Your 30s are an exciting time. You’re generally making more money than you were in your 20s, and you’re looking to the future to decide the type of life you want to live. Your 30s are a great time to take control of your finances so that you can have more security and flexibility in the coming years.
Here are five financial tips to follow in your 30s to help you get ahead.
Create a budget and stick to it
Budgets are a great way to set financial goals and create a strategy for achieving them. Far too often, we go from week to week without any overall plan, which usually results in not getting ahead—and sometimes we even go backwards and end up in more debt.
Determine your goals, both short and long term, and figure out what you should do financially to reach those goals. Do you want to buy a house? Renovate? Retire early? Go on a big vacation? Should you spend less? Sell some belongings? Put more money in savings?
Without a budget, years will go by, and you’ll realise you’re in precisely the same place financially as you were years ago. Instead, design a budget, set out how much you can spend—on what—how much you will save, and what you need to do with the rest of your money. Then, stick to your budget.
Diversify your income
Multiple income streams can allow you to increase your earnings and protect you in case of an emergency. Income from your job provides you with stability, but what happens if you’re suddenly unfit to work? Having several sources of income protects you in such situations so that you won’t find yourself in a financial crisis.
You can invest in stocks or property, for example. Or you can create a passive income by writing a blog on areas you’re an expert in. You could also have a side job that allows you to earn extra money to pay down your debt faster.
Pay off your debt
It may be impossible to live completely debt-free in your 30s, but getting rid of some debt such as lines of credit and credit cards can free up your income to allow you to save better for the future.
Pay off your credit cards, your lines of credit, and anything that has a high-interest rate first, then move on to other debts with lower interest rates.
It’s tempting to overspend because we want to keep up with our friends and family around us. Generally, when we hit our 30s, we’re making more money, have more significant disposable income, and are surrounded by people who are also spending their money. It’s natural to want to keep up with the Joneses.
The main problem is that spending too much in your 30s can affect your finances for many years to come. Instead of buying a big house that impresses everyone but eats up your income, consider something smaller that’s more affordable. Rather than purchasing a high-power fancy new car, consider a less expensive model.
There are times when it can be necessary for you to spend big on items, but don’t do it just to keep up with other people—and definitely don’t do it if you can’t afford it.
Have an emergency fund
An emergency fund is vital to help you get through any extreme financial circumstances, especially during pandemic times. Even if you’ve diversified your income, it’s important to have funds that you can access quickly if those dreaded unexpected expenses, such as car and home repairs or medical bills, arise.
An emergency fund is there to carry you through unanticipated circumstances, but having one also means you won’t have the stress of worrying about what will happen to you if something does go wrong. You have the peace of mind of knowing that you’ll have the financial security to react and adjust.
The amount recommended for an emergency fund will vary depending on your lifestyle, finances available to you, and job, but consider having around six months of expenses in a particular account. Then promise yourself you won’t go near that money, except in a real emergency.
By following these simple tips, you can take essential steps in your 30s to set yourself up well financially for the future. Get in touch with us today and Join the Conversation…