Once you have gotten through your party years in your 20’s and you get to your 30’s, things start to change financially. You start thinking more about where your life is heading and endeavor to make changes in your life to set yourself up for the years to come. You focus on your finances more and start setting goals for the future whether it’s buying your first home or preparing to start a family. It can get overwhelming thinking about all the things you want to achieve in life and how much money it costs to do these things, especially if you feel your finances aren’t quite under control. Learning how to manage your finances will help you avoid making money mistakes at this point in your life.
Things to do to keep your finances in check for the future:
1. Have a financial plan and budget in place:
Make sure you have financial goals and plans in place to prepare for the years to come and in case anything unexpected arises. Whether it’s preparing for mortgage repayments or having children, it’s very important to know where your finances are and set short term and long term goals. Also, having more than one source of income can make things easier later on. Whether it’s a second job or an investment property, this second income can ensure you don’t struggle financially and help you retire sooner. Make sure to also create a budget and stick to it. Sticking to your planned budget can prevent you going into debt and help you to reach your goals.
2. Don’t buy things you can’t afford:
Making large purchases like a house or a new car to small purchases like clothing or electronic items, can impact on your finances in the long run and put you in more debt than what you expected. It can seem like a good idea at the time to purchase something but make sure you can afford to purchase those items first. For example, taking out a new loan to upgrade your car will result in larger repayments. It will also lose its value in the years to follow, as cars tend to depreciate once you drive them away from the dealership. Thinking your credit cards are a good way to purchase smaller items can be a bad idea. Constantly using your credit card will result in continuously paying interest which is something you wouldn’t have to do if you save for the items first. If you can’t save for an item and need to use your credit card then ensure you have the means to pay the money back as soon as possible.
3. Put money into savings and keep on top of your super:
Put money into savings and if possible, make extra payments into your superannuation to prepare for when you retire or if you need to access emergency funds. It may seem like retirement is a long way away but it will creep up on you and you don’t want to be stuck working late in life or not have enough money to live when you retire.
4. Insurance and wills:
A lot of people don’t have insurance or are unaware of insurance products and how beneficial they are. Having a good health insurance and life insurance policy will help you and your family when you have unexpected health issues.
5. Plan to purchase a house:
If you purchase a house when you are in your 30’s you are more likely to be able to have that mortgage paid off by the time you finish working. If you wait too long to purchase a house it may get difficult in your older years to finish paying it off or you may need to keep working for longer. For a mortgage the average loan term is 25–30 years.
Your 30’s are the perfect time to start thinking about the future and focus on setting yourself up to be in a good financial position for when you retire. Take control of your finances now and you will not regret it in the long run.