Have you set your financial goals yet? By making the right and smarter financial decision at a younger age will surely prove to be a good decision. With age comes a lot of responsibilities that stack up on your shoulders. So, it is very important if you can manage your financial responsibilities well. It does take a lot of burden from your shoulder.
Here are Some Practical Financial Tips for Making the Right Choice Before You Turn 30!
Pen down your Financial Goals
The 20s is a phase to get your career in place so that you can go out and conquer the world. However, this is the time to get your future financial goals in place, right before you hit the 30s. Thus, writing these financial plans will help you to stay focused and determined to achieve the goal.
The difference between a wish and a goal is, to write it down in a more specific manner and make a plan towards achieving the same.
Your financial goals can be simple ones but it needs to be specific and realistic. If you have a plan to buy a house, make sure you pen down the kind of house you would want to buy, the approximate expenses for the same and when you wish to buy it. That way you can ensure that it’s not just a “wish” but a “goal”.
List of possible financial goals before you turn 30 could be:
- Expenses for your marriage/children
- Buying your dream car
- Owning a house
- Planning an exotic vacation with family or friends, etc.
However, there could be some goals that might not be there on your list right now, but those are equally or maybe more important, like Retirement Planning.
Once you have written down your Financial Goals, you need to make a plan to achieve the same. Financial planning is all about allocating a budget towards each goal in a realistic and achievable manner.
Mounting alongside a part of your income at a young age means a considerable savings fund in future. When you are in your 20s and you have fewer responsibilities, starting early can achieve your target in the specified time, provided you have proper well chalked out a financial plan for the same.
Choosing the Right Investment Instrument to Meet Your Financial Goals
The financial goals that you have planned for your family would become easier to achieve when you move towards them through appropriate investment vehicles. One of the simplest ways to do so is by investing in a SIP. Doing so would slowly yet steadily help you build a corpus. You have the freedom and flexibility to invest in mutual funds as per your budget as well as your risk appetite. A little insight on what funds to invest in can get you maximum benefits from compounding the returns.
Insure Yourself & Family (with Term Plan to Secure Your Family’s Future & Health Insurance)
No plan for the future can be successful if you do not plan for the uncertain and unpredictable incidents, the earlier you cover yourself as well as your family under an insurance plan the better. make sure you get insurance for:
- Life Insurance
Your absence can leave your family shattered, and in case you are the sole bread-earner, it would become extremely difficult for your family to deal with the financial loss. Thus to ensure that they do not face a financial crunch, even if something happens to you, give them the security of a life insurance policy.
- Health Insurance
A medical condition can eat up all your hard-earned savings in just no time at all. Having health insurance for your loved ones, especially in today’s time, has become imperative. Depending on your requirements and family size, purchase a health plan today.
Paying off the Bills Timely
Stepping into your 30s means a lot of responsibilities. And, responsibilities ask for good financial habits. Paying your bills on time is surely one of them. In this digital era, there are so many bills to be paid. Starting with your credit card bills to your telephone and wifi bills, from Netflix subscription to your electricity and other utility bills, all need to be paid on time to avoid charges and interest accumulation.
This is a good habit of setting up a track record of paying up the bills on time. This in turn also earns a boost in your credit history. Unpaid bills will not only leave you with bad credit history but also pile on the interest debt.
Thus, by paying your bills on time you will be able to set your credit score right from the very beginning. The one good thing about paying your bills on time is to set an automatic payment alarm so that we never miss it.
Never Let Your Debt Pile Up Too High
Each loan has a repayment schedule, which is best adhered to. So, if you have any loans like your student education loan, car loan, consumer loans or any credit card outstanding, it is best to repay it on time or in instalments, so that it does not affect your credit score in the long run.
And once you’re free from these outstanding payments, you will feel great and automatically saving up for your future will become much easier.
Make a Budget and Stick to it
Money Management starts with creating a budget. How you manage your finances will help you find out whether you are on the right financial path or not. You can start by making a list of expenses in the following ways-
- Calculate your disposable income after expenses
- Plan your mandatory expenses and your monthly bills, so that you know your discretionary expenses, which can be managed if needed
- Take out a portion of your income for investments so that it helps you plan for your financial goals
Planning your financial goals and saving for their fulfilment is step 1 and 2 done right. However, if the money is not invested, the actual value reduces over time due to inflation. Thus, investing is extremely important.
At the time of investing, you can plan it according to your financial goals pertinent at that point in time. It could be for your upcoming marriage, children’s education, vacation plans, new house, etc.
Opting for a good savings-oriented life insurance plan at this juncture is quite important for goal-specific investments.
Plan For Retirement
Retirement is an often ignored but extremely important financial goal. So, once you reach your 30s, it is high time to start planning for your retirement. You can contribute a small portion of your disposable income towards this goal to build a healthy retirement corpus. Millennials often plan a venture of their own or early retirement to pursue their dreams and passion. This fund can help you fund your dream venture as an early retirement opportunity as well.
Now that 30 is knocking at your door, it’s time to play the responsibility tab, especially towards your financial future. These 7 tips can surely help you sail through.