Thinking about personal finance and finding the best investment options for you can be stressful, especially when you start getting closer to your thirties. But as they say, getting your finances sorted today guarantees a relaxed tomorrow. So, although thinking about your financial goals isn’t something you would be particularly fond of doing on your 30th birthday, it is worth it in the future and takes a lot of stress off of you.
Becoming good at personal finance is a game of planning and practice – which you won’t have a lifetime to do. Hitting your thirties doesn’t mean you are old, but if you think about it, it’s halfway to retirement, that is if you don’t plan to retire earlier. According to research, those reporting poor health skewed toward early retirement: 5.6% reported that they had retired early or planned to retire early due to COVID-19 and 0.6% reported that they had delayed or planned to delay retirement.
So, let’s get into financial goals to check off your list.
1. Saving Money
Source: ukrgate.com
For some people having some money saved at the age of 30 is a no-brainer but for some, it is not something they think about. By the age of thirty, it’s smart to have some savings like emergency funds, savings for important purchases, holiday funds, etc.… living paycheck by paycheck will cost you later, even if it seems like it is a good option now.
One of the best ways to save is to follow the 50/30/20 rule which simply means that you spend 50% of your income on necessities such as food and rental payments, 30% on leisure and buying stuff that you want like shopping, games, etc.… and saving the remaining 20%, or you can even invest them, depending on your personal finance plan. However, you don’t have to follow the percentages exactly, if your personal finance goals need you to save more than 20%, then you can maybe lower the percentage for leisure and non-essential purchases.
For investment, stock market is the best option. Initially you may face a setback but eventually you’ll master it and make good money.
If shares and bonds are not your cup of tea, a part-time online business can be a good choice. For instance, before you may spare an hour for Vlogging sharing tips for hair improvement and blab la bla, once you get back from office. Or, you may start selling something online through social media. Boht of these ways won’t cost you much but gradually become your asset.
2. Start negotiating
In this case, comes the sentence: if you never try you will never know. The chances that you can negotiate a better deal if you have been in a contract for a year or more are definitely high. Look at the contracts you have such as your phone, internet, subscriptions, etc.… and consider contacting the providers to negotiate a better deal. You can tell them that you are considering switching up to another provider because their fees are high, and you will be surprised by how far companies are willing to go for customer retention, especially ones that have been with them for 1+ year.
3. Consider different mortgage types
Source: forbes.com
We have all heard of maybe a maximum of three types of mortgage payments. However, there are many types that you can choose from depending on your financial situation, assets, income, and financial goals. The most common ones are conventional loans, fixed-rate mortgages, and adjustable-rate mortgages, but have you heard of reverse mortgages? They basically allow homeowners to borrow money using their home as security for the loan. The trick is finding the best reverse mortgage lenders, which has gotten easier with review companies such as Reverse Mortgage Reviews (https://reversemortgagereviews.org/).
4. Work on your credit rating
Credit rating is not something the average person thinks about regularly but turns out it is an important aspect of financial success. Whenever you want to borrow money, whether for big purchases or investments, the lender will check your credit rating to make sure that there’s a high probability of you repaying back the money. Your credit rating is a score you get according to the history of your financial behavior.
There are some things you want to avoid so you don’t get a low credit score: being late on credit card payments, having a history of rejection for loans (so make sure that your financial situation matches the requirements of the loan you are applying for at any time since it affects your ability to obtain future loans), not being registered to vote, not repaying your loans on time.
How is your credit rating calculated?
Source: ridetime.ca
Your credit rating is calculated using a number of factors, including your payment history, credit utilization, credit mix, and length of credit history.
1. Payment history: This is the most important factor in your credit rating. Your payment history includes all payments made on time, as well as any late or missed payments. Late or missed payments can hurt your credit rating, so it’s important to always make your payments on time.
2. Credit utilization: This is the amount of debt you have compared to your total credit limit. It’s important to keep your credit utilization low, because high levels of debt can hurt your credit rating.
3. Credit mix: This is the types of debt you have. It’s good to have a mix of different types of debt, such as revolving (credit cards) and installment (loans).
4. Length of credit history: This is how long you’ve been using credit. A longer credit history will generally help improve your credit rating.
5. Accounts organization
Generally, you need to have at least two accounts: a current account and a savings account. This simply ensures that you don’t accidentally start spending your savings while you are doing Christmas shopping or something like that. But if you want to take it a step further, have money saved in an emergency fund which is an amount of money that can cover your expenses if you have no income for three to six months, ideally.
