Managing Money in Your 30’s

Managing Money in Your 30’s: What You Need to Know

In your 20’s you took risks and probably got away with it (thanks, on occasion, to mom and dad). You lived your life, perhaps without medical, car, or home insurance and found a way to make it work. Now that you’re in your 30’s, there are no more excuses. It’s time to “adult”, which means you need to put plans in place in case the unplanned happens. With nicer things, a more expensive car, a home, and (possibly) dependents to protect, insurance becomes exceptionally important. It just takes one bad accident to deliver a potentially fatal blow to your finances and leave your family in serious trouble so make sure your car, home, health, and life are covered.

Give Non-Mortgage Debt the Boot

In our 20’s we discovered the joy of credit cards, which, in spite of being buried under tons of student debt, we used a little too freely. Now that you’re in your 30’s, it’s time to get serious about shaking off the debt because those exorbitant interest rates it comes hand-in-hand with are a gratuitous waste of money. Spend this decade focusing intensely upon paying off non-mortgage debt so that you can enter your forties free from the financial burden of your past.

Establish an Emergency Fund

With a greater income, you should concentrate on setting yourself up a little better in case of emergency. The goal is to have enough cash to maintain your standard of living for between three and six months in the event that you lose your job or are injured and cannot work. And remember, saving is about more than shoving extra cash into some low-interest bank account: put your savings to work by investing it and benefit from much greater compound interest rates!

Think About Investing

Speaking of investing, your 30’s are the perfect time to allocate a portion of your savings to an investment that’s going to turn R10 into R20. At this stage, you should have the basics squared away (insurance, retirement plan, emergency fund), so you have the elbow room to take on a little more risk (and reward!) Consult with an investment/financial manager to discuss how you can get involved in the world of stocks and bonds and at a level of risk you’re financially prepared to take on board.

Write Your Will

Unless you want a complete stranger deciding how to allocate your wealth and care for your children’s future, it’s time to write your Last Will and Testament. You may be young and healthy but life is tenuous and you never know when you’re going to exit this mortal coil. Your will is the last conversation you’ll have with the people you leave behind and it will instruct them as to how you wish your wealth to be distributed among the people you love. This is absolutely essential if you have a family and could prove critical to their well-being. Other documents, such as a release-of-information form, a living will, and power of attorney, are also essential to sort out.