Money in your 30s

I went through old documents in my Google Drive account today and came across notes I made about Harold Pollack’s personal finance index card. Pollack read lots of books on managing your money and concluded that everything you needed to know could be written on a single small card. 

The best personal finance advice can fit on a 3-by-5 index card, and is available for free in the library

Harold Pollack

Harold Pollack, a University of Chicago Social Scientist, wrote ten rules on the back of an index card and posted a photo of it, which went viral. He later wrote a book that detailed how to approach each step.

The index card is deliberately generic and covers the basics from a North American perspective. The UK is different to the US in many ways, so as I revisited the ten rules, I had to convert a few of them to make sense in the British financial system. I then started to think about the advice that I would have given myself at the start of my thirties, once I was married and earning a bit more cash. After work, I drove my wife to pick up her car from the garage, and we had a chat about her rules – I borrowed a couple of ideas from her, including number ten. 

My financial advice for someone living in England in their 30s:

  1. First of all, spend less than you earn.
  2. Buy fewer things but of higher quality and look after them – You can’t afford to buy cheap. Have a nice home-working set up, a nice pair of noise-cancelling headphones (B&W PX7s), and a Kindle; you are going to spend a lot of time working, so enjoy it.
  3. Invest in experiences and other things that increase your vitality – travel, adventure, health, fitness. Build a home gym, even if is it just a single 24kg kettlebell, so that you can exercise most days. Take lots of long weekend travel breaks.
  4. Use your employer pension scheme as your employer matches your payments; it is the closest thing to free money you will find.
  5. Max out your tax-free ISA allowance before any other investments, but use a service like Hardgreaves Lansdown to find one that pays a reasonable estimated rate of return; my bank’s ISA gave me 0.5% interest before I moved it. Your tax-free allowance is £20,000 per year or £1,667 per month at the time of posting.
  6. Buy a house once you can afford to get a reasonable interest rate on a mortgage. I was not too fond of rental inspections, and an Englishman’s home is his castle.
  7. Use your credit card for all purchases to have them insured but pay off your credit card each month before the statement date to avoid charges. Use occasional credit such as loans or financing and never miss a payment to build a strong credit score.
  8. Avoid your current account overdraft fee and other forms of expensive debt.
  9. Make a small number of long-term investments in companies you believe in to become an owner and change your mentality about money and work. Invest in the company you work for if it’s publicly traded.
  10. Talk about money and investments with your partner and friends. Learn what they do with savings, investments, and dept. Learn about other people’s relationship with money.

Let me know on Twitter what your rules would be, or message me if you have any questions.