The Age-30 Crisis: What About My Money?
Daniel Levinson, a psychologist and one of the founders of the positive adult development field, suggests that “at about 28 the provisional character of the twenties is ending and life is becoming more serious…[during] the Age-Thirty Crisis, between age 28 and 32…it is not uncommon to tear up the life structure one put together to support the original dream of the twenties…and to create the basis for the next life structure.” In the subsequent years, as individuals enter the Establishment Phase, they begin to focus on what he describes as “major life investments” – work, family, friends, community activities, and values1.
As such, it’s easy to see why many young people start to “get serious” about their finances as they approach their 30th birthday; aside from the fact that Levinson refers to these transitions as “investments,” there are significant financial factors associated with each of those items. Let’s focus on the career aspect first. Individuals approaching their 30s can take themselves through an exercise in which they answer the following questions2:
- What is my dream job?
- What needs and values do I want to express in this job?
- What skills do I want to use?
- What job tasks do I want to perform?
- How much responsibility do I want? (senior management, good team contributor)
- What is my ideal salary?
- Where would I like to work? (downtown in a large city, rural community, in my home)
- Where can I get additional information about my career and lifestyle options?
The answers to these questions can affirm that an individual is in the right field (or suggest they may need to explore a new one!) and will help them calibrate their expectations about current and future earnings. Having this frame of reference in place is critical as one builds their vision for their future; going through an exercise like this after having worked for a few years can uncover new perspectives about the value one derives from their work. Once an individual is confident their career choice is a fit for their present and future needs, they can begin building a budget that meets their current lifestyle and formulating a savings plan that will fund their retirement.
As to family planning, anyone with a family knows that it requires different things from different people based on their circumstances, priorities, and values. One of the things that can be taken as a given, however, is that a growing family will cost more to support. As such, there is no better asset to accumulate than cash. Having cash on hand (above and beyond what is needed to meet monthly expenses) enables one to (1) be prepared to deal with unexpected expenses without tapping into savings or accruing debt and (2) to set funds aside to accomplish major goals (e.g. paying for a wedding, funding education expenses, or putting a down payment on a house). Building up cash reserves creates feelings of stability, security, and confidence, which are important ingredients in maintaining an optimistic outlook in the face of transition.
At Yeske Buie, we recommend connecting with a financial planner to act as a partner and walk through life’s journey with you no matter how old you are. We can help sort through the trade-offs associated with various choices and create policies to guide your actions such that they’re in alignment with your values and in service of your goals. Navigating the Age-Thirty Crisis (and the subsequent years and decades) does not have to be a task one takes on in solitude, and, with the right support system, can be the beginning of the pursuit of your Life Big® life.