In your 20s, you can still be a bit immature about your finances, but thou shall strive hard in your 30s and beyond.
Here’s our short list of financial rules every person in their 30s should know. Now that you are older and (hopefully) wiser, these tips should be able to help you protect and enrich the wealth you built in your 20s and lead you towards financial security.
- Reevaluate your budget
You’ve established a reasonable budget in your 20s, and perhaps have already accumulated some savings. However, your expenses, ambitions, wants and needs will likely change as you get older. Your budget will have to adjust to certain changes like getting married, having kids and/or having a business. It is about balancing act—how you spread around your income. If you have gotten a raise, consider increasing your savings instead of your expenses.
- Adjust your insurance policies
By now, you have probably invested on some properties and assets, so make sure to cover them all. Perhaps, you have rented a bigger space or have probably bought a more private one. Maybe you are planning on buying a car or a house. How about that family member who is dependent on you financially? Have you got them life insurance yet? All these call for additional protection.
- Save 15 percent of your salary for retirement
When you first started saving for retirement, you may only have contributed enough to earn your CPF, or maybe you just let your CPF’s automated policy to dictate the income percentage you save, which is typically at three percent. However, experts recommend slashing off at least 15 percent of your gross income to your retirement. The good news is that your employer’s contribution counts. So, if your employer gives four percent to your CPF, you only have to save 11 percent.
- Boost your emergency fund
Check your emergency fund, and ask yourself whether it’s enough to support the lifestyle you have? Chances are, you have more bills to pay now than you did when you were in your 20s. The emergency fund you have a decade ago is not enough now that you’re in your 30s.
- Buy a house the smart way
If you have waited until you are in your 30s to buy a home, make sure to do it the smartest way possible. Get a modest home that you know you can afford to avoid being mortgage poor and leave some resources for other expenses. If possible, get a house that you can buy directly from the owner to avoid real estate agents commissions.
There are a whole lot more of financial decisions you will have to make later in your life. Apart from keeping these tips in mind, the best you can do is to talk to a licensed financial adviser in Singapore.