Here are a few simple financial habits that you need to establish in your 30s to manage your finances and secure your future.
Your 30s are the age when your finances start to take priority over other stuff. And, it becomes more and more important to lay out a blueprint for your finances. Ideally, you should have started planning your finances in your twenties. But hey, you were probably too busy having the time of your life. Anyway, don’t worry, it isn’t too late to get your finances in order.
Here are a few simple financial habits that you need to establish in your 30s to manage your finances and secure your future:
Didn’t see that coming, did you? Well, you heard it right! Stop depending on your parents and siblings for money! You’re in your 30s for crying out loud! The only person who should be paying for you, is you. Unless of course, you’re in an emergency situation. Becoming financially independent is important in the long run because you may not always be able to get help from your family or friends.
So, how do you grow up financially? You can start by keeping a check on your spending and clearing your debts. That’s rule number one. The next thing you need to do is set your financial goals. You then start saving or investing so you can achieve these goals. We’ll be discussing this in detail below.
Another important step towards growing up financially is getting Health Insurance. In your 30s, Health Insurance is comparatively cheaper and could be of real help in a medical emergency. Don’t stop at just protecting yourself, pay a little extra and extend the protection to your family too.
Set your goals
Unless you set short-term and long-term goals for your future, it will be difficult for you save enough money to achieve them. These goals could be anything from a vacation to buying your first car. Chart out your financial goals and start investing your money in the right instruments. There are a lot of investment instruments to choose from – Mutual Funds, Fixed Deposits, Insurance, Bonds and more. Additionally, you should also set up an emergency fund which can tide you over for at least 3-6 months. This way you’re prepared in case of any unforeseen event like losing your job, a car repair or a medical emergency.
Track your expenditure
Saving money becomes your top priority when you’re in your thirties. In order to save enough to meet your financial goals, you need to keep track of your spending. Creating a budget is the solution to cutting down unnecessary spending. Once you’ve created a budget, ensure that you stick to it. We know, easier said than done but you’ve got to try.
Pay off your debts
If you want to have a financially sound future, then you must completely pay off all your debts. Becoming debt-free not only gives you mental relief, it also helps you save more money for your future needs. If you’re a Credit Card user and you’ve been maxing it out, then it is time to stop this habit. Not only does this put pressure on your financial health, it also affects your Credit Score.
Start saving for retirement
Haven’t started saving for retirement? It’s time you did. Though saving for your retirement does not seem important now, it is better to start sooner if you want to build enough savings. If you’ve already been saving money for your retirement, then you can start saving a little more than before. For example, if you save Rs.10,000 per month for the next 30 years, you will have Rs.2.28 crore when you retire assuming the interest rate was 10%. (Remember to keep inflation and taxes in mind.) Sounds complicated? Here’s a retirement calculator to help you figure things out.
Involve your family
If you’re married, then it is wise to involve your better half in the money decisions. Prepare monthly budgets together. Plan financial goals together and even discuss the big purchases such as buying a house or a car. This will ensure that both of you are on the same page financially. If you have kids, then you must teach them to be financially responsible.
We hope these habits help you become better at managing your finances. In the meantime, if you have any other ideas on managing money, don’t be shy, leave us a comment.