Financial checklist for 30-somethings
Your 20s were a blast, right? Lots of fun, lots of freedom, plenty of disposable income.
Now it’s time to knuckle down and get serious about your finances.
The first thing everyone in their 30s should do is plan. Financial independence is a destination and the journey towards it needs to be well thought out.
You need to set some realistic goals. It may seem a long way off but you need to consider at what age you want to retire, and what level of savings or investments you will need to fund the sort of retirement you envisage having.
The best asset people have at this stage of life is time. Compounding returns can make even modest investments look impressive after 20 years or so.
If you haven’t already done so, consider starting a savings habit.
The key here is to reverse your thinking so that you put away your savings first, then pay your bills and only then do you spend what is left over on other living expenses.
It doesn’t have to be a large sum, just a small amount that you can afford. If you start small, you will see progress and then usually momentum will build.
You should also consider property ownership. Owning your own home is an important goal for many people. There are so many benefits to home ownership beyond having a nice place to live.
If you choose to buy a property, you will need to work out where you can afford to buy your first home, and start pulling a deposit together.
There’s a fair chance you’ve got a bit of debt racked up on some credit cards and perhaps a car loan. You should consider reining this in to a manageable level.
Credit card debt in particular is a wealth killer because of the higher interest rates it attracts. And while you are at it, you’d better make a will.
Last but by no means least, there’s family planning. A large part of family planning is financial planning. Children are expensive and you need to be prepared for their impact on you and your partner’s bank account.
If you are planning to have a child, then as well as saving for additional expenses that come with a baby, you’ll need to plan for the loss of an income, especially if you or your partner are planning on taking extended parental leave.
All that is a lot to think about, but if you develop a strategy now and employ some discipline, you’ll be well on the way to a sound financial future.