Top Financial moves to make before hitting 30!
Your 30’s marks the transition into an age where you also need to shoulder greater responsibilities. This period also heralds the perfect time where you need to seriously start taking a long hard look at the prospect of upcoming responsibilities and get your finances in order.
The reality is that by setting yourself up now, you will be able to reap benefits in the future. As you take over the financial reins, now’s the ideal time to create a solid plan and make some sensible decisions that will impact your long-term economic well-being. Here are some top financial moves that’ll help make your transition in your 30s a little more rewarding.
1. Becoming Financially Independent of Your Parent’s Earnings
If you’re looking to take control of your future and establish your own life, it’s paramount that you disengage from your parents financially. Start assuming full responsibility for your financial decisions and start being accountable for your expenses. The road to becoming a financially responsible adult is a long one and breaking free from your parents is the first step towards charting your financial journey.
2. Being Frugal in Your Spending
Once you start earning a regular stream of income, the first thing you need to do is establish a plan for managing your finances. By putting together a budget, you will be in a better position to understand where your money is going and where you can afford to make cuts.
People often make the mistake of treating savings as what’s left over after taking care of their expenses. However, this couldn’t be further away from the truth – set aside a certain sum for savings from your income at the start of month itself. The biggest takeaway here is that by practising frugality with things that are of less importance will, in turn, help free up money for more important goals.
3. Creating an Extra Income
You need to figure out a way to start making more money or alternatively, devise a plan to cut down on your current costs instead of spending all of it. The extra income you generate can be used to pay off any debts you might have piled up, save a little more towards your retirement or simply, give a much-needed boost to your monthly finances.
4. Control Your Debts
Always stay sharp and be aware of your debt situation as carrying debts affects your ability to save and meet other needs. Its imperative that you learn how to deal with your debts – what you need to remember is that no matter how small your debts are; you’re merely paying additional interest on them. The key is to make a list of all your debts, increase your EMIs so that you can clear off your debts earlier and make timely payments to ensure that your debts don’t get out of hand.
When it comes to financial planning, it’s never too early to start investing. If you begin by investing early in your working life, you will be able to have the necessary funds to achieve financial independence when you no longer enjoy the benefits of a salary. Moreover, by making sound investments and making use of your money smartly, you can become even wealthier by letting your money do the work for you. By prioritising wealth management and by creating a diverse investment portfolio, you will have put in the foundations that you need to meet your crucial financial goals.
6. Keep Aside an Emergency Fund
If you don’t have an emergency fund yet, then it’s highly recommended that you make building an emergency fund. Putting aside money for a rainy day is crucial so that you're always prepared to deal with what life throws in your direction.
Having an insurance plan in place can provide much needed financial security during times of uncertainty. Regardless of what you might think of Insurance, the fact of the matter is that that you require adequate insurance in all walks of life. Moreover, if a tragedy were to hit, it could financially cripple you if you find yourself uninsured. Be it auto insurance or life insurance, getting yourself or your assets insured will safeguard you against the various risks life throws in your direction. Additionally, certain forms of insurance also double up as useful tax planning tool as well.*
8. Create a Retirement Plan
Through diligent planning and making the best use of your resources, you will be better equipped with the necessary tools to navigate your retirement years smoothly. Retirement planning is all about getting off to a good start so start investing today rather than putting it off for the next month. Moreover, you will also get the power of compounding when you invest early – It helps you grow your investments exponentially by earning interest on interest. Hence, the earlier you start, the bigger your corpus. Creating a retirement plan should definitely find itself a place on your list of financial moves to make before hitting 30!
The Bottom Line
Becoming financially independent doesn’t need to be a daunting task. As a matter of fact, it can be an empowering process that’s made easier by taking it one step at a time. Getting your finances in order before you hit your 30’s will hand you the financial freedom that will make all your hard work well worth it!
*Disclaimer: Taxes are subject to change as per tax laws.