Following from my previous article, ‘Managing money in your 20s – where do I start?‘, we now find ourselves a decade down the road and starting to wonder what we should be doing next, now that ‘adulthood’ has approached. We have different transitions that need to be considered and planned for. For many of us, this phase in our lives is where we get married, start families and progress in our careers.

Here are some tips to assist you in managing your money through your 30s:

  • Boost your emergency fund – in our 20s, we started building an emergency fund for those small emergencies, but now we have larger and more expensive responsibilities, which we need to protect. Ensure you are adding to your emergency fund to cater for four-six months’ worth of expenses.
  • Don’t overspend on a house – as we progress in our careers; we tend to build up our remuneration – the one mistake we make is upgrading our living standards the more we earn, and the most common thing we do is buy a bigger and better house which dries up our extra cashflow and prevents us from working on our other financial objectives.
  • Diversify your investments – as your investment and financial plan gains traction, we now need to diversify and ensure all our eggs are not in one basket – we need to ensure that our hard-earned money is placed all around the world, in various sectors and industries to reduce the risk and volatility in our investment structures.
  • Start an education fund – family planning is an exciting part of our lives, but should we not adequately plan for it, it can come back to haunt us. Make sure you begin saving for your children’s education the day they are born so that if they want to study at Harvard and become the next Harvey Specter (sorry, I love the series ‘Suits’), you can provide the funds without exerting pressure on your cashflow.
  • Make sure your risk and wealth protection plan is updated – now that we have more family responsibilities, we need to make sure our loved ones are protected in the event of death, disability and/or dread disease. Make sure you have cover in place that will cater for their needs and objectives – it’s also critical that you are not overinsured and paying unnecessary premiums.
  • Prepare an estate plan and implement a valid Will – it’s vital to ensure your wishes are met should something happen to you – we also rarely ensure that there is enough liquidity in our estates for those ‘unforeseen’ estate expenses such as estate duty, tax compliance, capital gains tax etc.
  • Build onto your RetiremeantTM savings – building on from the last decade, we must not forget to be consistent and disciplined with our Retiremeant™ savings – this is where we will start seeing the benefits of compound interest.

These are the years to build on our foundation when we started our financial habits back in our 20s. Warren Buffet’s quote sums it up quite nicely: “Someone is sitting in the shade of a tree today because someone planted a tree long ago”.

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