How to Manage Money in Your 30s

Your 30s is perhaps the best time of your life to think seriously about your retirement goals along with repayment of college funds and down payments.

The 30s can be quite an exciting time of your life. It can be even your best decade ever. This is the time when you are advancing in your career and are starting to reach your income goals. However, it is also the time when you have new financial responsibilities, children, buying a new home, etc.

Of course, building a budget is essential. But that is not all. People in their 30s need to take extra steps to successfully manage their money.

1. Open a savings account: If you have not opened a savings account yet, now is a good time to do it. In fact, this is not something you would want to delay. The sooner you start saving, the easier it shall be when you retire.
   Savings account is only one of the several ways to save up. Another good option is your company’s Employee Provident Fund. Contribute to it as much as you can. Your company shall possibly match your contributions or give a certain percentage of it. At the end of the day, all this is free money! So why not take its benefits?
   When you get increments or raise, increase your contributions by 10% to 15%. Again, you are saving all this for your retirement, so that you won’t have to scrounge for money after your retirement.

2. Make your financial priorities concrete: Your spending patterns in your 30s won’t be the same as in your 20s. For one, your focus now is saving for retirement, disability, LIC, and the like. Never thought about all this in your 20s, did you? That is why you need to make some changes now! Apart from paying more attention to your retirement savings, you need to keep track of your spending.
   
   It is very easy, and may even seem natural, to spend more when you are earning more. But that’s not right. What you need to do is to have a budget model. To be really effective, take the 50/30/20 budget model. Under this model, from your yearly or monthly take-home income, give 50% towards meeting needs, 30% towards wants, and the remaining 20% on savings and debt repayments.
   If you are having problems with this, it is never wrong or late to take the help of a professional certified financial planner.
   Now that you know about the 50/30/20 budget and know how important it is to budget and save up for different things, it is important to know about saving for emergencies. To save for the future should be your top priority. This does not just mean your retirement fund, but your emergency fund too. Take this Covid-19 pandemic and lockdown for example. No one planned for this financially nor expected it. This is why finances of both companies as well as individuals are in shambles. Situations like this tell us that it is so important to save up for meeting any emergency situation.

3. Get LIC and disability insurance: Remember where to put the 20% of your yearly or monthly income? In savings, right? Good. Well, here are two important places where to park your savings for the future. And look, having LIC and disability insurance is important. No one wants to plan or even think about facing the worst-case scenarios in their lives. However, if you do plan for it, it makes your life easier. This is when you need insurance.
   Disability insurance helps you when you get career-threatening injuries and disabilities. Nowadays, people are actively insuring things which they feel are central to earning a paycheck. For instance, people who spend most of the day in front of their computer insure their eyesight. So in case they do lose their eyesight, they’ll get a lump sum or monthly coverage from the insurance company. Some companies give disability insurance too. 

At the end of the day, evaluate the state of your current income and expenses. Create financial goals based on that. Furthermore, buy only those things which you can budget for. Don’t overstretch your income to feed your expenses.