Once you reach 30, you can safely say you’re an adult. You are probably working full-time and might have a family. It is also likely that you are earning more money than ever before.
At the same time, you have also more responsibilities and considerations than you did in your 20s. These include career decisions, concerns about providing for young children or aging parents, and plans for retirement (a stage of life that becomes increasingly more real in this decade).
This is a good time to take stock of your financial situation and make sure you have the following key financial rules in place:
1. Invest in a financial plan
By now, you should have a budget and spending habits based on a regular set of spending needs. It’s time to make that budget official and to open it up to long term goals – what do you want your retirement to look like? What do you want your money to do for you? What do you really want to spend it on? What about your family’s goals? Align your spending habits with your life goals and you will be much happier (and wealthier) at the end of every month. Need help? Talk to your financial adviser about a wealth management plan.
2. Save and invest like your life depends on it
If you haven’t put in place a regular savings plan and started investing a portion of your wealth for the future, start today. Effective investing is based on sound advice and the power of compound interest. The sooner you move from living from month to month to having savings and investments that will work for you in the future, the better for you and your family.
3. Get serious about your emergency fund
If you have an emergency fund in place, good for you. You understand the importance of being prepared for the unexpected. But when was the last time you evaluated this fund? Is it substantial enough to cover your current lifestyle? Is it still based on the responsibilities you had in your 20s? You should have at least 3 – 6 months of your salary saved to ensure that you will stay out of financial trouble should you be unable to work or make money for a period of time.
4. Pay off your high interest debt
Debt is a real drain on your finances. While some debt is difficult to avoid, for example, a bond on your house, you need to commit to paying off high interest debt quickly and staying out of debt as much as possible. Rather save for the things you want and let your money work for you rather than for someone you owe.
5. Protect your assets
In your 30s, you will start accumulating major assets like your own home. It is important to have the correct insurance in place. Think about your most valuable possessions – what would it take to replace them?
6. Factor in children
Children are expensive and these expenses grow and diversify as they grow. If you are wanting to have children, you need to spend time thinking about how you will provide for them, their financial and educational needs, and future goals, for example, a university education. Do not compromise your retirement planning or leave any planning ‘for later’. You need to start planning now to avoid financial stress at a later stage.
Your 30s are a time for building and protecting your wealth. Want to work with an expert who can help you do just that?