8 Top Personal Finance Tips for Your 30s
For many people I meet, when they turn 30 they start to think about their finances seriously. Reflecting back on their 20’s, they fondly remember the good times, the travel, the new friendships and the many positive memories. In most cases turning 30 is the time you start taking your financial affairs seriously and start saving and investing for the financial future of yourself and your family.
Don’t worry, you are certainly not alone. The earlier you start reviewing your finances and putting plans in place the better off you will be. To help you start this journey, I have outlined below my top 8 personal finance tips for your 30s.
1. Set up an Education Savings Vehicle
If you are planning or already have a child or children it is important that you set up a vehicle to allow you to save regularly for their education costs. With school costs continuing to rise around the globe, this allows you to avoid, or at least reduce, any surprise bills from school. Rather than directing these savings straight into a bank account earning low interest (particularly in Singapore), you can set up a diversified investment portfolio to earn higher compounding growth on your savings.
2. Explore Retirement Benefits Offered by Your Employer
Many employers across the globe offer retirement benefits such as matching contributions to an eligible retirement scheme. For example, your employer may offer you a matching contribution of dollar-for-dollar up to 5% of your salary. This means that for every dollar you contribute, you are instantly doubling it before it is even invested. This is FREE money – no tricks, no smoke and mirrors. Yes, you have to wait until retirement in most cases to access this free money but it is still FREE. If 5% is too much for you to contribute after your mandatory superannuation/pension/CPF contributions then calculate how much you can afford and explore what costs you may be able to reduce. Perhaps one partner can cover other costs and the partner with the attractive retirement benefits can take advantage of them. Unfortunately, many employees fail to take advantage of these opportunities. Ask your HR Department today about what’s on offer.
3. Protect Your Loved Ones
If you are married and/or have children, it is important that you have adequate protection in place in the form of Insurance. This includes Life Insurance, Critical Illness and Permanent & Total Disability Cover. Review your current level of cover and ensure that it’s enough should anything happen to either of you. Would your surviving partner have to relocate? Stop working? Work less? Consider the scenarios that would likely play out. Click here to use our online life insurance calculator to get an idea of how much insurance you should have in place.
4. Prepare or Update Your Will
For many people, their late 20’s and early 30’s are the time for getting married and having children. Given these substantial changes in your life it is important to ensure that you have an updated Will in place should anything happen to you. You should also look at putting in place documents to arrange Powers of Attorney. Who will look after your children should something happen to you? If you are an expat this can be particularly important to ensure a Temporary Guardian is nominated to get the children to their Permanent Guardian, particularly if this is overseas.
5. Crunch the Retirement Numbers Together
Many people make the mistake of assuming that their mandatory pension/superannuation contributions will be sufficient to sustain their desired lifestyle in retirement and/or simply underestimate how much they will need. It is important that you crunch the numbers and work out exactly how much you would have at your planned retirement age if you continued to save at your current level. Do you need to increase your savings? Click here to use our series of online retirement calculators to determine how much you should be saving for your retirement and how far away you are from achieving your financial goals.
6. Clear Those ‘Bad’ Debts
You may have heard of the terms, ‘good debt’ and ‘bad debt’ – well, it is important that you continue to clean out the ‘bad debt’ as you did in your 20’s. Good debt is investment debt whereas Bad debt refers to such items as high-interest credit cards, merchant loan accounts or any other costly debts. Clear these quickly so that you can focus on saving and investment to achieve your financial goals.
7. Raise the ‘Emergency Fund’ Balance
In many cases, now that you are in your thirties, the ‘emergency fund’ is now in place to cover more people and potentially larger expenses. Increase the balance by continuing to make regular deposits and ensure it is a sufficient amount.
8. Stay Informed Financially
From Ponzi schemes to unlicensed agents, it is important that you stay informed financially to ensure that you make informed financial decisions and avoid the pitfalls. At the very least, ensure that you have a financial adviser you trust in your network who can guide you and help you to make the right decisions financially. Some key strategies to stay informed are to follow bloggers you find worth reading, attend seminars, employ a professional Adviser who will educate you along the way, as well as reading financial books and publications.
Have a question or a tip you would like to add to our list of personal finance tips for your 30s? – Let us know by commenting below or send me an email to firstname.lastname@example.org
Remember – ‘Life is Long – PLAN For It’
Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Adviser with Australian Expatriate Group of Global Financial Consultants providing specialist financial advice and portfolio management services to international and local professionals in Singapore.
To discuss how these personally finance matters could impact you, click here to book in a complimentary, obligation-free meeting with me: Book Your Meeting Here
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