As we approach our 30s, we tend to adopt a new approach to life. This is a time to take additional financial responsibility, because either conjugal life begins at this stage or we have to think of our children’s future. These additional responsibilities make us realize the importance of finance planning in life. So, how are you going to plan your finance for your future? Mentioned below is a number of important financial steps you need to take before you turn 30.
Buy insurance for you and your dependents
Buying insurance is one of the important decisions that you need to take before you turn 30. You can purchase both life insurance and health insurance plans for you and your family members/dependents. There are different types of life and health insurance plans available in the market providing cover for different tenures. Life insurance plans offered by different insurance providers help you meet your financial needs at different stages in life. These plans not only offer risk coverage, but also offer cover against healthcare expenses and security after retirement. Even you can pay off all your existing debts with the help of these plans. Also, you can borrow money against life insurance plans. Life insurance plans can serve as a good investment option for you. Likewise, health insurance plans provide protection against medical cost incurred in hospitalization, surgeries, nursing care, consultation fees, diagnostic tests, hospital accommodation etc. By purchasing these insurance policies, you can save tax under section 80D and 80C of the Indian Income Tax Act, 1961.
Make early investment plans
Making early investments helps you secure your future. Even if you invest a small amount like Rs. 5000 p.a., it will compound over the years and by the time you retire, you will be able to get good returns on your investments. Fixed deposits, Life Insurance Policies, National Savings Certificate are some of the good investment options wherein you can invest. While investing in financial instruments like fixed deposits, you can take the help of an interest calculator to know the exact rates of interest on your savings.
Keep some emergency funds ready with you
Given that life is full of unpredictable circumstances, it is always advisable to keep some funds aside so that you can face any unexpected emergencies in the future. Minimum 1 year of your annual expense, you need to keep separately to face such unforeseen situations. However, depending on you and your family’s requirements, you can decide exactly how much emergency funds you need to keep separately.
Try to be debt free
Try to pay off all your loans and EMIs as early as you can. Given the easy access to loans in India, many of us are in debt these days which is not healthy. So, the moment you get some extra money such as bonus or hike, you can use that money to pre-close or minimize your debt. It is something that you need to finish off before you turn 30. Being debt free, you can enjoy the following benefits – increased savings, good credit score and an anxiety free life. Also, you can choose to invest in different areas once you are debt free.
Plan your children’s education
The cost of education has gone very high. Hence, it is important to plan for your children’s education much ahead of time. These days, even a kinder garden school charges more than Rs 1, 00,000 as admission fee per children. Likewise, a medical seat in reputed medical college can cost you more than 60 lakhs. So, considering this flying growth in education fee, it is important you think of your children’s educational expenses, even before you plan for a kid.
It’s time to plan for your retirement
It sounds strange that you are at your 30s and you need to plan for your retirement. But, it is actually important. Start saving for your retirement before it is late. You can do so by investing in different retirement savings plans offered by banks and insurance companies like Life Insurance Corporation of India (LIC). These plans provide you with financial as well as social security at your old age.