30 is that stage of your life, when things really change and for most of us; it's a momentous milestone. There is a saying that- it's never too late to follow your dreams and there is no time like the present to start...but the trouble with most of our mindset is, we think we have ample amount of time and can achieve our financial goals at any age. That's the reason most of us spend too much time on what is urgent and not enough on what is important.
It's very important to start saving for your future at the right time and age. So, are you the one who is turning 30 and still doesn't know from where to start and save for your future? There's no need to worry, just follow these financial rules before you reach 30, which leads you to a secured future.
1. Start saving early: Remember that a goal without a plan is just a wish. To spend the rest of your life to be secure and comfortable, you need to start early and save. And 30 is the right age to actually think about your future in a planned way.
If you are new to your job, then start saving with small amount every month, It is always advisable to start saving with 5%, with a goal of 15-20% by the time you reach 30. "At 30, one still has almost three decades of working life. so, even if they have not done anything till then, nothing s lost", says Suresh Sadagopan, Founder, Ladder7 Financial advisories.
You can start investing by doing a systematic investment plan (SIP). SIP route is a best way to start your investment. One can increase the amount of SIP every year with the increase in salary. Do keep inflation in mind and then invest. Put small amount of money by diversifying your portfolio.
Don't put all your money in on asset class. Put only 10% of your amount in gold and invest rest in equity, mutual funds and real estate accordingly.
2. Make yourself debt free: At the age of 30, one is at the stage where he or she can take financial decisions in a better way without having much responsibilities and so, it is advisable to save money by getting rid of all your debt. Remember, bad debt is sacrificing your future day needs for your present day desires and to lead a tension free life you have to pay all your debt.
"Taking on loans for everything before one can afford the purchase, is a recipe for disaster. It's better to reassess one's situation and pay down unwanted debt rather than piling on more and more debt. One should try to strive to save and buy the objects of desire, rather than taking loans. A LED TV or a smart phone can wait", says Sadagopan.
Whether, it's your student loan EMI, or credit card bill, try to pay it as soon as possible when you are young. You should always end careless spending in your 20s. Instead of spending your money buying a latest Smartphone, your focus should be on paying your EMI and credit card bills first. Paying off debt is one of the most important factors. Before you reach 30 try to pay all your debts, if not at least try to minimise the debt.
3. Create a monthly budget and then spend: Without a better plan you cannot save and pay your debt. Try to list down all your earnings and expenses every month, then plan your budget accordingly. Always try to set aside some money for paying utility bills, debt and savings. Without right budget, you cannot plan to save and pay. At the age of 30, you are young, so it's important to have a clear understanding of what you want to save and how you will save.
Understand your financial goals and then spend. Keep a track on your monthly expenses. You can actually enjoy your 50s by making a habit of savings in your 30s. Monthly budget will really guide you to save money and achieve your financial goal.
4. Save for contingency: It's a bitter truth that future is uncertain and no one can actually predict the future. So, it's advisable to take precautions before you need money eventually. The habit of saving money for emergency will make your life feel less stressful and safe. In case of emergency, in your 30s, it is advisable to have enough funds set aside to cover 6 months of your regular expenses. Emergency funds are like a boon for one who lost job, met with some accident, injury or unexpected family need. Don't touch your emergency funds for any lifestyle needs.
5. Save money to buy a home: In your 30s, it's actually the time when you are young, energetic and can dream to fulfil your future goals. Home is something which every one of us dreams to own. 30 is the perfect age, where you can start investing your money in property. At certain age you can even rent out part of your house and earn money. But before that one should know the pros and cons of buying a house in young age. Take the help of a financial adviser and then decide whether you should buy a house or stay in a rented house and then start saving.
"Buying a property is a big decision. One will mostly need to take a big loan. Hence, it's a huge commitment. One should do it, only one has the cash surpluses to comfortably repay the loan over time", says Sadagopan.
6. Buy a good life and health insurance policy: At a young age, to buy a good life insurance policy is something which can actually protect rest of your life and you have to pay less also because of lower mortality charges. Life is really unpredictable and so, make sure that you have a term insurance cover in your 30s because the earlier you take a life insurance policy, the lesser premium you have to pay. Similarly, health is also a major factor.
To lead a wealthy life, health also plays a major role. "Medical costs have sky rocketed. It is imperative to have a medical insurance in place so that one's wealth is not eroded when illness strikes", cautions Sadagopan. It is advisable to take one extra health cover along with your company's health cover for you and your family.
Health and life insurance will also help you to save taxes under 80D and 80 C respectively. At the end don't forget that health is wealth and to protect yourself from any incident, health insurance can really help you.
7. Save for your retirement: 30 is the right age to prepare yourself for your retirement. Start investing and put your money in a good and suitable retirement plan before you turn 30... To have good corpus before you retire, go for good retirement plans and take financial advice. "Starting early ensures that one needs to put aside a small sum every month. Do it now. Retirement is the only goal for which you cannot borrow", opines Sadagopan.
Remember, it's never too late and in your 30s- right advice can really give you long term benefits and a blissful future.
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