Are you ready to take charge of your finances? Now that you're in your 30s, it's time to stop mindless spending and make smarter choices. You can become financially stable no matter how much you get on your paycheck. These seven money lessons will change your outlook for the better.
1. Learn more about your finances.
As they say, knowledge is power, so if you haven't already started, read up and find out more about handling your finances. Want to learn about the stock market? There are plenty of free seminars available that can help you. Just make sure you attend one from a reputable company. You can start with The Philippine Stock Exchange’s free Stocks 101 seminar, which they hold bi-monthly. All you have to do is sign up online for a slot at www.pseacademy.com.ph.
2. Get insurance.
It’s ideal to invest in insurance in your 20s when you’re still young and healthy (it also costs you less). When you hit your 30s and are earning more, it’s time to reassess your coverage. Is the value of your insurance enough to cover you and your dependents, or should you top up? Put life insurance and health insurance at the top of your list. The former will ensure your loved ones will have a fallback should something happen to you, while the latter will minimize expenses should you or your family members get sick, especially with a serious illness.
3. Pay off your debts.
There is such a thing as good and bad debt. Good debts are those you put into buying assets that will gain value over time such as real estate or stocks and bonds. Bad debts are those you put into assets that lose value over time such as charging a big amount on your credit card with a high interest rate. No matter what kind of debts you have, though, it’s important that you have the means to pay for them. A common baseline is that only 20 percent of your annual income should go into paying for your debts.
4. Start a retirement fund.
You're never too young to think about your retirement. You might think you're capable of living paycheck to paycheck, but you won't always have a job with a steady pay nor will you always have the means to pay for a loan. Your 30s is the perfect time to increase the portion of your money you set aside for your retirement. The key is to keep your saving constant and consistent, then increase it over time. The earlier you begin, the more you'll have saved by the time you retire.
5. Have an emergency fund.
A lot of people get their life savings drained when the unexpected happens like getting laid off or having a family member fall sick. To make sure you won't drain all your resources when situations like this arise, it's important to keep a separate emergency fund that you increase steadily. Treat this fund as untouchable; that is, it should not be used to pay for day-to-day expenses.
6. Live within your means for more savings.
You might notice that as your salary gets bigger, you also end up having more expenses. You might find yourself making unnecessary purchases, but indulging these wants will only hurt you in the long run. Of course, you deserve to spend your hard-earned money to treat yourself. Just make sure that you do so within your means.
7. Make yourself your biggest investment.
Your 30s is the prime time to upgrade your skills and hone yourself into a more valuable employee. Invest in training and learning so that you can keep up with the trends, raise your market value, and pave the way to a better and more financially rewarding job. Also, this way, if you unexpectedly find yourself jobless, you will have everything you need to back you up when you go combing the job market.