10 Things to Do Before You Turn 30 – Financially!
Hey you! Yes, YOU! Have you set and prepared your financial goals? Being in your 20s can be quite an exciting place and time to be in – you have the freedom to have your own set of rules, and you also start to learn and understand how valuable independence is. However, a huge part of independence is formed by your ability to financially provide for yourself.
It is quite a good feeling to know that you are on the right path with your money, and there is no better time than now to start working on getting the financial security you need. Check out these 10 financial goals to achieve before you hit your 30s.
Focus On Clearing All Your Outstanding Debt
This includes all of the debt you are holding, including student loans, personal loans, credit card dues, and any other debts. Payments of these sorts come with interest rates, and some of these rates can be quite high. Your main focus should be clearing all of your outstanding debt otherwise, the repayments and the interest charges on your outstanding dues will keep sucking out your money until they are completely cleared and paid off.
You should focus on paying off your debt that carries a high-interest rate first as it will help you in reaching your financial goals and saving funds more easily. And believe it, once you make that one last payment, the feeling will be unbeatable great!
Form a Monthly Budget
Putting funds towards your savings and paying off your outstanding debt is easier when you have a proper monthly budget in hand. When you have some free time, make sure to sit down and write down all of your expenses along with your earnings. Keep aside a fixed amount of money for bills, rent, food, transportation, entertainment, repayment of the debt, and savings. You should also set the amount aside for any term insurance premium payments that you might be having, and if not you should consider opting for a life coverage as soon as possible!
When you only have a fixed amount of money that you can spend, you will start to notice that it is possible for you to save money without putting too much thought into it.
Stop with Any Impulsive Expenditure
Spending out of impulse can lead to a decrease in your savings and along with this being a waste of money most of the time. Before you go ahead and purchase something, ask yourself a few questions. These questions should be – Do I need this? Why am I buying this? The payment for this item is going out of my weekly budget or out of my savings?
A good thumb rule to follow is that if the payment for the item is out of your savings’ fund, and then drop it! And, if you are purchasing the item with your budget that you have set aside for the week, then come back the next day for the purchase and if you still want it, go ahead and buy it!
Set Financial Goals In Line With Your Career
More than often, it is likely for you to have set plans well in advance when it comes to the career you want to opt for in the foreseeable future and earn more money. However, writing down these plans can help you in solidifying them along with providing you with the motivation to work hard every day towards them.
Try and give yourself a rough time limit within which you should aim to achieve them. This way you can be certain whether or not you are on track and also keep a constant check on the progress that you have made.
Get Rid of Any Luxury
Most of the people out there have quite a few luxuries or treats that they indulge in every now and then. Try and track your expenditures every day for a month and see if you are spending money on any such categories that might be getting wasted.
For example, many people end up buying lunch outside or coffee from a joint every day. However, swapping from these outside joints to homemade meals and coffees can actually add up and make a significant financial difference. Try and cut down on one luxury at a time, and put these funds to better use instead. You can put these extra funds towards your savings, retirement funds, or life coverage in the form of a term insurance policy.
Make Timely Bill Payments
One of the most important goals financially in your 20s is to make timely payments of your bills. Having unpaid bills can leave you in a position with bad credit, and also they can create quite the pile and end up becoming very tough to pay. Try and stay on top when it comes to paying your bills. You can do this by opting for automatic payments so that you never manage to miss any payment, even if you forget.
Aim at Having Emergency Savings = 6 Months’ Living Expenses
It may seem like quite a large amount but if you are on track with your monthly savings, you will eventually have a sufficient amount of savings to cover your expenses for at least half a year. Life can be uncertain, and so can the future, it is always less stressful to have a safety net just in case for any tough scenarios. You should put your funds either towards a term insurance policy or towards a saving fund yielding high returns.
Save Towards a Home
It obviously is not essential to save towards a home when you are in your twenties, but if you are in a scenario wherein you have cleared all of your debts, it can prove to be quite a smart idea. It takes a long period to save enough money for buying a home, so the sooner you start with it, the sooner you will be able to get on top of the property game (if obviously, that is something that interests you).
Investing is one of the most useful and fruitful ways to increase the amount of your savings. However, you need to be sure to be sensible if you are going to opt for this route. You should seek proper guidance from the experts and professionals in this field, and allow them to guide and support you when you are making any decisions regarding your investments. Also, try to keep track of this by taking notes because this will help you in making your own financial decisions later in the future.
Start Saving For Retirement
When we talk about saving for retirement, many out there feel like this could be put off for quite a long period or so. However, putting aside even quite a small number of funds every month can make a significant difference. It obviously does not have to be much as per the point in time, so study and review your budget and see the amount that you can manage to spare aside. Even a minimal sum of money can help you be prepared with a foundation for your future. A thumb rule to follow for you can be to start saving 5% of your income and gradually increase it to 20%.
To Further Conclude
It is really important for one to be prepared for the future, especially financially. Do these things to keep your money managed well, and do not forget to buy coverage in a cost-effective way via a term insurance policy – because the sooner you opt for it, the better it is for you!