6 Financial Planning Tips To Follow At The Age Of 30
As you enter your thirties, you start realising the importance of financial discipline. This is the perfect time to educate yourself about personal financial planning and ways to secure your future.
Here are 6 financial tips that will definitely guide you on how to manage money and put you on the right track.
Assess Your Budget And Stick To It
You must be aware about the importance of budgeting. It helps to track your expenses so that you can make sound financial decisions. Once you turn 30, your desires and needs change gradually. Therefore, it is important to create a monthly budget according to your average monthly expenditures and try to stick to it. For this you have to track your your expenses so that you can identify your spending habits and assess where you can reduce your expenses and save more.
Track Your Expenses
It makes no sense in spending your entire pay check for pricey lifestyles. For example, if you visit a mall to buy a shirt and you end up splurging on gadgets, cosmetics and other stuff. Beware of impulsive buying and stick to your needs. Ideally, you should live off to 60% to 70% of your income and save or invest the rest for your future. In addition, limit the use of credit cards as they give more purchasing power.
Create An Emergency Fund
Life is totally uncertain and you have to be prepared for unplanned and sudden emergencies. Having an emergency fund saves you from digging your money from your savings or relying on credit cards. As your earnings and expenses increase, so should your emergency fund. Start by putting the minimum amount in your emergency fund and gradually increase the amount from your each paycheck. Various top investment advisors in india suggest having three to six months expenses in emergency fund.
Plan For Your Retirement
Many people do not think about their retirement and make minimal contribution towards it. As you enter into your 30s, this is the best time to start saving for your retirement. Financial advisors recommend saving approximately 15% of your income for retirement. As you get a raise in your income or a bonus, save it for your secure future. You may consult Best Financial advisors and educate yourself about different long-term saving modes.
Pay Off Your Debts
Several people take loans such as student loans, auto loans, or mortgages early in their life. Thirties is the perfect time to repay your loans and start saving for your future. Assess the amount of debt you need to pay and create a budget. This will help you to cut your expenses and prevent from gaining more debts.
Paying off your debts will have a huge positive impact on your finances. You can save more money for your future and invest in financial goals. However, after clearing your all debts, try to stick to your budget and do not get tempted to spend again. Thus, controlling your expenses and minimum use of credit cards is the key to your financial planning.
Get Adequately Insured
If you are single without any dependent, you may not consider having life insurance. However, if you have dependents then thirties is the perfect time to secure yourself and your family by taking health and life insurance coverage. The life insurance premiums are quite affordable for people in thirties.
Also, as your assets grow, you need more insurance coverages such as home or auto insurance. These situations demand for additional security. Therefore, insurance is an important way of bridging the financial gaps and lead a stress-free life.
As you grow and your financial condition evolves, it is important to make a financial plan that will help you to secure your future. Start early, be consistent in your investments and save more are the essential elements for financial freedom.