Though there is no right age to follow your dreams or start something new, you might miss out on a lot if you don't start early -- especially with financial goals.
A momentous milestone, 30, is the stage of our life when most of us go through a lot of changes. Though there is no right age to follow your dreams or start something new, you might miss out on a lot if you don’t start early — especially with financial goals. We often think that we have an ample amount of time to achieve anything. However, the key to it is starting early. It might seem difficult to set milestones in your 20’s because most people have a lot going on with different career and life paths. Whether you are married or single, these goals will help you plan for a better financial future. Experts say a head start on investing and saving could mean huge financial gains in the future.
To lead a secure financial future and to help you optimize, here are few financial rules to follow before you hit 30:
To have a financially comfortable and secure future, you need to start saving early. If you start early the amount you save doesn’t matter, because you give your money time to grow. Even a small amount invested at a regular interval can get you big returns in the future. And no better time to plan and start this before 30.
Experts suggest one can start saving with 5 per cent with a goal of 15-20 per cent by the time you reach 30. You can start doing this by investing a small amount in a Systematic Investment Plan (SIP) and by diversifying your portfolio.
Become debt free
Without having many responsibilities, it is seen most people now take a loan for everything or buy it in credit. Though it is not bad to opt for a loan or take credit, you should also get rid of all your debt within the scheduled time. Be it your credit card bill, or your student loan EMI, try to pay it within the due date and not roll over the credit. If you have a lot of debt, assess your situation and pay down unwanted debt rather than piling on more debt.
Create a contingency fund
This is a way of taking precautions before you eventually need money in an emergency. This will also make you feel less stressful and safe. Experts suggest one should have enough funds set aside to cover for 6 months of their regular expenses. However, these emergency funds should be used only for emergencies like job loss, unexpected family need, or an accident. This should not be touched for any lifestyle needs.
Make a monthly budget
Though this sound as the most boring job but getting a monthly budget done before spending can help you in many ways. You not only know where all your money is going, but you can also figure out later if some of your expenses were on impulse or something you actually needed. You can start to list down your income and expenses every month, and then plan your budget. First set aside money for paying utility bills, then manage your debts and savings. This way you can also keep track of your monthly expenses.
Get a good Life and Health Insurance policy
With our medical costs touching the sky, it has become imperative to have medical insurance in place. Without health insurance, an unexpected illness can leave one’s wealth eroded. If you have dependencies, you can also opt for a basic term insurance cover at this age, because the premium outgo will be much lesser now. Both health and life insurance can also help you to save taxes under 80D and 80C respectively.