50/30/20 Budget Rule & More: New Year Financial Goals For Those In 30s

Financial Goals For
Those In 30s

If you are in your 30s and your New Year resolution is to save more and be financially prudent in 2023, follow Money Today’s quick tips to achieve your budget goals!

Follow 50-30-20 rule

- 50% of income should be spent on needs 
- 30% on wants
- 20% should be saved 

Plan for contingencies

- At least six months of your monthly expenses should be in short-term funds
- Your long-term investments are not to meet contingency expenses 

Do not withdraw EPF
money

- Income plus withdrawals are tax-free (unless exceeding Rs 2.5 lakh) in EPFO
- Compounding benefit helps you in accumulating retirement fund fast

Open PPF

- You should certainly open PPF because of its tax-free status. 
- It helps you to save solely for retirement. It has a lock-in period of 15 years

Buy health insurance

A single hospitalisation can wipe out your entire retirement savings. The more you delay in getting a good health insurance, the more difficult it gets to buy a cover at a later stage

Buy adequate life insurance

- Calculate your liabilities and go for a simple term insurance policy 
- Increase or decrease your life cover as your liabilities change 

Keep Track of Credit score

- A good credit score helps in getting cheaper loans
- Keeping track of your credit score alerts you in case of any identity theft

Do not ignore Inflation

Inflation reduces purchasing power substantially over long-term. Invest in assets that offer inflation-beating returns

Diversify your portfolio

Decide on the right asset allocation. The Thumb rule is “100 – Your age” to decide the equity exposure that one should have

Plan for retirement

Start saving as early as possible. Early investing helps you to reap the benefits of compounding

Reduce or refinance
high-cost debt

- Get rid of high-interest loans
- Consolidate your loans 

Plan for child’s high
education

Start SIP for child’s higher education. Equities tend to give higher returns over the long term

Prepare estate planning

- Have succession planning in place
- Keep all important documents in one place 

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Story by: Teena Jain Kaushal
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