The 8 Smartest Things To Do With Your Money in Your 30s

After a decade of experimenting, failing, learning from those failures, and “figuring things out,” you might find yourself in a more secure financial position once you hit your 30s.

What do you do with excess money when you’re no longer living paycheck to paycheck? And how do you prepare for big expenses you’re bound to face in your 30s?

We spoke to Michael Solari, a certified financial planner at Solari Financial Planning, about the smartest things 30-somethings can do with their money to set themselves up for a prosperous future.

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Here are eight smart places to start:

1. Increase your 401(k) contributions

“In your 30s, the most important thing that you have is time, and the more money you can save now is going to pay huge dividends down the road,” says Solari.

You should already be contributing towards your employer’s 401(k) retirement account, but if you get a pay raise, increase that contribution, Solari says.

Also, get in the habit of upping your contribution at the end of each year, even if it’s just 0.5%, he advises. Check online to see if you can set up “auto-increase,” which will automatically increase your contributions every year.

2. Make a contribution to a Roth IRA

If you’re maxing out your 401(k) plan, the next step is to put money towards a Roth IRA, a retirement savings vehicle that offers tax benefits and is particularly well-suited to younger people who earn less than the income cap ($116,000 a year or less for individuals; $183,000 or less for married couples filing jointly).

Contributions to this type of fund are taxed when they’re made, so you can withdraw the contributions and earnings tax-free once you reach age 59 1/2.

Solari recommends directing your tax refund, bonuses, or any other extra money to a Roth IRA.

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3. Contribute to a dependent care flexible spending account

This applies to those with younger children looking to save on child care. Typically, larger companies will offer a slew of benefits, one of them being dependent care flexible spending accounts (also known as FSAs) into which you can put pre-tax money. In some cases, you’ll receive a debit card from the company to use towards services such as daycare and summer camp. If you’re paying a nanny or babysitter, you can pay them with cash and then apply for reimbursement from the FSA.

“If you have children in daycare and your company offers a flexible spending account, contribute to it,” Solari says. “The tax deduction will give you a 15 to 30% discount on your daycare. It’s a great way to save money.”

Check with your human resources department to see if you’re offered this benefit.

4. Create a health savings account if you have a high-deductible health care plan

Another employee benefit to tap into is the health savings account (HSA) into which you can put pre-tax money and use towards medical costs whenever you want. You can also grow that money in an investment brokerage account, Solari explains.

To qualify for a HSA, the IRS requires you to be on a high-deductible health care plan (HDHP) — a plan that offers a lower health insurance premium and a high deductible. “They are encouraging people who have high deductibles to save money into these accounts,” explains Solari.

“I usually recommend my clients to have their total out-of-pocket expense saved in a savings account portion, and then the remaining in a mutual fund,” he tells us. “The savings can be withdrawn for immediate health care, and the mutual funds can be left alone and invested for a long time. ”

This option is particularly advantageous for those who are generally healthy and don’t have to go to the doctor’s office or hospital that often, such as 30-somes without children who are looking to save for future health care expenses.

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5. Buy the insurance you need

Insurance in general — health, life, home, and disability — often gets put on the back burner, but it’s important to put in time to research insurance plans, or talk to a trusted adviser, and purchase the right insurance for you.

One type of insurance that gets neglected more so than others is long-term disability insurance, but not having it can be extremely risky. Disability insurance is meant to provide income should you be disabled and unable to work, which is more likely to happen that many of us may think. It’s estimated by the Social Security Administration that over 25% of today’s 20-year-olds will be disabled before retirement.

Take a look at the types of insurance you should buy at every age.

6. Set savings goals

You can’t just go through the motions. “If there are no savings goals, then there won’t be any progress,” says Solari, and your 30s are bound to be filled with bigger expenses — such as a home, car, and children — that require diligent saving.

Mint and You Need A Budget are online tools that allow you to create savings goals and see your progress.

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7. Save for a home

If you plan to buy a home, it should be one of your savings goals. Ideally, you’ll want to have saved enough to make a 20% down payment — anything lower and you will have to pay for private mortgage insurance (PMI), which is a safety net for the bank in case you fail to make your payments.

If you’re thinking about purchasing a home in a major metro area, take a look at how much you need to save per day to put 20% down on a house in major US cities, and see how to make sure you’re buying a home you can afford.

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8. Save for children

Kids are pricey. The average cost to raise a child is about $245,000, and that doesn’t include college expenses. If you plan to have children, it’s time to start saving. To get an idea of what you might need to cover, read about the costs new parents didn’t see coming.

The best way to prepare for these expenses is to start setting aside money as early as possible. The dependent care flexible savings account could help with daycare; as for the additional costs of college, start by looking into a 529 savings plan.

This article originally appeared on Business Insider