Rat Race Running

Our 30s is a crucial period in our life, particularly our finances because it will set up the next decades of our lives.

However, our 30s can be a great time if we have prepared for it in our 20s, or it can be a decade of crawling out of the hole we put ourselves in.

But never think that it’s over. You still have time. However, unlike in our 20s, when we can make our mistakes more freely, our 30s are a little more important since our health will also enter the picture.

Here are seven financial moves in our 30s, especially if you missed it in your 20s.

1. Pay Off All Your Incurred Debts.

Many young people enjoy their 20s by exploring their new sense of independence and trying to be an adult by spending more money than they have.

So, if you entered your 30s without any debt, great job! However, if you’re entering the next decade deep in debt, you should start thinking about your future and avoid more loans.

You should also refrain from using credit cards if you are prone to overusing them or have existing consumer debt.

Being debt-free is one of Dave Ramsey’s 7 Baby Steps, and puts clear emphasis on it because our choices are limited if we’re in debt. 

Being debt-free also gives us the mental peace of not looking over our shoulders for our creditors.

2. Recalibrate Your Emergency Fund

An emergency fund is a crucial part of everyone’s financial journey because it gives us a bit of peace that we are prepared for uncertainties with our finances.

If you’re in your 30s and have a functional emergency fund, then you have to tap yourself on the back because that is an important personal finance milestone.

But if you’re in your 30s and still don’t have an emergency fund, you either don’t earn enough or didn’t build good money habits in your 20s.

If you’re starting to build your emergency fund, I suggest saving at least P10,000 as your starter emergency fund.

Then as you build your confidence and saving habit, continue to allocate your emergency fund until you reach an amount of around 6-12 months of expenses.

However, since you are more likely to have more expenses now than in your 20s, you must recalibrate how much emergency funds you need.

3. Increase Your Retirement Investment.

Retiring early is on many people’s minds and dreams, but sad to say, it will never happen for most of them.

The problem here is when investing for your retirement, you should have a plan with an end in mind. Remember that failing to plan is planning to fail.

But don’t worry. You still have time to start building a retirement fund. You can choose a long-term investment strategy depending on your risk appetite and the amount available.

Personally, I prefer dividend stocks, while also diversifying on other investment vehicles, like MP2 and real estate.

So if you’re planning on building your retirement fund, the first thing you need to consider is your retirement target amount and age of retirement. Also, include other considerations, especially your family and career.

4. Invest In Your Health

If you’re also in your 30s, you know you’re slower than before, not as athletic as before, and you may also gain more weight than in your 20s.

However, if we want to live a long life, there is still time to change our unhealthy habits. Remember that what we put in our bodies eventually accumulates as we grow older.

So, start avoiding unhealthy food, being a little more active again, and getting an HMO and health insurance (if you don’t have one) while it’s still cheaper.

5. Prepare For Big-Ticket Item Purchases.

Big-ticket items are usually the purchases we plan on buying and paying for longer, like a house and a car. 

So, if you start a family and decide to buy a house or a car, your credit history will be a huge factor, so it is better to check and rectify any. 

It will also help if you follow the hierarchy of a strong financial foundation by paying your debts (if any), getting insurance, and saving up for an emergency fund.

The problem with people buying big-ticket items is that they arrange their priorities backward. They will start buying a house and a car through loans, even when they are already in debt and don’t have an emergency fund.

Ideally, a big-ticket item purchase should be paid with a minimum loan amount so that you will not pay too much interest.

6. Reevaluate Your Insurance Coverage

One of the biggest misconceptions of people regarding insurance, particularly with VUL, is that it is often advertised as an investment product.

Though there is some truth in it, an insurance plan is for your family if you are taken out of the picture early. An insurance plan assumes that the beneficiary is your family, not you!

During our 30s, our lifestyle may have drastically increased than when we are starting in our 20s. Even more, it is crucial for people with dependents.

So, it is best to recalibrate your insurance coverage in your 30s while you are still insurable and the premium is still relatively cheaper. Don’t wait for your 40s before you get insured.

Remember, your insurance is not for you. It is for your dependents. Just be careful when choosing your insurance agents.

7. Start Investing In Your Child’s College Fund

Obviously, this is for people with children, pets not included.

During their 30s, couples normally start getting serious about starting their own family. So, if you’re a parent thinking about their future, start investing now when you don’t need it yet.

Assuming that the purpose of college education remains the same in the next 15 to 20 years, the cost of sending them to school is also expected to increase.

You can start investing in your child’s education for the next 15 years so that you will not have a hard time when you finally need it.

On the other hand, if the education route fails to deliver in the next decades or your child doesn’t want to pursue a degree, you can add your college fund to your retirement.

Final Thought:

Our 30s is a crucial period of our adult life because, at this point, we are already accustomed to adult life and more mature than in our 20s.

This is also the best time to utilize our energy in valuable activities and ensure that we are moving one step closer to our goal.

However, if you feel like you’re struggling or being too late compared to others, don’t lose hope. You still have time.

God bless you on your journey!