What should be your financial goals in your 30s?

 

If you are stepping into your 30s or will be soon, you must know that this is a crucial decade for you, a time of many responsibilities and commitments. It is important that you have clarity about your financial goals and have a plan etched out to meet them. Managing investments and insurance are a crucial aspect of your financial roadmap for the long term.

Time to build a retirement corpus

One important long-term goal is to have a comfortable retirement. Building a corpus for your retired life is not a goal you suddenly think up as you approach those years. Starting early is extremely important. The 30s are the ideal time to start building a corpus. You could opt for a protection and savings insurance plan that helps you not just protect your family and yourself but also ensures savings. Opting for a non market linked plan means you a portion of your premium goes into investments and their performance is not market-dependent. Committing to any form of investment in your 30s and sticking to it for the next three decades would mean that you have a sizable retirement corpus. To calculate the amount of the retirement corpus you will need, there are different rules. You would need to estimate your expenses currently and apply at least a 6 to 7 per cent inflation rate for the years left till retirement. The result needs to be multiplied at least 25 times to arrive at a corpus you must target. 

Monitor your credit score

Another aspect you would need to look at in your 30s is to ensure a good credit score. A poor credit score will affect your borrowings and also reflect poorly on your finances. If you have any pending bills or small debts, pay them off and don't add to your debt burden. Also, avoid using too much credit percentage against the credit you have available. Having a certain amount of financial discipline helps in building a good credit score. A good credit score is typically 700 or more. Anything that touches 800 or more is considered excellent. 

Create an emergency fund

Creating an emergency fund so you can plan for any unforeseen events is another important aspect of financial planning when you are in your thirties. Ideally, you would need at least a year's worth of expenses in an emergency fund. The fund is important in the case of a sudden job loss or if you would want to take a sabbatical. It gives you the leeway to plan your future better when you know you can fall back on the emergency fund. Although it looks huge, saving a month's expenses every year of your thirties (the decade) helps a great deal. 

Get an insurance plan

Insurance is an important aspect and not to be missed as part of your financial plan. There are many types of insurance policies but you could pick one that not only provides you cover but also helps you save a part of the premium. A non-linked savings insurance plan gives you the option of getting regular payouts and is ideal if you may need an additional income at any point in your life. There's always adequate coverage for you and your loved ones in the case of any unexpected twists that life may throw at you. 

Diversify your investments

Once you have ensured that you have an investment and insurance plan in place, you also need to make sure that your investments have adequate diversification. Like the adage goes, it is never advisable to put all your assets in the same basket. Ensure that you have different forms of investment, and in different asset classes so that at a time when one asset doesn't perform well, you have another to fall back on. A reward-risk balance should be at the centre of your plan. So, make sure to have an asset allocation strategy and use a combination of investment opportunities, including different types of mutual funds, fixed deposits or a savings insurance plan. 

Conclusion

Turning 30 is a landmark and the decade is when you will see the most responsibilities and commitments but it is also the decade when you can plan your finances better. You have a steady income earning capacity and in your early 30s you also have the room to put aside some of your earnings to ensure a good retirement corpus. Most importantly, the thirties are the ideal time to get yourself a reliable insurance plan that is not market linked and is a savings and protection plan to hold you in good stead for the future. Pick a plan such as HDFC Sanchay Plus that is a non-linked non participatory savings insurance plan ideal for someone in their 30s who is creating a roadmap for their financial future. 

ARN:ED/09/20/20585