After you cross your 20s, a lot of things change. You tend to become more serious about your finances and how they can affect your future. It becomes slightly more difficult to do if you are an impulsive shopper. Sadly, maxing out your Credit Cards and living like there’s no tomorrow doesn’t really count as being financially responsible. If you have recently entered your 30s, it’s time for you clean up all your financial excesses and prepare for the major goals that lie ahead of you.
As you grow older, your income automatically increases. However, the sad news here is that your expenses shoot up too. You have to spend wisely and invest wisely to build wealth and have a secure future.
Here are a few steps you need to take in order to secure your financial health:
Plan For The Retirement
People often procrastinate when it comes to planning for retirement, assuming it’s too early to worry about it. While it may be true that you have time on your side, the earlier you start investing, the more time you give your investments to grow.
Delaying would imply the need to invest in riskier assets, aiming for a reduced corpus and an increase in the number of years till retirement. Also, consider the impact of inflation on the corpus when you calculate the amount you would need after retirement for your regular expense.
Choose Your Investment Assets Carefully
You can opt for an aggressive portfolio in your 30s by going in for stocks and Equity Mutual Funds but make sure you rearrange your portfolio from time to time to suit market movements.
You must diversify your portfolio to reduce risk. Invest in liquid assets to meet short and medium-term goals such as going on a trip or buying a car. When you pick an asset, calculate the effective returns after tax deductions.
Create An Emergency Fund
Once you have your goals in place, you might want to save part of your income for emergencies such as job loss, illness, accidents etc. An emergency fund is often ignored in financial planning, but it’s a must have to keep you going during an emergency. An ideal fund is worth six to eight months of your expenditure.
Keep Your Expenses Under Control
It’s time you got rid of your habit of overspending if any and keep expenses within your means. Create a budget to keep spending under control. This will help you understand how things add up.
Pay Off Loans
Sometimes borrowing can be necessary to meet your financial goals, but make sure you have proper repayment plans in place. Timely repayments can help you focus on other investments and improve your Credit Score.
Make sure you don’t get into more debt when trying to clear other debts. In your 30s, you have the time and the flexibility to build a corpus for a secure future.
Start now, start small, scale up, and reap the power of compounded growth.
Keep these financial tips in mind and you’ll be roaring through your 30s ready to take on anything the future may throw at you.
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