At every age, your priorities will change. As you turn 30, your financial priorities will differ from those turning 20 or 50. At this point in your life, you will likely be focusing on many transitional elements and planning as much as you can for the future.
A mix of career stability, increased income potential, and a growing sense of responsibility will shape the financial landscape in your thirties. This is the opportune moment to anchor your financial future by setting smart and strategic goals to help you build and protect your wealth.
This article will discuss seven financial goals those turning 30 should set for themselves.
As you turn 30, investing will be a pivotal piece of your whole financial strategy. Given its benefit of compounding returns over time, it's essential to start investing now if you haven't already or consider increasing the portion of your income you invest.
Whether you need money for a house down payment, your children's education, or your retirement, saving alone isn't enough. Investing is key to achieving your goals faster and protecting yourself from inflation.
Investing can be a challenging endeavour. One way to be successful at it is to build a portfolio that aligns with your financial goals, risk tolerance, time horizon, and financial situation.
A well-thought-out investment portfolio encourages a disciplined, patient approach, often essential for enduring short-term market fluctuations and capturing long-term growth opportunities. It also plays a significant role in achieving financial goals, managing risk, diversification, wealth accumulation, and adaptability through asset allocation.
As you approach your mid-career in your 30s, with a solid income and relative stability, it is time to explore homeownership as you probably do not plan to rent forever.
Homeownership as an investment can help you build wealth over time as you gain equity and your property increases in value, give you access to credit, save you money when your landlord hikes rent, and ultimately improve your financial stability.
One important factor you need to decide early on is the route you will take to own a house. Will you take a mortgage? Or will you save more and buy a house in cash? Will you buy an apartment in the city or construct a solid mansion back in your hometown? Are you better off saving and investing money, buying land, and constructing your dream house when you retire?
Once you've explored all the homeownership options and decided on a path, you can redo your financial plan to align with them. For instance, if you choose to take a mortgage, one of your main goals will be to build a strong credit score.
If you have a HELB loan or have accumulated some consumer debt in your 20s, you should prioritise paying it off.
A perfect way to achieve this is by creating a debt repayment plan that provides a structured and organised way to tackle your loans. It can help you prioritise and allocate your resources effectively, making it easier to manage multiple debts
Timely and consistent debt repayments positively impact your credit score. A higher credit score can lead to better borrowing terms and increased financial opportunities in the future, especially when it comes to qualifying for good debt in your 30s.
Good debt refers to borrowed money used for investments that have the potential to increase in value over time or provide long-term benefits. Examples include mortgage and business loans.
A debt repayment plan will also help you avoid bad debts, which are incurred for non-essential or depreciating items and have the potential to hinder your financial growth.
In your previous decade, when you were starting your career, it was a hard decision to prioritise putting money towards retirement versus other financial goals like building an emergency fund and furnishing your apartment.
As you turn 30, your retirement account is where you should look next to put your money now, especially if NSSF contributions are all you have to show for retirement planning.
To build a solid plan, you need to start by visualising your ideal retirement lifestyle. Think about the age at which you want to retire, how and where you want to retire and all expected expenses. This will help you establish clear goals and will assist you in calculating the financial requirements necessary to maintain your preferred lifestyle in retirement.
Remember to take into account factors like inflation, healthcare costs, and any existing financial commitments. Lastly, consider how you will generate passive income in retirement. You can do this by building a portfolio of income-generating investments and starting a business that will outlive you.
Read Also: How to Plan for Retirement While in Your 30s
In your 20s, you were so focused on growing your career, and the option of having multiple income streams, starting a small business, and utilising your skills well may have been out of reach. Now that you’re in your 30s, you ideally have a steadier job, enough experience, and room for financial and professional growth.
You can use your newfound flexibility to diversify and increase your income. Having multiple sources of income will bring in extra money for you and your family and can help you grow your savings, improve cash flow, and leave you with more disposable funds to invest
Passive income streams will help you generate additional revenue without much extra work added to your day-to-day routine or jeopardising your career. Depending on your unique situation, this could be freelancing, consulting, monetising a hobby, and investing.
Finally, you should consider safeguarding your income by taking out income protection insurance policies to ensure your continued financial stability.
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Improving your employability is a key factor in propelling your career forward. Your current job might be fulfilling, but the career landscape is dynamic, and your aspirations may evolve.
Whether you aspire for a promotion within your current company or envisage a different professional path, investing in yourself is a strategic move that pays in the long run.
Use some of your hard-earned money to advance your education, upskill, and acquire industry certifications. This will make you a more valuable asset in a job market that favours those with a diverse skill set and a commitment to ongoing learning.
As you turn 30, consider mapping out a professional development plan. Identify areas where you can improve your skills, whether through formal education, workshops, or industry-recognized certifications. This could involve pursuing an advanced degree, attending relevant conferences, or obtaining certifications that align with your career goals.
Contrary to popular belief, estate planning isn't reserved for the wealthy elite and senior citizens. It's a vital step for anyone who wants control over their financial and healthcare decisions, especially when life takes unexpected turns.
Even at 30, you should proactively engage in estate planning to ensure your wishes are honoured in case you cannot make decisions for yourself. To that effect, here are three essential documents to kickstart your estate plan:
Turning 30 marks the commencement of your prime financial years, a phase where your decisions can profoundly impact your long-term economic well-being. As you navigate this phase, stay committed to making choices that align with your financial objectives and contribute to your overall well-being.
Consider this a pivotal moment to evaluate your financial landscape, assess your priorities, and chart a course toward achieving your aspirations. Your 30s offer a unique opportunity to capitalize on your earning potential, accumulate wealth, and establish healthy financial habits. But all this can only be achieved by being proactive, setting goals, and committing yourself to them.