3 Personal Finance Questions Every 30-Year Old Should Be Asking Themselves
In our previous article last year, we talked about the top money questions every 20-year should be asking themselves. In this follow-up piece, we’ll take specific aim at those of you who have clocked up a little more mileage than that 🙂
If you are into your third decade, we figure you would agree with us when we say – things start getting a little more complicated when you get to 30.
You might be in the middle of countless “real life” transitions, like:
- Moving up the corporate ladder
- Starting a small business
- Buying a home
- Getting married
- And thinking about starting a family
The cool thing about getting into your 30s is that you’re probably making more money that you ever have before. The only downside is that for the first time you in your life you need to start making some bigger decisions about your personal finances.
So, what exactly are those questions you should be asking yourself at this time? Don’t worry, we’ve got you covered.
1. Am I tracking my money accurately and reviewing how I spend it?
It’s easy to ignore what you’re doing with your money, especially if everything is going swimmingly, and no major financial setbacks have tripped you up.
The only problem with this “happy-go-lucky” approach is that you’re relying on the off chance that you’ll have enough money in the bank when you need it for an emergency.
What type of emergency? Need an example or two?
- The day your car breaks down
- The day your medical aid doesn’t cover all the medical bills
- The day SARS says you owe them bucks
Money tends to disappear quickly when we fail to track it.
So, have a plan when it comes to your money. Take the time to review your budget and analyse your spending habits. If you do this, you’ll be able to be far more proactive, and not end up stressing when you need to find some money in a hurry.
Budgeting is the key to managing any big corporate and it’s no different with your personal finances. If you haven’t made a decision to start budgeting in your 30s, you need to think about how much money you are probably wasting each month because you aren’t tracking it accurately enough.
Make sure you cater for the big expenses that come up every year – set aside some money each month to cover them. If you don’t make a provision, you’ll end up having to use your credit card.
A little planning goes a long way in this regard.
These are the types of expenses that tend to pop up every year:
- New clothing items for summer and winter
- A car service
- Birthday gifts
- A holiday
- Back-2-School expenses
- Your kid’s birthday party
2. Am I investing in myself and have I considered a ‘side hustle’?
Do you need to earn more money? Are you developing new skills?
The word ‘capital’ doesn’t only have to refer to money and wealth. Ever heard of a term ‘human capital’? It represents the talents, expertise, skills and knowledge that you have. If you build on your ‘human capital’ would you be able to get a promotion or a salary increase?
The trick to long-term wealth (and something you only start learning a little later in life) is that you are the engine that drives your ability to make money.
The new digital world has created ample opportunities for all of us to explore any avenue we wish. But it’s super-competitive out there, which means you need to be working on a set of skills that will always pay the bills.
Maybe you need to start focusing on a skill you have, that you don’t necessarily use in your day job, but one that could bring you in a whole bunch of cash, on the side.
According to Moneyweb, one in three South Africans are taking on additional jobs to make it through the month.
Hopefully, you can set something up to hone your skills and bring in a little extra moola.
3. Have I adjusted my insurance lately?
In your 30s you’ll start to think a lot more about stuff like:
- Life cover
- Income protection cover
- Critical illness cover
- Car and household insurance
- Medical aid plans
- Medical gap-cover that tops up your expensive medical aid
- Pet insurance
By the time you reach this new decade, it’s very likely that you’ve added more valuable things into your life. Things like houses, cars and big flat screen TVs, just to name a few.
All of these “things” cost money and have come at some considerable cost to you (in terms of time and money). As you accumulate more things, the risk of a loss increases, so updating your insurance schedule and reading through the fine print is really important.
Maybe it’s time to start thinking about taking out some life cover.
If you’ve gotten married or had a kid recently, you’ll now have people who are dependent on you and should something happen to you, you’d want them to be financially taken care of.
If you took any of your life cover policy when you were in your 20s, make sure to check that you’re still happy with your cover amount, your nominated beneficiary and let the insurers know if your occupation or smoking status has changed. If you’ve picked up a new high-risk sport or hobby, also let your insurer know about this.
Are you on a medical aid yet? Did you know a late joiner penalty can get applied to your monthly premium for every year, after the age of 35, that you are not on a medical aid?
Your 30s are going to bring some challenges. Making sure you have all your bases covered when it comes to insurance is one challenge you can avoid.
Until next time
The MoneyShop Team