Just because you hit your 30s doesn’t mean you’ll be financially stable — in fact, many people I know in their 30s and 40s still struggle with it.
That’s because financial literacy is not age-dependent. It is entirely rooted in your habits, your willingness to learn, and your desire to achieve a level of financial freedom that gives you the security to live life on your own terms.
So, what are the seven habits of people who are financially stable in their 30s and 40s?
Let’s get started right away.
1) Track your spending
Sounds pretty obvious, right?
However, most people don’t really make the effort to track their spending in a sustainable and consistent way.
Many people keep records but don’t use that knowledge to guide their future spending, making the act of knowing where they are in their finances a waste of time. There’s no point knowing you’re over budget unless you actually stop spending and stay home.
The problem is, tracking your spending can get, well, tedious. Not everyone wants to enter every single coffee into an Excel sheet.
Additionally, some people may find obsessive tracking of where every penny is being spent to be triggering due to past financial insecurity (and I say this from personal experience).
Luckily, there are plenty of ways to track your spending, and some of them are a lot more relaxed than others.
Here’s a simple calculation I often use:
- My income – necessary expenses including savings and regular direct debit payments = available spending for the month
Once you have a specific amount, transfer it to the bank account you use for your daily expenses, then check back from time to time to make sure you’re on track and within budget.
2) They doubt their shopping urges
“The excitement we feel when spending money is temporary. Being more mindful about what we buy can reduce stress and increase happiness.” To tell Dr. Marty Nemko is a life coach with a degree in educational psychology.
“We all enjoy the excitement of choosing, buying and enjoying what we have bought, and often it’s worth the money. Sadly, sometimes we get into the habit of buying to get that excitement, but like a line of cocaine, the excitement is short-lived but the debt is long-lasting.”
This is a very important thing to keep in mind: Are you shopping because you’re sad, lonely, or in need of a distraction, or are you shopping because you genuinely believe this purchase will make your life better?
For example, buying a new hair mask when the old one wears out is an expense I can justify to myself: it leaves my hair silky, soft, and shinier, making me feel more confident and better every day.
But if you’re not 100% sure and you’re buying a dress that you might only wear once or twice…
That’s another story.
So, when I want to buy something, I like to use a simple strategy: take 24 hours to think it over.
If the next day I’m still deciding to buy it and I can find a logical reason for how it will improve my life, then I will buy it.
3) They have modest lifestyle demands.
According to expertsYes, money makes us happy, but only up to a point.
Once we reach a high level of comfort, it’s no longer money itself that increases our satisfaction, but our social status relative to those around us.
This is why many people don’t get richer even when their income increases: when they have more money, their spending skyrockets.
Now that they can finally afford it, they start shopping at better quality supermarkets, buying new cars, going on more holidays, wearing more jewellery and taking up more expensive hobbies.
Don’t get me wrong, just because I’m finally able to enjoy life doesn’t mean I shouldn’t enjoy it. I’m happy I can go bouldering or swimming whenever I want, I can afford a gym membership, and I can travel the world.
But you have to keep your feet firmly on the ground.
In the book The Billionaire Next Door The implication is that people who appear to live very simple and ordinary lives are often the real millionaires because they live within their means and save large amounts each year.
If lifestyle demands continue to grow in line with income, can we expect to see any real change in financial security?
that’s right.
4) Invest in assets, not liabilities
If there’s one thing I learned from reading famous books, Rich Dad Poor DadThat means that people who become financially secure over time invest in assets rather than liabilities.
What does that mean?
Assets increase in value over time, while liabilities decrease in value.
In today’s world, a home is an asset (if you can afford the upkeep or rent it out), and so are well-chosen stocks and shares.
A car is a liability: the longer you use it, the less valuable it becomes.
Unfortunately, most people don’t think that way.
They decided to take out a car loan instead of taking public transportation for a while.
Instead of going to the supermarket and cooking something healthy for themselves, they spend money on expensive takeaway that is gone in 30 minutes.
Instead of taking a 15-minute walk as a warm-up, they drive to the gym.
If you want to become financially free as quickly as possible, think long term. Instead of spending money on short term pleasures or trying to keep up with others, invest in things that will improve your life in the long term.
Which brings me to my next point…
5) Invest in the long-term nourishment of your soul.
A good investment is not necessarily financial or material. Stocks, paintings and real estate are not the only good investments.
As we said above, a good investment is one that grows in value over time. What could be more valuable than skills, knowledge, and emotional well-being?
These are just a few examples of investments that can contribute to your overall well-being or improve your skill set, thereby increasing your chances of achieving financial stability.
- Formal Education
- Online Courses
- Treatment
- Joining a hobby group
- Books
- The expenses that come with spending quality time with great friends
- Educational excursions and trips
- Gym membership
- Practicing self-care
The happier, more educated, and more emotionally intelligent you are, the more likely you are to stay financially responsible and pursue your goals and keep your happiness levels high.
6) Set firm financial limits
Although it’s probably the hardest habit on the list, setting boundaries is a crucial part of financial security.
why?
Boundaries not only set limits for your relationships with others, they also help you build a healthy and sustainable relationship with yourself.
In her book Set Boundaries and Find PeaceTherapist Nedra Grover Tawab writes, “The ability to say no to yourself is a gift. When you can resist urges, change habits, and say yes only to things that you feel are truly meaningful, you are practicing healthy self-boundaries.”
Some of the financial constraints we can consider, she says, are:
- “I wouldn’t lend money to anyone if I couldn’t afford to give it as a gift.”
- “I will cosign someone’s loan only under the following conditions: ___”
- “I will not cosign for anyone.”
- “I’ll save for emergencies.”
Remember: boundaries aren’t meant to limit you. Boundaries are meant to guide you in reaching your long-term happiness.
7) Keep learning about finance
Very few of us received quality education on personal finance while growing up.
Few teachers talked to us about the importance of investing, not only because it wasn’t mandatory, but also because the teachers themselves were likely not invested.
No one taught us how to track our spending, how to switch to a mindset of abundance instead of scarcity, how to find savings accounts with the best interest rates, etc., especially when our own parents didn’t have that knowledge.
That’s why the best way to become financially stable at any point in your life is to educate yourself — and keep doing it.
Read books on personal finance. Watch YouTube videos on investment portfolios. Read about the importance of credit scores.
Even if your parents or teachers can’t show you how, the internet can.
Now is the time to carve your own path in this world.
