- How much will I need in my Splurge Fund?
We will cover Emergency Funds and Retirement Funds below. A Splurge Fund is a checking account or savings account devoted to money you can use for wants and entertainment. This fund is important as cutting off these sorts of expenses ultimately can be challenging for some people. The Splurge Fund allows for the occasional purchase of a want.
Create measurable goals
A measurable goal allows you to adjust as needed to reach your goal. To check if your goal is measurable, ask yourself this question: can I create smaller goals within my larger plan?
An Example: Your Goal is to save $6,000 in your emergency fund in one year.
Your smaller goals might be to save $500 a month or $1000 every month. You can even have the halfway mark of $3,000 in six months. However you break it down, make sure to set a date to check in with your goal throughout the year.
You need an attainable goal
An attainable goal is one you can take action to reach.
Looking at the budget you made, how much extra do you have each month? Do you need to get out of debt first? Do you need to split the money among a couple of different things? Make decisions and set them in motion.
It is recommended by most financial advisors that you try to save money and pay off debt simultaneously. However, if you must choose, pay off the debt first. Then, start saving.
Make realistic goals
A goal is realistic when it is one you can reach. You do not need the goal to be so easy that you reach it immediately. On the other hand, you also do not want it to be so hard that you struggle to reach the smaller milestones.
For instance, you found an extra $400 to use when you did your budget. You think you could save $100 more by cutting expenses. However, that would mean giving up a social life and dinner out with friends.
Instead of trying to cut back more and remove things that bring you joy, focus on the $400 you do have. Use that to pay off debt and begin saving.
If you are debt-free, divide the $400 into each type of savings account that you want. For example, put $100 to the Rainy-Day Fund, $100 to Retirement, $100 to the Emergency Fund, and $100 into a Health Savings Account.

All your goals should have deadlines
Goals are no good unless they have a deadline. For instance, a Retirement Goal has a deadline of 30-40 years if you are in your 30s now. A closer deadline might be to fully fund your Emergency Fund within a year (or two, remember to be realistic).
Never Spend More Than You Earn
This one is one of those commonsense things that many people overlook. If you want to stay out of debt, do not spend more than you earn.
Spending more than you make will always lead to debt. This is why an Emergency Fund is so critical. These savings accounts allow for unexpected or surprise events that cost more than you have on hand.
Pay Off Your Debt
Another commonsense idea that needs to be said is to be debt-free, you need to pay off any debt you have. If your debt was included in your budget and you still have some leftover for saving, then make those financial goals and start saving. However, if you must pick between saving and getting out of debt, get out of debt first.
Getting out of debt first is so important because most debt has a higher interest rate than most savings accounts. Even retirement accounts can rarely make more. So, pay off that debt because the interest rate is a killer.
Save Money in an Emergency Fund
To avoid debt, make sure you have an emergency fund if costly things happen. For example, if you lose your job or go on leave for an extended time for medical reasons, you need an Emergency Fund.

An Emergency Fund should be a minimum of six months of expenses. A year’s worth of expenses is best. If you are starting your fund, shoot for six months. When you reach six months saved, then move on to saving for a year’s worth.
Save Money in a Rainy-Day Fund
A Rainy-Day Fund is for significant expenses that happen occasionally and maybe a surprise. These include needing a new car, a new computer, and other such costs. A Rainy-Day Fund is a good start if an Emergency Fund seems too big a reach. Although Rainy-Day Funds can have any amount, a couple thousand is a good starter goal.
Improve Your Credit Score
The good news is that if your budget, make financial goals, pay off all your debt, and make rent payments on time, your credit score will improve. An improved credit score will make you eligible for better rates on credit cards. These better rates make it easier to stay out of debt. Just make sure not to spend more than you can pay off each month.
Invest for Your Retirement
Investing in your retirement now will help you avoid debt later in life. Once you have paid off your debt and funded your emergency funds, put all extra money towards retirement accounts and save for medical costs later in life. If you can, you can also fund your retirement concurrently with your Rainy-Day Fund and your Emergency Fund.
https://www.businessinsider.com/personal-finance/financial-changes-now-help-me-retire-early-2021-11
Save for Medical Costs
As people get older, their medical bills go up. Keep this in mind and begin saving for medical expenses that may hit you in your last years of work or after you retire. You can use a regular savings account or go with a Health Savings Account (HSA).
Save for Big Purchases
To stay out of debt, save for any planned significant expenses. If you know you want or will soon need a new car, plan for it. If you want a house, plan for it. The more you can save towards these goals and big purchases, the less you will have to finance them. The less you finance them, the sooner you can pay off that debt.
Image Credit: Steve Stark