5 money must-dos before you turn 30

 

Without financial goals and specific plans for meeting them, you drift along and leave your future to chance. There are often times when you require a lump sum amount. With the help of financial planning, such occasions can be anticipated and met without any problem.

Financial planning is simply assessing your income and expenses and making the best possible investments and tax saving plans. Financial planning might even involve making career-related decisions or choosing the right insurance.

When you are in your twenties, it is time to enjoy the money that you are making and indulge in all the freedom of being financially independent. But stop for a moment and think…your first baby may be five years down the line and you may be buying your first home around the same time. True you don't believe, you will ever be retired but you still need to plan for the time when you will have no income and you will need to live on your savings. All financial planning need to start now. At this age they can invest a larger percentage of income since most of the unmarried people are living with their parents and do not have major financial responsibilities.

So without much ado, here are five money action plans you must start on right now.

1. Take some risks

You have your whole career and life ahead of you. This is the time you can take risk and even if you make mistakes there is ample time to cover up.

Invest in equity. Find shares of little known companies which show potential. It feels great to out guess the fund managers who tend to walk on well trodden paths.

Another risk you can afford to take is in choosing your career path. Try something new and who knows it may change your life. Since most under thirties would be single or at least without kids, it is a good time to get some experience working in an international environment. If your company does not offer the opportunity looks around for corporates who do. You can also work with an NGO for a few months. It adds an impressive base to your resume and widens your horizons.

2. Buy insurance

The best insurance rates are available to people under the age of 30. Take advantage of this and buy term insurance. This is not the time to put in money in investment based insurance products. The below thirties should buy term insurance of varying maturities. Term insurance will give you adequate risk cover at a low cost.

Also absolutely necessary is medical insurance. Again the rates will be advantageous at this age. Also illness and mishaps do not come announced, so it is best to be prepared rather than drown in debt.

3. Invest in an education

A higher education is often the key deciding factor for promotions. With a few years of experience under your belt, it is time to upgrade your skills and qualifications. You may do a part time course along with your current employment or even quit and take a sabbatical to become the person that employer is going to chase.

4. Start a retirement fund

You need more income than you can imagine when you retire. With life expectancy moving up you will live longer. Medical expenses too are on the rise. Money invested early grows at a compounded pace. Make sure your retirement fund is in safe investments and is virtually untouchable.

5. Plan for short term goals

Short to medium term planning is as important as long term goals. If you plan to buy a home in a few years, you will need a lump sum for the down payment. You may also have the yearn to travel the world…well with a bit of planning it can be done.