• Financial Planning at the age of 30 years
  • By the time you're in your 30s, you're usually settled in a career, although you'll probably change jobs a number of times before your retirement. You're likely to have a family of your own, with all the accompanying expenses such as various activities or lessons for your kids, family vacations, saving for your kids' college educations, buying a new home, etc. You should have an emergency fund equal to six to eight months worth of expenses as a financial safety net to protect your assets in case of an illness, disability, job loss, or other unforeseen event.

    The reality is that with 30 years until retirement, planning is easier because you can start small and still end up with a big pile of cash and income at retirement. In your thirties, you can afford to take risks that you can not take later because theoretically you have time to fail and start over.
    The first thing that you need to do is to start a regular systematic savings plan if you have not already done so.

    The idea here is to pay yourself something every pay period or once per month. Once this is established and becomes a routine, you are ready to move on to the investment stage of financial planning.
    5 things to get started
    1. Start tracking your expenses - Know what you are spending on. We bet you will be surprised at the amount you think you are spending versus the amount you actually spend.
    2. Remain within a budget - If you don't already have a monthly budget, make one. Make sure your expenses are within this budget.
    3. Pay off debts first - Especially pay of your credit card debts. Credit card companies charge large amounts of interest (in the range of 30-40% p.a.) on amounts unpaid at the end of the 30-day credit period. Compounding interest on credit card debt can take a nasty turn. In addition it can spoil your credit history for a much more serious loan that you might require later on, for say a house. Use your savings, to pay off the debt with the highest interest rate. If the savings you have invested are earning you 7% and the interest rate on your debt is 10%, paying off the debt is an obvious choice, isn't it?
    4. Diversify. Understand the need for asset allocation. This is the most fundamental thing you need to know about investing. It's about balancing your investments so that risk is minimized.It's by far the most important thing to know in your quest for wealth.
    5. Start investing in equity - Historically, the longer you remain invested in equity markets, the greater are your chances of making some serious money. Our advice, therefore, is to start investing in equity at this early age.
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