4 Financial decisions you should make today before turning 30
Before turning 30, you should make certain financial decisions as early as possible for a stress-free future where financial contingencies are a far cry.
So what are those decisions? Here’s a list of 4 basic decisions that are almost universally applicable, so let’s take a look.
1. Ensure Yourself – There is no specific age for taking out an insurance policy and the earlier you start the better.
By the age of 30, you are probably one of the contributors to the family income if you are in the joint family system or the main breadwinner in your nuclear family.
Even though your spouse earns, there will be financial loss in case of any unfortunate event. Insuring is always the best answer for income protection and buying a term plan with considerable coverage is also affordable.
2. Plan for Retirement – Retirement is the last thing you think of when you just hit the 30-year age mark. The whole life ahead seems too short to accomplish all you desire and the thought of retirement leaves a sour taste in the mouth.
But planning early is the key to a comfortable retired life. Post 40 when the majority of people plan for their retirement, the accumulated corpus falls short because of other liabilities.
So open a PPF Account and start saving a little amount every month. Let compounding do its magic and you won’t have to worry about your retirement corpus.
3. Health is Wealth – Moving on from life insurance, can health insurance be left far behind? In the year 2012, the insurance sector reported a surge in insurance claims to 47% as compared to 15.8% in 2004 and that too in the age group of 26-35 years.
Yes, though you are turning 30, the modern lifestyle has given rise to newer diseases that do not consider age while attacking the individual. So don’t be foolish and invest in a health plan probably a family floater one to cover the entire family.
If affordability is a factor, you can start low and then add a top-up plan with your base plan for complete protection.
4) Buy a SIP (Systematic Investment Plan) – Mutual funds have become attractive with the diversification they provide and with a positive trend observed in the stock market, investing in a SIP of any good performing mutual fund house is the next best decision you should make.
Starting early gives the benefit of compounding returns where the money grows exponentially over the years.
So when you need funds for your child’s future or for buying a house or for that much-awaited Europe trip, you won’t have to look anywhere else.
Investing in multiple SIPs is ideal taking into account the quantum of savings.