7 financial decisions you need to make before you turn 30

7 financial decisions you need to make before you turn 30

It is never too early to plan your finances. So, if you are in your 20s or turning 30. It is the right time to make important financial decisions of your life. It is very important to start saving for your future needs at the right time and age. The decisions you take at this stage will impact your financial security later in your life. 

A financial plan should be followed to build a strong financial base to secure your future life. This phase of life is the right time to put in all your efforts to achieve your major financial goals to lead a comfortable life after retirement.

When you grow older, some financial products become more expensive or even few products became inaccessible. Other than this advantage, saving early would ensure you have a greater number of years to invest and it will compound to many times by the time you retire. 

There is an old saying that – it is never too late to follow your dreams and there is no time like the present to start. In this post, let’s look at the financial decisions you need to make before you turn 30.

Here are 7 financial decisions you need to make before you turn 30

You need to take the following 7 financial decisions before you turn 30 so that you can lead a comfortable life after your retirement.

1. Save money for retirement

Start planning for your retirement when you are in your 20s or at least before you turn 30. You may argue that there is ample time to plan retirement, but as per experts this is the right age to prepare yourself for your retirement (the earlier the better). It is good to have enough money at the time of retirement, so you do not have to rely on your kids for your expenses. So, start investing and put some part of your income every month in a good and suitable retirement plan that will help you reach the target you have set for your retirement.

2. Save money to buy a home

Every one of us would like to own a place we call home. Even if you don’t want to buy a home for several years, you have probably started thinking about how to save for a down payment to buy a home. A down payment for a home makes it easier to qualify for a home loan. This is the perfect age, when you are young, energetic and can start saving your money to fulfil your future goals. Saving this money will help you be ready when the time comes and will also give you more purchasing power to find the perfect home of your choice in the area or locality that you want.

3. Get Insured

Life is uncertain and life insurance can provide financial help to your family when you are no longer around them. Nothing can replace a loved one but advance planning with life insurance can make things easier for those you leave behind. The earlier you buy a life insurance, the lesser the premium amount you need to pay. So, secure your family's future today and make term insurance your best friend. And do not stop with just life insurance cover. With rising medical expenses, you also need to buy a health insurance to cover you and your entire family. Health insurance policy provides financial cover to individuals for any unforeseen medical emergencies, be it an illness or an accident that has led to hospitalization.

4. Build an emergency fund

Future is uncertain, and no one can predict the future. So, you should set aside at least six months’ worth of expenses in a separate emergency fund for emergencies. The size of emergency fund varies according to individual needs and circumstances. While building an emergency fund, you also need to consider your existing EMIs and insurance premiums that need to be paid regularly. The habit of building an emergency fund will make your life easy and you can tackle any financial emergencies easily. However, you have to make sure that you do not withdraw from this fund unless it is for emergencies.

5. Make a clear direction of your career

By the time you hit 30, you would have changed a couple of jobs. Your job/work is your financial asset, and the one that generates the income for you. By the age of 30, if you are not well settled in a job/work, you have to do some soul searching. You should also know what makes you happy and helps you to generate the income. If you are satisfied, then stick to it and follow a routine investment plan that will help you reach the financial targets you have set for yourself.

6. Save for your children’s education & marriage

Even if you are single, it is important for you to start planning for children’s education & marriage as early as possible. You should have a rough child investment plan in mind to financially secure your child’s future. Since the cost of education increasing every day, you need to plan for your children education in your 20s only. Make sure you set a separate investment plan for your children’s marriage.

7. Invest in yourself

Investing in yourself is one of the best returns on investments you can have. Do not stagnate but continue to increase your income by investing in yourself. Develop new skills so that you get a promotion in your current job. Keep learning new techniques and keep your skills sharp. That way you will always justify your promotions and remain valuable to your organization.

Making the right financial decisions in your 20s will take you on the path of financial security. So, start from today and build a strong financial foundation for your future life.

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7 financial decisions you need to make before you turn 30