10 Financial Decisions to Make Before or in Your 30s
While the 20s is the time when most people are still trying to discover their own paths, the 30s is usually the age where people start to realize they should already be on the road to settling down. If you’re anywhere between that age, and have started to think of taking financial matters in your own hands, read on as we dish out tips to help you make the right financial choice for the long haul.
At this point, your financial decisions will shape the type of life you will have in the future, which means making the right and best choices essential — You want to lessen committing the same money mistakes over and over again, so read on and learn how you can make sound important financial decisions before your 30th birthday.
1. Maintain a Budget
Budgeting is something a lot of people don’t like to do. However, it is necessary because it helps you keep track of where your money goes. Doing this enables you to better understand your spending habits and figure out if you need to make any changes to your current lifestyle.
Setting a budget and sticking to it is a good habit to cultivate. It fosters discipline and self-control, which is exactly what you need to have a financially secure future.
2. Have an Emergency Fund
We never know when emergencies will happen. It could be someone in our family getting sick, losing a job, or other instances when we find ourselves in need of extra funds. A lot of Pinoys are unprepared for this and thus resort to borrowing money from friends or relatives. But what if you find yourself with no one to borrow from?
Don’t allow yourself to get into that situation. Start establishing an emergency fund now. You can build it little by little until it reaches a certain amount that will give you peace of mind.
3. Invest in Yourself
By the time you’re 30, you’re likely to have created a career path for yourself, but that doesn’t mean you should stop learning and growing.
Spend your hard earned money on advanced studies or workshops that will teach you to learn and do new things as well as acquire new skills. This opens you up to more opportunities that can possibly increase your market value and become an asset in your next endeavors.
4. Invest Wisely
Most Pinoys have a vague understanding of compounding and investing in stocks and bonds and thus steer clear of them and play it safe. However, investing must be done as early as possible. If you were unable to start in your 20s though, fret not because you can still start learning even the basic of investing at this age. Don’t miss out by educating yourself about these things so that you can benefit from them as much as you can by the time you retire.
5. Get Insurance
A lot of Pinoys have unconsciously developed a “bahala na” attitude whenever they think of anything undesirable potentially happening to them in the future. However, one of the basic universal truths is that life is unpredictable and anything can happen, so it’s always best to be prepared.
Investing on both a life and a medical insurance as early as possible is recommended so that you can take advantage of lower premiums allowing you to shell less and get the most out of what the insurance plans have to offer. Having both gives you peace of mind knowing that you and your family will be taken care of whatever happens.
6. Pay your Debts
People in their 20s sometimes fall easy prey into acquiring so much debt because they don’t understand the difference between good and bad debts. Many Pinoys tend to borrow money at high-interest rates just to purchase the latest gadgets, which is not a smart decision. Remember that it only makes sense to take out a loan if it’s for a long-term high-value investment.
If you’re approaching 30 and you still have a lot of debts to pay, you need to focus on paying them now and start paying off the ones that have very high interest rates. Being debt free makes saving money and achieving financial goals easier.
7. Use your Credit Card Wisely
Credit cards can be a very useful tool, only if used wisely. The problem is that a lot of people in their 20s get out of control and end up swiping their cards without thinking about how they’re going to pay for their purchases when the bill comes.
If you were one of those people back in your 20s, take charge of your credit cards now that you’re in your 30s. Learn to use it only when absolutely necessary. And no, taking advantage of a 50% off sale in your favorite shop is not an absolute necessity.
8. Save for a Home
Most Pinoys dream of owning a house. If you don’t own one yet, now is the time to make a decision about whether it makes sense to buy one already or just continue renting. It all depends on your financial capacity.
If you still have a lot of debts to pay, then it will be wise settle all of your existing debt before purchasing a property. Just keep in mind that it may take a while to save up for a home, so the sooner you start preparing for it, the better chances you have of getting your dream home.
9. Plan for a Family
If you want to have your own family one day, you have to start planning for it now. Weddings in the Philippines can already cost a fortune depending on how big you want it to be and how many people you decide to invite.
Further down the road, if you decide to have children, you’ll have to consider maternity and birthing expenses, which can already cost up to one hundred thousand pesos in some private hospitals, depending if it’s a normal delivery or caesarian section. After that, you’ll have to think of education expenses too. That means kindergarten to college. You’ll have a lot of preparing to do for this one.
10. Plan for Retirement
A lot of Pinoys leave the responsibility of their retirement in the hands of their children. They expect their children to take care of them when they grow old, sometimes forgetting to think that those children will have their own responsibilities and families to think of too when the time comes.
Instead of doing this, it’s best to start planning for your retirement before you turn 30 so that you’ll have enough money in the future and not have to rely on your children. Putting a small amount each month to your retirement fund will already make a huge difference.
When it comes to making major financial decisions, it pays to prepare early. So, do it in your 30s or earlier. Just in case, you find yourself in need for some short term cash, though, try pawning some of your valuable items with PawnHero.