I recently turned thirty years old, which is a scary time financially. You are old enough to feel like you should have made more progress financially, but young enough that realistically you are still battling the challenges of a modern young adult, like paying back student loans and an increasing cost of living.

Looking at a retirement calculator is scary enough without knowing when you’ll be able to start saving aggressively.

According to the 2014 Census figures published in August of 2018, the median net worth of single-person households under the age of thirty-five is $4,166. If you exclude equity from a primary home and the related mortgage, the figure drops to $3,310.

They say that thirty is the new twenty, and from a financial standpoint it certainly looks that way.

As recently as thirty years ago it was common to work your way through college. You’d graduate at twenty-two having worked nights and weekends, but you’d be debt free. It’s virtually impossible to do that now since the cost of tuition has increased nearly 8x faster than wages have over the past thirty years.

Back then, you’d start fresh in the professional world and you would immediately start saving for a down payment for your home. Not having staggering amounts of student loans and other financial obligations was taken for granted.

Today’s new graduates are saddled with tens of thousands of student loans. The cost of a college education soaring to record highs while wages have barely grown. Upon graduation, you’re not even thinking about saving for a down payment on a home because for the next few years you’re working to repay the student loan companies.

It can be scary to turn thirty and feel like you face an uphill battle from the very beginning, but there’s a few lessons that you must know if you are determined to build a solid financial foundation for your future.

1. Harness The Power Of Retirement Accounts

Looking at the most recent census data, the median value of retirement accounts was $10,000.

That figure is powerful because it’s 140% or 2.4x larger than the overall median net worth for single-person households under the age of thirty-five. Only home equity represents a larger share of wealth for this group.

This means that retirement accounts are one of the most reliable ways for young people to build wealth. Interestingly, the share of net worth is split roughly equally between 401(k) and IRA accounts.

Unfortunately, the data shows that many young people are not contributing to a 401(k) or IRA account since the median net worth is so much lower than the median value of those types of accounts.

Both types of accounts use tax-savings to incentivize people to save for retirement, but the 401(k) has the added benefit that employers can make matching contributions into those accounts.

To learn more about 401(k)s or IRAs, you can click those links to see my overviews of both programs.

2. Leverage The Stock Market and Learn How To Invest

If they are able to save money, many people keep their money in a high interest savings account because they are intimidated by the stock market or are afraid of losing money.

Contrary to those fears, the second largest contributor to net worth for young people aside from their home is stocks and mutual fund shares.

If you are not investing because you don’t know how to do so, you are likely not familiar with low-cost index funds. These investments are simple, highly effective and extremely affordable. This is also the way I was taught to invest my money by my finance professors at both Harvard Business School and the Wharton School of Business. As one professor would say, “picking individual stocks is for dummies.”

By investing in index funds like Fidelity’s FZROX or Vanguard’s VTSAX, you are essentially investing in the entire stock market, giving you broad exposure to many different companies while lowering the chance of picking the wrong company or sector to invest in. They also charge virtually no fees which means that more of your money is staying in your account. No investment is guaranteed, but this is the way the world’s top money managers recommend individual investors to invest their money.

3. Realize That You Can’t Buy Happiness Sooner Rather Than Later

Evolutionarily, we are all coded to want more than we already have. It’s what has allowed humankind to advance to heights that would have barely been imaginable even as recently as a few hundred years ago.

One negative side-effect of this drive is that it’s easy to want to keep up with the proverbial ‘Joneses’. To try to look rich or wealthy. Learning that money can’t buy happiness is a lesson that everyone will eventually learn. Books like Tuesday’s With Morrie or Randy Pausch’s famous Last Lecture highlight the fact that at life’s end, the most important things are hardly related to a desire for more physical objects or purchases.

Learning this lesson will allow you to avoid making costly mistakes like not saving for retirement in lieu of making costly decisions like spending hundreds of dollars on fitness classes. There’s a balance to everything.

4. Living Within Your Means Is A Strength, Not A Weakness

When I lived in New York City after college, I began to notice an interesting phenomenon. Growing up in poverty, I was used to not being able to participate in every social event in high school and college because I simply wasn’t able to afford it. With peers in the same shoes, that was an acceptable reason.

