I know, sometimes you sit in your office and suddenly it occurs to you that you are near or past 30; and turning 35 is not a faraway reality. Are you in a good place mentally, physically, and financially?
No pressure, but there are financial milestones that we ideally should achieve by the time we turn 35. Being young and clueless can’t be used as an excuse anymore.
10 financial milestones you should be reaching for while you are in your early 30s
1. Get insurance sorted out
Getting adequate insurance that meets your lifestyle and financial situation should be a priority. An unexpected accident or medical issue can cause income loss and set you back by thousands of dollars. That’s hard-earned money that may take a long time to make back.
Here are the basic policies that you should have:
- Term insurance to protect your family in the event of disability or death
- Critical illness insurance that offers a payout in the event of critical illness, early stage or later
- MediShield Life with an Integrated Shield Plan to protect your wealth during illness and hospitalisation
- Accident plan to protect you from income loss and pay for your medical needs
After buying insurance, you should also review your portfolio every few years as better policies may come up in the market and your budget and needs may change over time.
2. Have a solid emergency fund
An emergency fund is your war chest. It can save you during a rainy period, whether it’s due to unemployment, sickness, or other emergencies. Emergency fund should be at least three months of your total expenses. Of course, the more you have the better. Six months to a year worth of your expenses is more adequate.
3. Have long-term financial goals
Having a goal to work towards can help you plan for your future with more clarity. A long-term financial goal can be buying your own house, being able to travel three times a year, saving up for your child’s education, or retiring at 50. Most people will likely have more than one goal and writing them down can help you feel more determined to achieve them.
4. Be awesome at budgeting and saving
There are plenty of personal finance apps to help you with budgeting and money management. Starting a habit to track your expenses can help you pinpoint your highest spend categories and where you can cut down. It can also help you map out whether your income is enough to sustain the lifestyle you desire. If it isn’t enough, you can consider additional income streams.
You should also commit to setting aside a portion of your monthly income as savings, which can be easily done using apps or a separate higher-interest bank account.
5. Be a pro at tax reductions
Don’t pay for more taxes than you legally need to. We have a great article on how to reduce your taxes. The money you “save” can be donated to a charity of your choice, invested, or used to finance your goals.
6. Plan for retirement with CPF
Your CPF is meant to ensure you have a sizeable nest egg for retirement. Besides monthly mandatory employee contributions, you can do a lot to your CPF to help it grow faster. Here’s what you can do to optimise and maximise your CPF.
7. Have more than one income stream
For most people, a regular 9-to-5 job isn’t the solution to a comfortable retirement. We need more than one income stream to break out of the rat race. One way to do that is to invest. For other ideas, check out our list of 31 ways to bring in extra income even with a full-time job.
8. Be savvy with credit cards
Master the credit card game and let your cards earn you significant cashback and miles. However, remember to spend within your means and pay your bills on time.
9. Invest for retirement
Grow your money by investing it. Know your risk appetite and get started before you turn 35!
10.Be almost debt-free
Don’t weigh yourself down with too much debt. Debts can affect your credit score and create a lot of stress. Aim to be almost debt-free by 35 years old. That means paying off any student loan, personal loans, auto loan, and as much of your housing loan as possible.
If you have achieved most or all of these financial milestones, congratulations! But even if you haven’t, it’s never too late to start. Start planning, and put in the effort to work towards them.