It is alarming when one turns thirty. At this point we typically enter a new phase of life where one gets married or may be planning to get married. One may have kids or may be planning to have. Of late there is a new trend of owning their dream home. All these events of life are most joyful, important and most celebrated events. Also these are such events which have a great impact on an individual’s personal finance.
Let us take a look at the top 6 key points to keep in mind when we turn 30:
Check if you are adequately and properly covered (Risk Coverage)
To have an adequate risk cover is the most important thing while turning thirty to create a backup for our loved ones’ goals and responsibilities. Most of the times we come across people assume that they have a proper coverage by just having an insurance policy. There are two important aspect in this: One-The coverage may not be sufficient. Two-To see if we have selected the right product. Insurance is an expense and not an investment. Many people consider insurance as an investment and end up buying an endowment or a money back policy rather than going for a term insurance. Adequate insurance should be equal to the corpus requirement of all goals. For example, if your goals re are to buy a home, children’s education Retirement, your Insurance should cover the needs of all 3 goals.
Having an adequate life cover is alone not enough; one should also have a proper medical cover so as to bare the financial implication of medical emergency. In this we see many people consider employee provided cover and think it is sufficient, which is not a good sign. So while turning thirty one should take care of both life and medical cover as growing older it will more costly and complicated.
Create an emergency fund
Turning Thirty we see individuals taking up responsibilities be it marriage, kids or a home. When we have serious responsibilities one should definitely have an emergency fund which will take care of your regular financial needs in case, there is gap or loss of income due to any reason. We see most of the people using the amount that they have saved for one or the other goals in case of emergencies. This will have an impact during that specific goal attainment time. Creating a separate emergency fund which will be equivalent to the committed expenses of three to six months is advised.
Did you plan for your retirement?
Planning for retirement at thirties has a greater contribution of compounding. While giving more importance to life’s goals like children’s education, their marriage or buying our first house, you should not leave retirement planning behind. It takes years of systematic saving to accumulate the required corpus for post-retirement phase. Also starting early will give you the benefit of compounding. While turning thirty, planning for retirement should be in the checklist.
To get married is the most joyful thing in life. This is the stage that bachelorhood ends and the beginning of a new life where the newly wedded couples share love and joy. Finance has a great role to play when it comes to family life and there are certain important things a newly married couple should consider. Look beyond the shopping and arrangements required for the ceremony and plan your personal finances in advance.
Future planning for Children
To become a parent is the most celebrated event in one’s life. At the same time being able to give the best future would be on the top of wish list. For anyone to do so, a wish only would not serve the purpose, rather a proper planning and discipline in executing the plan is most important. In general while planning for your child’s future the two major events that one should consider are higher education and marriage. Both the events incur high costs and at the same time those are the events that one would not like to compromise. Starting this at thirties will have a value addition of compounding too.
Buying a home
Of late there is a new trend of owning their dream home at thirty and also a question whether to buy or to rent? Buying a home is a dream comes true, because this dream is as old as civilization itself. However owning a house and still maintaining a simple debt-free life is a complex issue. This important milestone in the life of a family or an individual poses many questions and riddles which can be addressed by analyzing your financial state, for which you can seek the help of a professional financial advisor.
On turning or at thirty years of age, we enter a new phase of life with new challenges, responsibilities and all together a new way of life. This new way of life has a great impact on an individual’s personal finance. Considering this big impact one should properly focus on taking charge of their personal finance so as to have a smooth sailing ahead. Considering these multiple goals and limited resources one should take the help of a professional financial advisor to align their finances.