However, as soon as I started working, the pressure to go out and spend money socially changed entirely. All of a sudden not having enough money to go out was met with opposition. But the fact is that just because you are earning money, it doesn’t mean you can afford to spend all of it.

You need to pay yourself first. As soon as your paycheck hits your bank account you need to prioritize your living expenses and saving for retirement before you even start to think about heading to the bars or restaurants. Whether you learn how to budget in order spend less than you earn or utilize another method, few things will affect your financial well-being more than this.

Learning how to save money is an important part of becoming an adult, yet few people teach it to their kids. This means you have to put in the work to learn it on your own.

If you find yourself over-spending, focus on saving on large recurring expenses first, like your rent and other overhead expenses. This will make a much larger impact than cutting out that cup of coffee in the morning. A better example of a more meaningful place to save money is on recurring big ticket purchases like contact lenses, which often cost hundreds of dollars. Use sites like Contacts Compare to find the cheapest place to buy your contacts online.

5. Learn What Affects Your Credit Report And Become A Credit All-Star

Few things will cripple your finances faster than running up a credit card balance and paying interest on that balance. This is because credit cards have extremely high interest rates. Yes, even the new flashy Apple credit card has interest rates much higher than you’ll be able to earn by investing your money.

The reason you will want solid credit is because it will save you money when you make the most important purchase of your life: your first home. Having an excellent credit score will give you access to the lowest mortgage interest rates available. Even if your credit allows you to lower your mortgage interest rate by only 0.25 percentage points, that is a meaningful amount of interest saved when you consider the fact that the average mortgage is over $300,000 according to the Federal Housing Finance Agency.

The two most important things that affect your credit score are your ability to make on-time payments and keeping your credit utilization low.

Focus on always making AT LEAST the minimum payment on time. Ideally, you’ll always want to pay the total amount due in order to avoid interest fees. This means you’ll want to utilize your credit card like a debit card and never spending more than you can afford to pay off. This will also keep your utilization low, boosting your credit score to new heights.

6. Increase Your Income To Reach Your Financial Goals

In order to reach your financial goals, you need to establish goals in the first place. Set time aside to think about where you want to be six months, one year and five years from now from a financial standpoint. From there, you can focus on the level of income and expenses you need to reach your monthly and annual savings and investment goals.

There are countless financial distractions which you will face on a daily basis. From purchases you don’t actually need to administrative things like updating your W4. These distractions will keep you from focusing on your most important financial goals.

You’ll notice that the first five lessons all focused on how to best utilize the money that has already come in the door. But what about actually earning that money? And earning more of it.

While last, this might be the most important lesson of all, because you can’t save your way to financial freedom if you aren’t earning enough money.

As you get older you’ll realize that playing an active role in managing your career will make a larger impact to your financial stability than you realized. Working hard and reliably are incredibly powerful traits, but you also need to focus on maximizing your earning potential. It’s not always those who work hardest who earn the most.

It may mean you need to learn how to ask for a raise or seek a higher paying job. If you think you need to switch jobs, read my guide on how to make a resume that will get you noticed. Picking up a side hustle to accelerate your financial goals can also fundamentally change your financial outlook.

For the 50% of you that are women, this is more important than ever. The data shows that on average you earn only 78% as much as your male colleagues for the same work. You may not think this is the case for you, but it likely is. Make sure you are being compensated fairly for the work that you do.

7. Don’t Overlook Life And Disability Insurance

It’s no secret that young people don’t know much about life insurance. Most don’t even know the difference between term life vs whole life insurance. But that’s okay because it’s pretty straight forward.

It’s also important to realize that not everyone needs life insurance. However, if anyone relies on your income then you’d be foolish not to have some coverage. Disability insurance is also critical. You need to be able to withstand not getting a paycheck for many months in order to think not having disability insurance is a good idea.

Turning thirty may seem daunting because you have left the building stages of your twenties. But just remember that thirty may very well be the new twenty. This doesn’t mean that you shouldn’t try to get a head start in your twenties, but if you are just now starting to focus on your financial goals, these few lessons will give you a running start.