Financial Planning Tips for people in 30s

From financial planning perspective it is a golden period for who are in their late 20s and 30s to plan and achieve what they dream of.

In 30s and 40s you should focus on building a base level financial security and moving along in terms of career. These are important financial planning years and you can benefit from solid financial planning advice.

By the time you reach 30s it's time to get down to business with your financial plan if you haven’t done so already.

The most basic financial step is to get spending under control. It is always best to live below one’s means. This allows for saving for retirement, car, kids education, a home and all of the other things you eventually want out of life.

Address excessive debt as soon as possible. This could be any outstanding education loan, personal loans or credit card debt—get what you can paid off and develop a payment plan for the rest.

BUILDING A SOLID FINANCIAL PLAN

Ideally, you should be thinking in terms of having a comprehensive financial plan done by a fee-only financial advisor. This is not about succumbing to an advisor out to sell expensive or unnecessary financial products, but rather about getting objective financial planning suggestions with as few conflicts of interest as possible.

You are moving forward in your career, buying home, starting business, getting married, having children and a whole bunch of other grown-up things. Financial success can involve juggling a lot of balls in the air. A qualified financial planner can help in providing a financial road map.

CONTINGENCY FUND

You should create a contingency fund which can take care of your expenses in case of a job loss or any medical emergency.

INSURANCE

Life insurance is the most critical part of financial planning. Every individual who have dependents and loans to be paid, should need to have sufficient insurance coverage which can take care of family's future in case of premature death of earning member.

Together with sufficient life cover ensure you have taken Medical and Disability insurance if not provided by employer. The rising medical cost can disturb all your future goals and present lifestyle.

EXPLORE INVESTING I/o SAVINGS

In present low interest and high inflationery period when real return post taxation is negative. It is always advisable to consider investing in equities in systematic way. In long term it can give you good real return. 

SAVING FOR RETIREMENT

If you are employed automatically you have starts contributing to EPF. But in present high inflationary environment only EPF corpus will not be sufficient to take care of retire years.So, by the time you reach in mid 30s you are likely to be more established in careers, which means salting away money for retirement and other financial goals. This is a great time to do some retirement projections and planning.

A financial plan and retirement projections should be a must at this stage of life. Are you on track towards accumulating what you will need for retirement? Do you need to save more? In 40s there is still time to close any gaps. A detailed retirement savings and investment strategy should be key outgrowths of the financial planning process discussed above.

THE BOTTOM LINE

In 30s you need to focus on financial planning. Retirement is still a bit far off, but not as far off as it used to be. Retirement savings should be a priority. For those who are married and have kids, protecting their loved ones in the case of death or disability should also be a priority.