Turning 30 is a big milestone in anyone’s life. If you are about to turn 30 or are in your late twenties, it is time to start ‘adulting’, and take a look at your financial portfolio. Ideally, most of the groundwork for a good financial future should be laid down in your 20’s but if you have not don’t worry. It is never too late to pave the way to a new financial future.
When you are about to hit the big 30, there are lots of things that may change. You might not have the freedom that you had in your 20s. Let’s, face it, things change. And, it is in your hand to make the change a good one. Do not take your money for granted because you never know what life will throw at you.
Here is a List of Useful Tips:
1. See where your money is going: One of the first things that every person in this age group should do is to keep a track of spending. It is very easy to lose a track on things, especially when you are young. This is why it is good to lay out a solid expense tracking mechanism. For this you can:
- Divide all expenses into various categories such as rent, food, utility bills, travel, entertainment, etc
- Then, take a look at the area where you are spending more than what you should be
- Chalk out a practical budget every month and stick to it
2. Ask for a raise: Not many people know that it is good to negotiate their pay check — be it at a new job or an existing one. Remember, if you do not ask for something, you do not get it. A pay jump at this stage in life can significantly improve your earnings at a later stage in life, especially during retirement. But remember, you should look desperate and should be very confident when you are making a move. Here are some things to keep in mind:
- Take on more responsibility and ask for a higher pay check
- If things don’t work out with your current employer do not get disheartened, there are many opportunities out there
- Be prepared for a no
3. Pay your credit card bills on time: It is very important to make sure you are not accumulating bad debt. So, ensure you are making credit card bill payments on time. There are different ways to pay an outstanding credit card bill such as net banking and NEFT. For example, if you have an ICICI credit card and a SBI savings account, you can still pay your credit card bill through NEFT. All you need to known is the SBI IFSC code for credit card. Other net banking services will also be available through SBI’s YONO app.
4. Renting Vs buying: Another thing that is very important to keep in mind is housing. If you are currently renting, it is high time you think of getting your own home. If you have a stable job, it is better to buy a home of your own. There are many home loan options available and financial experts say that paying home loan EMIs are far better than paying rent. The logic here is why pay rent, when you can pay the same as home loan EMI and build an asset class for yourself. It is wise to also to start saving for a home loan down payment.
5. Lifestyle choices: In the end it all boils down to lifestyle choices. Would you rather take a cab or take public transportation? Would you order takeaway everyday or cook food? Is that morning run to that expensive cafe necessary? The choices that we make every day, determine how much we have left in our pockets at the end of the month, and quite literally.
6. Start planning your investments: Your money will not multiply and pay you back unless you make it do so. Just keeping money idle in a savings bank account is as good as spending it. So, the first thing that you need to do before you turn 30 is to start planning your investment portfolio. Begin with small risk-free investments such as recurring deposits or fixed deposits. You can also think of options like mutual funds or Systematic Investment Plans (SIPs). The key here is to choose investments that will fit into your life and that will eventually help you meet your investment goals.
7. Use technology: There are a number of financial apps that have been launched in the market. These help keep a regular and systematic watch over your spending. Not just this. Many apps will also help you make investment decisions by giving you tips based on your financial portfolio and expenses.
8. Plan for the long run: While we all think of savings, remember that it is also wise to make some long-term investments. This means that you will have to plan for retirement. You can also invest in SIPs for the long-term by choosing a tenure that is around 10 to 15 years. Public Provident Funds are also a good option.
9. Don’t forget to plan taxes: Most young people tend to not do tax planning. This is one of the biggest drawbacks that will dent a big hole in your pocket. Sit down and see where you can make tax savings investments. There are many options such as mutual funds or even fixed deposits.
10. Save in categories: There is one way of living life — demarcating it into various categories. The same applies to finances. Segregate according to various expense and saving categories such as for travel, food, retirement, health, education, emergency fund etc. For example, put aside a set sum of money every month for a vacation that you want to take later in the year. Even if you save Rs.10, 000 per month, in twelve months you will have Rs.1,20,000.
11. Credit score: It won’t hurt to keep a tab on your credit score. This will greatly determine what type of credit you will have access to in the future. So, the advice is to be careful and keep a close watch on what you splurge on. It is often tempting to just swipe that credit card mindlessly and buy all the shiny things that you see at the mall or on your online shopping cart. Bad debt can literally ruin your financial future, so think twice before making any type of purchase decision.