Apr 29, 2025
As a 30-something, rebuilding your life post-divorce can feel daunting, especially if there are a couple of kids involved.
However, if you’ve moved back in with your parents and you’re starting with no debt and a steady monthly savings goal of $3,500, you’re in an incredibly strong position.
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Moving back home may feel like a step back mentally and emotionally, but financially, it’s a strategic move that could help fast-track your goals, especially if you’re ready to invest aggressively.
Here’s a breakdown of smart, efficient ways to put that $3,500 to work.
Prioritize retirement accounts
Before anything else, max out your retirement contributions. If you have access to a 401(k) through your employer, particularly one the company matches, make sure you’re contributing at least the full match amount. That’s free money you shouldn't pass up.
Beyond a 401(k), consider opening a Roth individual retirement account (IRA), income limit permitting (for the current tax year, it's $150,000-$165,000 for single and head-of-household tax filers).
As someone under 50 years old, you can contribute up to $7,000 for the year. Roth IRAs grow tax-free, and qualified withdrawals are also tax-free, making them ideal for younger investors with a long time horizon.
If your income is too high for a Roth IRA, don't worry — you can still use a "backdoor Roth" strategy.
This involves making a non-deductible contribution to a traditional IRA and converting that account to a Roth IRA. Each month, consider allocating about $1,500 to your 401(k) and $500 to a Roth IRA, until it's maxed out.
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Stay flexible with a taxable brokerage account
Once you’ve hit your limit on retirement contributions, you could open a taxable brokerage account for investing. This type of investment account is held with a brokerage firm that lets you buy stocks, mutual funds, bonds, exchange-traded funds (ETFs) and other products.
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The firm completes investment transactions as you request. Taxable brokerage accounts are flexible, as funds can be used before retirement without penalty (though you’ll owe taxes on gains).
Consider setting up automatic monthly investments to stay disciplined and benefit from dollar-cost averaging, a strategy that lowers volatility impact by regularly spreading out your purchases over time, so you're theoretically not buying shares at a continuously high price point.
Invest in your kids’ futures
If your children are young and you want to help with their education, you could keep things simple with one or two ETFs that go to your kids on their 18th birthdays. But there are a couple of savvier investments that might help you (and by association, them) earn even more.
For example, a 529 college savings plan is a powerful tool. Contributions grow tax-free, and withdrawals for qualified education expenses are tax-free as well. Some states even offer tax deductions or credits for contributions.
Not sure if college is in the cards? Open a custodial brokerage account (Uniform Gifts to Minors Act/Uniform Transfers to Minors Act) instead.
These accounts don’t offer the same tax perks as a 529, as only a portion of earnings is tax-exempt (currently up to $1,350). However, they’re more flexible and can be used for any purpose once your kids become adults.
While individual priorities and circumstances vary and there's no concrete, standard figure, advisors recommend contributing about $150–$350 per month per child to build a substantial education fund over time.
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With a writing and editing career spanning over 15 years, Emma creates and refines content across a broad spectrum of industries, including personal finance, lifestyle, travel, health & wellness, real estate, beauty & fitness and B2B/SaaS/tech.
