Being in your thirties is one of the most important and hardest stages of life in today’s society. In our early thirties, we are often urged by the society to marry and establish a family. As was the case with many of the 90s’ kids (including Yours Truly), parents in those days often advise their children to focus on their academics and careers in their 20s, promising to find an appropriate life partner when they approach thirty. Though I luckily got one girl to settle with, many parents currently are now struggling to get their children in their 30s to get married, and we can see this trend across states, across communities, and across gender. One may try to wonder whether it is about the finances, which is causing this concern.
So, what is a typical personal finance situation for people in their early thirties? How can they feel confident about their income and wealth? There is no point in making broad generalizations but let us try to create a checklist or some pointers that shall help us to think about some of the personal financial concerns that come up during this age.
Love the job you do:
Make sure you’re in a career you like. This question is best asked five to eight years after graduating. Job choices may have been influenced by peer and family pressures, societal standing, and upbringing. The employment market has cycles and demand-supply dynamics. Young earners must consider if they envision themselves improving and advancing in their chosen job or career. If you wish to shift your career track, you must act quickly. Obtain extra credentials, degrees, and skills to advance to what works best for you. By your early thirties, you should have a good appraisal of your talents and traits, as well as enough knowledge to make the decision to change careers. If not, seek advice, ideally from a professional outside the family, for a fair evaluation of your condition.
Determine your spending pattern:
Recognizing your spending habits and preferences is an important aspect of personal financial planning. In the early years of earning, one’s fascination with financial independence, or the FIRE movement (as it is known these days), drives one to work for money. Things however establish themselves after a few years. You should ask yourself certain critical spending questions, such as whether you spend within the limits of your finances. Do you often incur credit card debt? Do you overspend and constantly second-guess your decisions? Are you an aggressive spender?
After gaining five years of work experience, one ought to be qualified to respond to the above posed questions and critically evaluate their approach to handling money. This money persona is not set in stone, but rather reinforced by habit and conviction. Spending too little money is likewise an illness of denial and pain. Spending too much has negative personal finance implications. So, both the ends of the spectrum are difficult to eliminate and you need to work to strike a balance. You must find a middle ground between the two in terms of what you do and why. Reviewing your credit card and online bank statements, as well as your spending habits, is an excellent place to start in determining your spending style.
Consider your expenses carefully:
Evaluate how you handle your fixed costs and your optional costs. Try to answer a few questions: Do you pay all your utility bills on time? Do you pay your credit card bills in full? Do you maintain your obligations to repay personal and hand loans on time? Do you readily share expenditures for trips with family and friends?
Your spending habits influence your connection with money. It also assesses the sufficiency of your earnings and the distribution of funds for various purposes. It also reflects how you decide to spend money on yourself and others. You can be self-centered or exploited by others, or something in between. Be aware of your position. This critical skill is essential for maintaining control over your own finances.
Be cautious when it comes to big-ticket expenses:
Also, make a note of your large-ticket spending and determine if they resulted in assets or experiences that you truly loved. You should be cautious about your major purchases. Determine how you supported any big-ticket expenses that required loans, purchases that reduced your monthly income, or investments that provided stability and satisfaction. Did you save, plan, put off, and made those expenses over time, or were you impulsive? The answer to this question will mainly influence the type of saver and investor you become. Owning the latest smartphone or car is important, but if these purchases were impulsive in nature, you are probably saving less or committing less to other priorities. This is a game of allocation, and you have to consider how these expensive things affect your standard of life and your monthly routines. You may choose to use public transportation and stay in rental accommodations since these options allow you to enjoy the foreign vacations that you so desire. You may opt to buy a property because it is important to you, and the EMI deducting a regular percentage of your salary may not bother you much. Make sure that your goals and spending are in sync.
Save mandatorily and invest your savings:
You should examine whether there is a planned endeavour to save money each month. It might be a Provident Fund deduction, a mutual fund SIP, or just a periodic bank deposit. Saving is a habit that should begin as early as one starts to earn in their life, regardless of how modest the income is.
Young earners will have to make decisions on how to invest their resources for the rest of their life. After being casual about saving, such as rushing to save some taxes here and there, purchasing some random stocks, trading on the screen for a time, and so on, many individuals settle down to make investing decisions only very late in their life. Investing includes a systematic process. It entails recognizing the relationship between risk, returns, and diversification. It necessitates inputting one’s risk criteria into the available choices. No one knows how to invest until they have experienced at least one bull and bear market cycle. You should learn thoroughly from these experiences and adopt it in your investing decisions.
Our ability, aptitude, and attitudes toward income, regular spending (impulsive and intentional), saving, and investing are the main factors that influence our personal financial choices and approaches. By the mid-thirties, one should have a good understanding of one’s own financial style. Finding a life companion and settling in life needs this insight, as do the other objectives that the young man’s parents are working towards. So, I’d like to conclude this blog post with a quotation for individuals looking for a life partner or parents looking for a companion for their children: “It is always better to seek complementarity (in financial matters), rather than similarity”.
