When one steps into their 30s, they become more judicious about their spending and savings. After all, it’s not a choice but a necessity with the added responsibility of a possible family.So if you are wondering where to invest money, you must have a financial plan in place. This article aims to provide financial planning tips for individuals entering their 30s or already in their 30s.
- Ensure that your emergency funds is in place
This pandemic and the subsequent economic slow down should be an eye-opener for individuals with no possession of emergency funds. Emergency funds help an investor to cope with unforeseen circumstances and life-threatening situations. As a thumb rule of investing, it is advised to invest at least three to six months of your living expenses. You might consider investing in investment options that have high liquidity while offering returns that tend to beat the inflation.
- Have a life insurance
Owning a life insurance is a smart decision when you have dependents. This will ensure that the financial needs of your loved ones are met in the future, specially when you are not around. Investing in a good insurance plan not only offers life coverage to investor, but also other benefits such as tax saving advantages. Choose a life insurance premium that is enough to meet your family’s current standards of living.
- Don’t forget to plan your retirement
Though experts recommend planning for your retirement the day you receive your first paycheck, if you haven’t done it yet, it’s not too late. To ensure that you live your golden era stress-free, ensure that you have enough funds for your post retirement. There are different types of investment that can cater to your retirement building corpus, such as National Pension Scheme (NPS), ELSS (Equity-Linked Savings Scheme), Post Office Monthly Income Schemes (POMIS), Senior Citizen Savings Scheme (SCSS), etc.
- Don’t forget to consider important financial goals such as child’s education and marriage
Two of the biggest expenses for a parent is bearing cost of their child’s higher education and marriage. So, make sure that you invest for these big-ticket investments well in advance.Pre-planning and investing will ensure that you save enough to meet these important financial goals. You may make a lumpsum investment or an SIP investment depending on your risk profile, investment horizon, and the availability of funds.
- Remember to diversify your investments
As it is not advised to keep all your eggs in one basket, the same is true for mutual fund investments, as well. Experts advise investors to diversify their investments as it helps to spread risks across different types of investments. You can diversify your portfolio across different types of investments such as mutual funds, ETFs (Exchange-traded funds), stocks, etc.
It is very important to plan your investments carefully to protect you and your family. Your investments should align with your financial goals, risk profile, investment horizon, and other factors. Make sure to review your financial plan annually and make any changes, if required. Happy investing!
Byron Simpson is a qualified business/finance writer expert in investment, debt, credit cards, Passive income, financial updates. He advises in his blog finance cent.