The thirties are a most chaotic time. In the twenties you have worked hard and got a job and may have climbed up a few ladders. You may be newly married enjoying a carefree conjugal bliss and not planned kids. Then come the thirties when you start getting out of the euphoria of the twenties. Now you are in the process of settling down from the wild twenties. Now the retirement looks quite far and the feeling of your work life is also old. You are just in between a college pass out and the middle ages. This is the right time to plan your finances. If you push it till the forties then it will be too late.
So I will give you a financial checklist in which you have to start from the start.
1. Calculate the surplus in your budget. Hopefully your income has increased but so has your expenses. Also you may have started some sort of savings. Just check your bank account and see what is the average amount that is left in the account at the end of the month. You will find some surplus which needs to be invested.
2. Increase your emergency fund. In the thirties it is important that you have a good emergency fund. Now you will be increasing the size of your family and your expenses will also increase. There may be a situation when you might get laid off. But you cannot lay off the expenses. So you will require an emergency fund. Unforeseen medical expenses can drain your resources. It will be good if you keep 6 months expenses as emergency fund. You can keep them in bank account or a liquid fund so that you can withdraw it quickly without much hassle.
3. Health insurance. If you haven’t taken one then consider taking it for you and your family. Also consider disability insurance. These insurances should be effective as long as possible and should cover maximum diseases. Also remember about the future cost, what seems adequate today will not be so after 20 years. So keep topping it up with age.
4. Upgrade credit card. Credit card is a good thing if it is used wisely. Try to make full use of the offers and discounts and the cash backs which it offers. If you plan wisely then you can also get free air travels as all cards give mileage points. But always remember to pay your dues in time without attracting penalty. Don’t fall for partial payment trap. If you don’t pay timely then your credit rating will take a hit.
5. Plan your retirement. Though retirement seems quite far but actually thirties is the right time to plan your retirement. Plan how long do you want to work, where you want to settle after retirement, How much will be your monthly expenses, medicare costs, how do you want to travel after retirement- luxury or budget. Once you have done the calculations then plan your investments accordingly. It is important you include the inflation factor in your calculations.
6. Set financial goals and achieve them. Once your retirement plan is ready now it’s time to set financial goals both short term and long term. Be a disciplined investor. You have enough time to have a comfortable finance if you are disciplined. You have to consider everything like children education, buying a car and a house, your holidays, job switch, even wealth generation for future generations. Even if it requires cutting some expenses now then don’t postpone it. Ideally your income minus your investments should give you the figure which will be available to you for your expenses.
7. Estate planning. If you have enough of those then you need to plan it. Always have nominee for all your financial investments and insurances. Also all your investments and insurance and properties should be known to your near and dear ones, more than one. Make a death file where you should keep record of all things which you would like your wife and children to know if you pass away suddenly. And the location of that file should also be known to them. Make a will for all your properties.
As per the present life expectancy you will live till old age but you need to plan from the thirties so that your old age life is comfortable and hassle free. This is an important planning and don’t put it off for any reason what so ever.
