BANGALORE: Though many people tend to spend freely and oftentimes get into debt in their 20’s, you should aim for some money milestones by the age of 30 in order to secure your financial future.
By the time you hit 30 years, you should definitely have a few money milestones in sight. Setting and attaining goals with financial planning at a young age will put you ahead and allow you more long-term financial security. Here are some money milestones to aim for with financial planning so that you go into your third decade with confidence.
1. Decide on your goals
Decide what you want and where you want to be in the future.Think about short-term goals, such as going to grad school, buying a new car or planning a wedding. Then look at medium-term goals, such as buying a house, starting a business or having children. And finally, think about your long-term goals, such as retirement or owning a vacation home.
You must identify what you want before you can map out a strategy on how to get there. Start by setting up a budget. Then learn how to save for different time frames.
2. Do major investments without the help of your parents
This can be a car or even a house, if you can afford it, but going through the process of making a large purchase on your own will prepare you for other major purchases in the future. Buying a car is probably the easiest of these.
All you need to do is find the right car for you and the dealership can help you set up financing. Just do some research beforehand to make sure you aren’t getting scammed.
3. Eliminate Credit Card Debt
Credit cards are a major convenience. They are so handy that young people often find themselves drowning in credit card debt because they misunderstood how much of a toll interest actually takes. By age 30, you should be able to live on your own paycheck without having to resort to credit cards.
Budgeting in order to keep track of your money can go a long way towards living free from your credit card. Financial planning will help you create a budget you can live with to ensure you get both what you want and what you need.
4. Save for retirement
Although not many 30-year-olds are thinking about retirement, it’s a good age to start the preparation. The sooner you start building up your retirement funds, the easier it is to guarantee yourself a high level of living in your golden years. Waiting until later in life to start saving for retirement is a risky proposition.
Many of the toughest decisions in life come after age 30, so you will want to have a strong financial foundation to see you through the challenging times. By using careful financial planning, you should be able to tackle any financial obstacle that comes into your path.
5. Become Financially Literate
Making money is one thing; saving it and making it grow is another. Financial management and investing are lifelong endeavors. Making sound financial and investment decisions is important for achieving your financial goals. The more knowledgeable and experienced you are in financial matters, the fewer mistakes you will make.
Research has shown that people who are financially literate end up with more wealth than those who are not. There is a strong monetary incentive for becoming financially sophisticated. Taking the time and effort to become knowledgeable in the areas of personal finance and investing will pay off throughout your life.
6. Don’t compare your finances with others
By age 30, some of your peers will have enjoyed tremendous success in their careers, and others will be struggling. At 21 there was little predict who would end up where, but by now the cards have been dealt and maybe you didn’t end up a millionaire by 25.
While it can be hard to quell jealousy when someone is enjoying more financial success than you, your situation is yours and you have to manage it best you can. It’s time to get over this, bury the green-eyed monster, and move on.
7. Start an emergency fund
One of the smartest moves you can make is to have cash on hand to cover three to six months of living expenses. The idea is to have enough money available so you won’t have to rack up credit card debt or sell investments in case of a financial emergency, such as a job loss, unexpected medical bills or even last-minute airfare for a funeral. Your money should be safe and accessible, so you’ll want to store it in a bank money-market account.
Source: Silicon India.