As you enter your thirties your roles and responsibilities change tremendously. You may not be single anymore and have to think about prosperity and security of those who depend upon you. These new responsibilities call for a prudent financial planning strategy and a solid roadmap designed to make you win. Following are 5 few steps which can help you plan your financials in 30’s:
1. Planning for family is as important as finding the ideal life partner
Finding the ideal life partner or marrying your sweetheart is one of the important aspects in your personal life. But once we decide that we are getting married, it is even more important that we start planning on how to achieve financial prosperity for the entire family in near future.
During our bachelor days we either live with our friends or family. However, now is the right time to plan for a home all by yourself. Start financial planning about how much money you need to spend on renting house vs buying a house.
You should budget for important committed expenses such as household items and utilities and cut down on top 5 non-committed expenses (dining out makes a big hole). Once you are done with these basics, start planning for child care. Whether you already have child or you have not yet decided to bring your child to world does not matter. It is advisable you start thinking about expenses to give your child a better future. Nappies, toys, milk powders, clothes, school fees, donations, vacations, medical care etc. are costly and demand financial planning in advance.
2. Prepare for the unexpected events:
Someone’s sitting in the shade today because someone planted a tree a long time ago: Warren Buffett.
You should start thinking about safeguarding your family by getting health insurance, critical illness insurance, disability insurance and accidental insurance.
Not only these, make sure you insure all your existing loans and any other major liabilities too. Insuring your loans makes your family financially secure in case of any unforeseen uncertainties.
You should also gather all your financial information at one place and share it with your family members. Did you know many credit cards offer accident insurance these days? Are you aware of the amount and have you shared this information with your spouse?
3. Dream big but take baby steps today:
Start dreaming big and start taking those necessary steps to make those dreams a reality. Be it the dream of owning a car, home or starting a new business. Today is the ideal time to take control of your finances and channelize them towards achieving all your goals.
People generally follow personalized diet regimes and exercise regimes to get back in shape and get healthy. Similarly, your current financial health will help you achieve your goals only through a disciplined, customized and robust personal financial plan.
4. Put the money to work at different places:
In the current volatile economy, people who have exposure to gold have been saved. It’s time to start diversifying your investments if you haven’t yet. Don’t stick to a single asset class.
Having only RD accounts or investments in equity is not going to earn you the required returns to achieve all your financial goals. So start by listing your goals with timelines and attach monetary value.
You need to understand the monthly financial commitment in order to achieve them. Then evaluate your risk tolerance and choose the appropriate asset classes along with best in class financial products. It is advisable that you take expert opinion of unbiased financial advisor here.
5. Start College fund:
While your children are getting trained by the school to make it to a good college, you should start the preparations on how to fund their college fee. Make sure you give yourself a head start and a proper plan when it comes to saving and investing funds for your child’s education.
This is critical because you can’t afford to make a mistake when it comes to investing funds for child’s education. If you have a dream of buying a car or house and the investments made towards achieving those dreams go wrong, you can postpone buying them by some time. But education of your children is something you can’t postpone. So you have to be ready by the time they are ready to make it to the next level.