For Jay, now 39, the 30s seemed to be a decade of mixed experiences. There was increasing stability in some areas of life, lots of change in others. The turning of the decade marked the onset of financial responsibilities that would stretch over the next few years, mainly with the coming of his child and purchasing a house. The mid-to-late 30s were the years of his career highlight. His income had reached the level of comfort where he felt confident of meeting life goals without hiccups.

Like Jay, so it is with most people. In terms of career and finances, most people find their highest success through the mid-to-late 30s, when the long years of working up the corporate ladder is behind them and pay growth is peaking.

In fact, your 30s is also the time where there are opportunities to make wise financial decisions which set the tone for the rest of your life. There will be specific actions to take which you weren’t serious about in the late 20s. And there will probably be some unwinding of financial errors required, those which were made in the younger days.

Typically, here are the few things a 30-something should pay attention to in order to ensure a smooth sail. As you read through, remember that everyone’s situation is unique. These are meant to serve just as broad suggestions which need to be fine-tuned to apply to your life.

1. Have a big enough rainy-day fund in place

You probably have some sort of an emergency corpus which you can resort to, should an unexpected situation arise. Now it’s time to pump up that fund as you are likely earning more and have larger living expenses, probably have EMIs running and have dependents – think spouse and kid/s. Broadly six months of expenses works well for most folks. But the exact size of the corpus will vary from individual to individual. For instance, someone running their own practice or those in business would need a bigger fund than a salaried person with stable income.

2. Cover your life and family’s health adequately

There are popular thumb rules that suggest your life insurance should cover X times your annual income. However, these thumb rules may portray a picture that is far from your actual requirement. The better way of estimating the amount of life cover you need is to consider: one-time expenses (clearing off liabilities, corpus for parents, education/marriage of siblings, children’s education and marriage) and annual recurring expenses of dependents, survivor’s annual income and the years until the youngest dependent is expected to become independent. Remember to go for a term insurance policy. Anything else clubs investments with insurance and provides less than optimal results on both counts.

Your spouse and kids need to be covered under a health cover. Buy a health policy for your parents as well if they aren’t covered. Take a sizeable cover of Rs 4-5 lakh per person or a family floater of Rs 10 lakh that covers everyone.

3. Hike your savings rate

As your income and particularly disposable income rises, your savings rate needs to go up too. This is the time to start making serious contributions to the big-ticket expenses that will show up further down the line – kids education, marriage and your retirement. Aim to hit a savings rate of up to 40% of your income by the late 30s. Build your monthly budgets around the savings required for your major goals, and not expenses.

4. Set priorities for goals

Have a clear view about what the top 3-4 financial goals in your life are. A comfortable retirement should definitely be one among them; you will hang up the boots one day or perhaps want to slow down and focus on other things close to your heart. Contribute towards those golden years while you are working and earning. Next list down the remaining top goals – which in the typical Indian setting could be funds towards educating and marrying off the children. Are there more goals you’d like to plan for? List them and make systematic contributions; holidays in the next 5 years, car upgrade, all of them included.

As you find your way through your thirties, remember you’re likely in the best decade of life, going by what a lot of people have to say. The contrasts and highlights will bring a lot of learning that make one wiser and stronger. Make the most of it by making prudent decisions with your finances.

(By Amar Pandit, CFA and Founder & Chief Happyness Officer at HappynessFactory.in)