Money Questions You Should be able to Answer by Age 30
Building wealth and maintaining a solid financial health in your 30’s may be too early for some. But it is the perfect time to get serious with your finances.
By the time you reach this age, you should now have a long-term plan for saving, investing, retirement, and boosting your income.
Do you want to know where you stand in this financial matter? To help you get started, here are some questions that you should answer.
What Is Your Net Worth?
Net worth refers to the total sum of your assets minus all your debts. When you reach the age of 30, you must be focusing on your establishing your net worth.
First, establish your net worth by boosting your income. As much as possible, do not settle for one source of income. Second, invest your money well. Find investment avenues where you can grow your money and built your portfolio. Lastly, you should keep your debt at a low level. Don’t borrow money if it is not really necessary. Pay your card balances on time so you will not accumulate interest rates.
What Are You Invested In?
As you land your first job, it is important that you should be considering how to invest your money. Having an investment vehicle will help you grow your money, which you can use to either put up your own business or to retire comfortably.
There are several ways on how to grow your money, whether on stocks, mutual funds, or UITF. Choose one that suits your budget, financial goal, and investment horizon.
Make sure to study first the investment you are getting in to, so you will know that your hard earned money is safe.
If you happen to have an investment already, make time to review or rebalanced your portfolio. This will help you see if your money is doing good.
Are You Properly Insured?
Having a healthy finance is not all about earning money. You should be protecting it as well.
An insurance will help you pay for the unforeseen expenses, such as critical illness or accidents. Talk to a financial advisor to help you know what type of coverage you need.
How Big Is Your Emergency Fund?
Many financial experts encourage people to have an emergency fund. This fund will help you manage unexpected expenses, such as medical bills or home repairs. It can also be your contingency when sudden job loss happens.
Ideally, an emergency fund should contain at least 3 to 6 months’ worth of expenses, which is saved in cash.
When you reach 30, you should have a stable emergency fund so when unexpected event happens, you can easily manage it.
Do You Have A Retirement Plan?
Many thinks that retirement is a long way to go, that it is too early to think and plan about it. Well in fact, the sooner you start your retirement plan, the more you will have in your golden years.
By this age, you should already have a concrete plan for your retirement. Before you identify how much you should save for it, determine your retirement goals first. How do you want to retire? Do you want to live in the city? Or you prefer to settle down in the province? Answering these questions will help you get started with your plan.
Managing your finances may be sound complicated. But with proper knowledge, handling your money should not be daunting.
If you do not know where to start, you can seek the help of financial experts. Plus, you can read several financial tips and guides online.