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It is never too early to start improving your personal finances.
There are some financial lessons that you should definitely learn in your 30s.
Budgeting, realistic goals, and debt control are keys to securing your finances.
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It takes a lot of time and discipline to understand how to use money wisely. It doesn’t work overnight – some don’t even learn it properly all their lives.
At 30, you may still feel young and invincible, but the truth is, you’re almost halfway to retirement. The sooner you learn to use your money, the better you will be in the long run.
Here are the most important financial lessons you will need in your 30s.
1. Stick to a budget
Most 20-year-olds toy with the idea of creating a budget or use an app to keep track of their finances. However, very few are able to stick to a budget. When you turn 30, it’s time to start thinking about where every euro you earn goes to.
The overall goal of budgeting is to know where your money is going so that you can make the right decisions. Remember that expenses add up over time. It’s okay to spend money on leisure activities or travel as long as it is in line with your budget and savings goals.
2. Save ten to 20 percent of your income
This is another piece of advice to keep in your 30s and recommended by most financial planners.
As you get your monthly salary, you should know what to spend on fixed expenses, variable expenses, and ultimately savings. It is always advisable to set aside 20 percent of the money that goes into your checking account each month. If you have a lower income, you should set aside 10 percent instead.
3. Be realistic about your financial goals
Take your time and really think about your financial goals. Imagine the age at which you would like to achieve these goals. Write them down and think about how you can make them come true. With a precise plan, you are more likely to actually achieve your goals.
For example, if you want to go to New York on vacation, stop dreaming and make a plan. Research how much the vacation will cost and work out how much money you will have to save each month. Your dream vacation can become a reality in a year or two if you plan properly and save.
4. Determine your debt situation
Many people get complacent about their debt by the time they hit 30. For those with personal loans, mortgages, or credit card debt, paying off debts is becoming a perfectly normal way of life – they may even consider debt to be normal.
The truth is, you don’t have to spend your entire life paying off your debt. Check how much leeway you have beyond your mortgage and create a budget that will help you stay out of debt.
There are many methods of reducing debt, but the snowball effect is a popular means of maintaining motivation. List all of your debts, from smallest to largest, regardless of the interest rate. Pay the minimum installments on all of your debts except the smallest. When you pay off your debts, it has a huge impact on your personal finances. So you can stretch your budget further and increase your savings.
5. Creates an emergency fund
If you don’t have an emergency fund, you’ll have to draw on your savings or rely on credit cards to pay for unplanned expenses. Plan a sufficient amount of capital to be prepared for any eventuality.
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