Feeling financially inadequate going into your thirties? You’re definitely not alone.
At age 30, there are certain things that society expects from you, and more so, things that you should expect from yourself.
30 is a significant age for most of us. In fact, it is touted as the age of the beginning of wisdom.
In terms of finance, you ought to be putting yourself together by age 30, in preparation for the wild ride ahead.
In this article, we’ll look at 10 strategic financial habits to learn before or by the age 30.
Let’s get started.
Have at Least 3 Income Sources
Your income is fuel for your investments and financial growth.
With more income sources, you have more funds to work with and more flexibility in terms of your finances.
By age 30, you should have at least three income sources that bring in money for you.
It doesn’t have to be significant or consistent. As long as you can pull funds from at least three sources, you can grow from there.
Track your expenses
Your expenses are windows through which your money leaves you.
If you want to keep that in check, then you have to know how, when, and what takes your money.
That information would help you cut out unnecessary expenses, as well as adjust your spending.
There are mobile apps that help you keep track of your expenses and even create a budget around them.
Create a Reasonable Budget
Having a budget is like building a wall around your finances.
You allocate a specific part of your earnings towards expenses, while the other goes into your vault.
Having a budget is so underrated that you wouldn’t know the benefits until you have one.
For me, the greatest use of a budget is to eliminate Impulse spending. If my monthly budget is 1,000 then there’s no way that I can spend beyond that.
Eliminate Impulse Spending
Even though having a budget does most of the work of eliminating impulse spending, the onus is still on you to consciously do away with spending on unplanned activities.
No matter how good an opportunity presents itself, spending impromptu isn’t always a good idea.
A discount deal? A rare product? A once-in-a-lifetime opportunity?
None of these is worth spending on impulsively.
Automate your Savings
We often neglect our savings because we think any money in the bank is savings.
No, it’s not.
Your savings should be an isolated activity where you put money away, set aside for big future expenses.
Here are some of the things you can save for:
- Rent
- A Car
- Vacation
- Wedding
- School Fees
- Wardrobe Change
- Childbirth
These things are not everyday expenses. They are expensive and require you to save for an extended period.
Use your savings towards that.
If you have no need for any big expenses in the near future, then your savings can go towards an emergency fund.
Have an Emergency Fund
Having an emergency fund is an important confidence booster.
You know that if an emergency comes up, you are able to handle it without any fuss.
In fact, having an emergency fund is a sign that your finances are in order.
Life can happen and many things can go wrong. You need to be able to respond and bounce back without going into debt or losing your assets.
An emergency fund is not only for making impromptu expenses. They can be used for making impromptu investments.
You never know what lifetime opportunity would come your way. You need an emergency fund to respond accordingly.
Create a Treat/Reward Budget
What’s the essence of having money without enjoying it?
You want to have fun while sticking to your budget, so why not create it within your budget?
A treat or reward budget will help you reward yourself periodically when you stick to your budget or make a significant money move.
In fact, it keeps you going and helps you enjoy the whole process.
It would be too mechanical and boring to just hoard your money and plan towards a future that is uncertain.
Instead, you throw in moderation by planning for the future while enjoying the present.
To do this, you need to set aside a part of your budget for rewarding yourself for sticking to your plan.
A 3% – 5% won’t be too bad. But make sure you reward yourself at the end of the budget timeline, not at the beginning.
Learn to Invest Profitably
Investing is the only way to grow your money.
You are either spending or investing. While one takes your money without monetary returns, the other helps you grow your money.
You have to learn to invest profitably. Learn to invest in what you know and what you feel comfortable investing in.
That is the beginning of growing your finances.
There are many types of investors, and no two investors are the same. Learn to know the type of investor that you are and what types of investments tickle your fancy.
Stick to what you know, keep learning, but ensure you are always investing profitably.
Learn to use Debt
A mentor once said, “Everyone is scared of debt, except the rich.”
Debt is leverage. It helps you take on bigger opportunities and risks that you ordinarily wouldn’t be able to afford.
There is bad debt and good debt. Good debts are used towards investments and projects that have significantly high returns in the future.
You are probably scared of debt because you either do not have the right skill to manage it or you don’t have access to opportunities to utilize debt.
That is where your learning begins.
Bet Big on the Future
The future brings with it opportunities that you can only dream of.
More millionaires and billionaires are going to be made in the future than in the past, and with a world that is getting more and more convergent, the opportunities are getting evenly distributed.
If you position yourself right to be among the early birds, you would definitely catch your worm.
Use part of your emergency fund or savings to bet big on the future.
Look for emerging trends and opportunities, read more about what the future would look like and the industries that are emerging, evolving, or taking over.
You could lose money, but if you bet strategically and consistently enough, you could create a future with endless financial possibilities for you.