Financial steps to avoid in your 30s

 UGODRE OBI-CHUKWU 

   

 

Ugodre Obi-Chukwu

Are you in your thirties or probably in the twilight years of your twenties? Then this article is for you. For some of us who are in the twilight years of the thirties it’s easy to look back and wish there were things that we did that we probably should have done better or things that we perhaps shouldn’t have done. There are also things we should have done that we did not do. These are financial steps that younger people must avoid taking. I have picked out some.

Avoid depending on one source of income                   Whether you are an entrepreneur or employee, an alternative source of income is always a welcome financial buffer.

This becomes even more important in your thirties, when the demand of bills and other financial commitments bite harder. In your thirties, you have age on your side, experience and wisdom to take on other jobs, investments or businesses that can help augment your cash flow.

Avoid not having an emergency fund

An emergency fund is a dedicated savings account that caters for any emergency that may arise periodically. It could be a health problem or an accident or you suddenly lose a job or presented with a deal you can’t refuse.

An emergency funds is there for you to rely on when such needs arise. Not having an emergency fund can be catastrophic.

Avoid not having any insurance

You can’t be in your thirties and don’t have either of a life insurance, car nsurance or health insurance. A life insurance ensures your loved ones are catered for in the event of death or that you are taken care of in the event of a physical injury. Health Insurance on the other hand ensures you and your dependents can be catered for whenever anyone falls ill, without having to pay anything extra. Insurance should be an important element of your financial life cycle and shouldn’t be avoided.

Avoid being jobless Being in your thirties involves taking up a lot of responsibilities and it’s a period where you begin to establish a legacy for yourself. You can’t achieve this without a job. You can be self-employed or working for someone else or an organisation.

Bottom line is that you need to have a job that provides you with a decent level of economic security. It’s easier to be without a job in your twenties than in your thirties as getting a job gets more difficult the older you get.

Avoid spending too much on women, fashion and parties

Being thirty often coincides with financial buoyancy giving many a financial leverage they never had. What typically ensues for many is a desire to spend on women, fashionable things and fun. It’s a flock mentality that makes it hard to resist for even the most conservative. Whilst it may not be completely avoidable it can be curtailed. The price for not curtailing it is financial ruin. Avoid it!!

Avoid easy money making investments

People get more vulnerable when they attain a certain level of financial security. In your thirties you probably may have worked between five to ten years and may have qualified for perks and allowances that give you bulk money.

You soon get bombarded with all sorts of investment outlets that promise you quick returns on your money. What follows next of course is tears and sorrow. You don’t want to be caught up in that.

Avoid owing too many loans – As you climb up the social ladder there comes a period when taking out a loan or a mortgage becomes inevitable.

However, your ability to make sure that doesn’t take you to financial ruin depends on the type of loans you take and the opportunity cost it presents. There is every likelihood that in your thirties, you want to buy a house or live in a bigger house, drive a nice car or even get married. All these things are important but you need not borrow to have them all in your thirties except of course you have the cash.

Avoid investing foolishly

Most people advice that you start investing very early in life even if it means taking huge bets. Bets are goof but there comes a time when you have to apply wisdom and common sense to investing. This is the age that requires you selecting the right investments for yourself and family.

Your portfolio allocation must be optimised to include a mixture of shares, real estate, bonds, mutual funds etc. You should also explore the possibility of increasing your pension fund contribution as well. This is no time to mess around with speculative investments.

Avoid being a “cheerful” giver

Helping others in times of need is a critical part of human nature. However, excessive financial magnanimity is a sure path to financial ruin.

You can’t give more than you have and what you have shouldn’t be more than your disposable income. Your disposable income is what you are left with after you have kept money aside for your bills, investments, feeding, family upkeep, liabilities and savings.

Whatever you give out as a gift should be weighed against your disposable income rather than your total income. Cheerful giving is a good thing but it shouldn’t be done at the expense of your financial security otherwise the giving itself becomes counter productive.

• Visit www.nairametrics.com or tweet at me @ugodre for more personal finance tips . Source: PUNCH.