Financial success doesn’t come overnight. It needs time, proper planning, timely execution of plans, monitoring and the most important one correct knowledge and strategy.
We have often heard – age is just a number! But when it comes to managing your finances, age really counts. Each decade of your life offers new opportunities to help you achieve financial success. With the growing age, your 30s & 40s can turn into a juggling act.
Your 30s and 40s includes so many things which you have not thought of in your 20s. Having children and saving for their education, having an own home and paying off the mortgage, saving for retirement, and even caring for your old parents – All these require lots of financial planning and income as well.
All these sounds a bit scary and you must be thinking that how you will be able to do this all. Don’t worry, we are here with tips to manage your finances in your 30s and 40s which can give you a wonderful financial future ahead.
Pay off Your High-interest Debt(s) First
Late 30s or early 40s, it is that stage of life where most of us have some or the other debt. It may be from your from credit cards, a car loan or a mortgage that you took to buy your home.
The first step is to have a secure and worry-free financial future starts with paying off your high-interest debt as soon as possible.
One way to do this is by saving money from your 20s or early 30s so that you can clear your high-interest debt with that. And the second option is debt consolidation, this combines your multiple debts into one, and instead of paying multiple EMI’s you need to pay only one at less interest as compared to the one which you were paying for your multiple loans.
Paying your high-interest saves lots of money which you would have paid on the interest.
Don’t Forget to Plan for Your Retirement
In your 30s and 40s, you may feel that you are long away from retirement, but do you seriously feel that you have enough time left to plan for that future where you will be left with minimal income.
If not planned in advance and properly things may go even worse once you turn 60.
Financial planners always recommend to increase your contribution towards your retirement account with your increasing age and income. rather than allowing them to become absorbed into your regular income. Once you have more money in hand, you start spending more on your comforts. But, your retirement planning is such a thing that you can’t afford to ignore. Your 30s and 40s is that stage of your life when you are in the middle of your career as feel, you have started earning more. Hence, this is the perfect time when you should start thinking and planning for your retirement. Increase your contribution towards your PF account, open PPF account with some banks, you can also opt for a post office scheme to save for your requirement.
Build-up an Emergency Fund
Emergency funds are essential to have in every stage of life. The future is unpredictable and in case of any emergency, your emergency savings will be the only one to help you.
Hence it is always a good idea to build up an emergency fund savings account. Contributing a huge monthly is even not required for this, just a few thousand a month and you can have the cover. This can be used when someone in the family falls sick, when your car needs fixing or when there is some other unalarmed financial requirement.
Insurances are those financial tools that provide cover not only to you but to your family members as well. There are different kinds of insurance available nowadays. From life insurance to car insurance, and from car insurance to home and health insurance.
Bening in 30s or 40s is that stage of life where you should definitely have insured yourself and your family. It is not only a cover but insurances like life insurance and term insurance are among those which is an investment, as it pays you back in future.
Here are some common types of insurance:
- Life, health and disability insurance,
- Car insurance,
- Home insurance,
- Flood insurance and natural disaster insurance.
Have some Investment
Investment is something that pays you back in the future, it can be mutual funds, post office schemes, real estate, FDs and RDs.
All these required some fixed amount as your monthly or quarterly contribution and pays you back after a fixed period along with some interest. Investing in any of these in your 30s & 40s can pay you much more after your retirement.
Your 30s and 40s can be a wonderful time of life when your family grows along with your income. Hence, having a proper plan and financial goals set in your 30s and 40s can make you enjoy a worry-free and wonderful future.