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31 July 2020 | 7 min read

Turning 30? Here Are 10 Financial Checks That You Must Keep In Mind

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Are you approaching the intimidating age that tends to change lives – 30? If yes, it’s not only important to plan a gigantic birthday party and ignore the first grey hair you found on your scalp that freaked you out, but you should also start focusing on specific financial goals to reach before turning 30. For many people, this is a wake-up call. It’s that time when you typically enter a new phase of life – either you get married, plan to have kids, or choose to be self-sufficient by setting bigger financial goals.

It can be pretty unusual to finally acknowledge the fact that you’re getting older and more responsible, which is why you need more substantial financial outcomes. But turning 30 doesn’t have to be so daunting or challenging. It can be a great time to do a SWAT analysis of your economic conditions and shuffle proprieties accordingly. Your income might be growing considering you’re climbing up the career ladder. Still, the best way to escalate your monetary income is to create strategic goals that will help you realise both your personal and professional ambitions.

You still have lots of time to get your finances in order and make sure your money is working for you, especially when you want to sit back and relax. Yes, investments do that! Before you decide to get anxious or nervous, remember – The perfect time to start managing your money was ‘yesterday’. The second ideal time is ‘today’. So even if you are past a particular age, you’re doing far better than those are still ignoring this fact. Here’s revealing the top 10 financial to-do’s on your checklist before you hit the 30 age mark.

Change Your Mindset

Some people end up spending their entire lives on trying to get a grip on their finances, and this is mainly because of how they think of themselves. We’re exposed to letting our assets decide our self-worth {like cars, bags, size of our home, holiday destinations}.
Sometimes we even compare ourselves with others to dive deeper into self-doubt. But this will only make us less confident and more debt-full. Instead, make your money work for you and spend lesser than you earn. These principles will help you pave your way for a happier life. If you manage to keep your worries aside and follow the next steps, the money will find its way to you instead of the other way around.

Revise Your Budget

The financial plan you made in your early twenties might have saved you some money, but it probably doesn’t resonate with the goals in your thirties, and this is why you need to revise your budget from time to time. As you grow old, your needs, wants, dreams, and goals mature too. Adjust your budget to life changes such as starting your own business, investing in insurance, and saving up for marriage. Once you get the drill of adapting with time, your balancing act will treat you right.

Make Money Even When You Are Not Doing Anything

The most important and winning word in finance is called ‘Compounding’. Consider the investment behaviour of two friends, where one starts saving at the age of 18 for ten years while the other starts saving money at the age of 28 for 30 years. Who according to you will have more money when they are both 65? As crazy as it may sound, the friend who started saving money at the age of 18 will have 2.5 times the amount than the one who saved the same amount of money for 30 years. Yes, it’s unbelievable but true.

The game of compounding is about ‘when’ you start saving and not ‘how much’ money you save. You might have a lot of expenses hounding you at the beginning of your career, but saving now can make a stark difference in your finances and give you the happiness of retiring stress-free. Also, if you are saving for your child’s future, start compounding as early as possible {preferably when you begin planning for them} and not when they step into college. Compound interest favours those that start soon, but It’s never too late to start now.

Insure Yourself

As you grow, so do your responsibilities and assets. Whether It is moving into a space of your own or owning your very first vehicle, both make you financially independent and calls for immediate financial security. We have all fallen prey to insurance advertisements at regular intervals of time that have a similar message about life throwing unexpected circumstances at you and how you need to shield yourself with security.

Since life is highly unpredictable, insurance covers like home insurance, car insurance, life insurance as well as medical insurance need to be bought on priority. Besides, you will end up paying a lesser premium amount if you protect yourself with Life and Medical insurance covers in your early days. Try not to depend on the medical insurance your company provides you with and get an additional one to safeguard your family too. The cherry on the cake? The tax benefits they come with are always helpful, so get covered now!

Upgrade Your Career

Your twenties were spent in developing skills. It’s now time to implement them and enjoy the benefits in terms of monetary rewards. In case you haven’t yet settled for a specific career path, it’s time for some soul searching alongside legitimate research. Take some time out to identify your professional gains and needs as well as the industry’s pros and cons. Draw a path that resonates with all your ambitions and decide which one fits you well.

There’s nothing more empowering than making your path or choosing a specific direction. Once you’ve made up your mind, work toward ut, and take calculated risks. Remember, passion doesn’t always help you pay bills but analysing and re-directing your career path from time to time will help. This will allow you to have greater control over your investment plan, saving plan, and retirement plan all at the same time.

Build A Rainy-Day Fund

We all know that emergencies do not come with warnings. They are quite the opposite, which is why it’s always better to be prepared. A wise step would involve you keeping about 6-8 months of your monthly expenses in a separate and unreachable bank account that cannot be accessed by your card. Try to forget about these funds and not withdraw it unless it’s for a real emergency.

And no, upgrading your economy seat to business class because of a good deal on flights online doesn’t count as an emergency! Start a rainy day fund here.

Escape The Debt-Trap

Your intention is everything when it comes to being debt-free, and the earlier you start working towards it, the faster you will reach your goal. Your journey can begin with a debt-repayment plan in your twenties, then sticking through it in your thirties and finally spending your forties building your investments so that you can grow your money, instead of paying dues from the past.

Many people tend to get tempted through EMI schemes and loans due to their luring availabilities. But this can be minimised as fast as the pace YOU give it. For example: Use your next bonus to pre-pay a loan instead of splurging on a new device and increasing your liabilities. In retrospect, while becoming debt-free is good, not all debt is bad debt or guilt-friendly. Loans taken for start-ups or building homes are winning ones. So cut yourself some slack while you’re at it!

Save More

You can choose to adopt several methods of earning money, but your mindset has to be anchored on one. You could either be close-fisted by saving money as much as possible or increase your income by using more than one stream to help you. Our adult lives are struck with high-shooting bills and unlimited purchases due to which controlling expenses as well as making money becomes difficult.

Choosing more streams of income would be a more natural choice since living in limits is something nobody enjoys. Here’s a tip: Pick up a new skill or hobby that will help you earn extra money. If you’re happy with your job, these extra bucks could allow you to enjoy a well-deserved vacation. Either way, savings is never a bad idea.

Make Your Will

Life is very unpredictable and can change in an instant. That is why it is essential to be prepared for all scenarios, especially those which involve death. Everyone wants to ensure that their loved ones are well provided for even in their absence. That is why it is crucial to make a will so that you can ensure that your assets are handed over to your family according to your wishes.

Retire With A Plan

Contrary to popular belief, retirement needs to be planned when you start your career. You read that, right! Most people either miscalculate their retirement money or start saving a little too late in life. Relying on your family is not the best plan since life is uncertain, and personal security is everything. Ideally, before you turn 30, your retirement pie chart should be drawn in the books and if that sounds bizarre now, imagine how it will look when you’re 40 and have way too many responsibilities. ‘Now’ is the answer to all your financial problems.

by Megha Panjabi
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