30s marks the transition into an age where one would have to shoulder major responsibilities. This period is known to herald the ideal time when one has to start taking a long hard look at the prospect of upcoming responsibilities and get their finances in order. Kavan Choksi says that by creating a robust financial plan early in life and sticking to it, one would get to reap its benefits in the future. As one starts to earn a stable income in their 20s, it would be the time to create a solid plan and make smart decisions that can impact their long-term economic well-being.
Kavan Choksi discusses the steps to take to be financially stable at 30
The thirties are a pivotal decade for many. By this time, most people have already achieved their educational goals and are starting to climb the ladder at work. Many also start to take major steps, like buying a house, getting married, or having kids, as they reach thirty. However, one must try to be financially stable before taking any of these major steps.
For a lot people in their 20s, becoming financially secure before reaching their 30s can seem like a huge task, but in reality, this goal is quite possible as long as one is disciplined enough. Working toward financial stability is not an exercise in self-deprivation. Rather it is a mix of smart planning, saving, and investing.
Here are some of the steps one should take to be financially stable at thirty:
- Budgeting: Proper budgeting is a crucial aspect of achieving financial security. To get started with budgeting, one has to list all their income sources and monthly expenses. After doing so, they need to determine which expenses are necessary and which aren’t. From the money left after meeting the necessary expenses, one has to decide how much funds they want to save and make the appropriate adjustments to their budget. Even though with budgeting, one may have to cut down their spending in particular categories, doing so is vital to enjoy long-term benefits.
- Live within the means: One should try to keep their standard of living a bit below what their earnings can accommodate. As one advance in their career and gains more experience, their pay would increase. But rather than using this extra income to lead a more lavish life, people should put the money towards debt payments or savings accounts. If the lifestyle costs lag behind the income growth of a person, they are likely to have an excess cash flow that can be put towards an unexpected financial emergency.
- Creating an extra income: If possible, people should try to find a way to make extra money in their 20s, when they are young enough and have a good level of energy and enthusiasm. This income can be used for paying off any pending debts or put into investments.
As per Kavan Choksi, people always be conscious of their debt situation and try to pay it off as soon as possible. It will be a good idea to make a list of all the debts one has, increase their EMIs to clear off the debts early, and make timely payments.