The financial goals that we set for ourselves change and evolve during the course of our lives.
Ideally, you began to formulate an idea of different financial goals during your 20’s; when you started to take responsibility for yourself. As we move forward in life, there are more responsibilities and more things to take into account. The most likely scenario is that at your 30’s you have to provide for yourself, your family and start thinking about their future.
Unfortunately to be financially secure and prepared for the future, being free of debt is not the only factor to consider; There are many other things you can do to have the peace of mind you need.
SAVE SIX MONTHS OF INCOME
With luck, at your 20’s you started a savings account with approximately £2500; and although any savings are always good, it is more likely that in your 30s you are at more risk of being in a difficult situation. For example, if you lose your job or even if you quit, six months of saved income can keep your family afloat without feeling the shock that could affect them all emotionally. According to several studies, the time it takes to find a new job is approximately six months. For your 40’s you can even start saving a year’s income.
PAY ALL NON-MORTGAGE DEBTS
In your 20’s you should have started paying all the debts generated by credit cards. The goal during your 30’s is to continue like this, not generating or accumulating new debts. Try to pay all your non-mortgage related debts. Cut out all the excessive expenses, try to earn some extra money aside and try to eliminate any debt you have. It can sound overwhelming to support a family, pay off all debts and have a decent lifestyle with an average income; but it is more than possible.
INCREASE RETIREMENT SAVINGS TO 15%
With good luck, you started saving for your retirement during your 20’s. You could be one of the lucky ones who will have savings for your golden years unlike 40% of baby boomers who have nothing saved. As you go paying more and more of your debts, you can begin to move the money destined to pay debts to savings; and so start saving 15% of your income. If you are looking for even more security, you could even start saving 20%.
ORGANIZE AND COMPLETE YOUR PLANS OF INHERITANCE
Whether it is in 60 years or more, chances are you are going to die. If you want to pass your loved ones your belongings it is important that you have your affairs in order. If something were to happen to you, by leaving a will or trust your loved ones will receive what you want to leave them without much altercation. On the other hand, if you have children in the terrible scenario that something would happen to you or your partner with a will you can designate the person who will take care of them and in the future they will be given their corresponding financial resources.
CONSIDER A TERM LIFE INSURANCE
Term life insurance is life insurance that has a finite term. They last from 5, 10, 15, 20, 25 up to 30 years. The installments of this insurance last for the selected term, are fixed and will not increase until their renewal. Generally, this type of insurance is purchased at 70, 75 or 80 years of age. Term life insurance is attractive because it offers security to the family at an affordable cost. It is advisable if what you require is an insurance for a certain time, like when you have small children or you are paying the mortgage of a house.
START SAVING FOR UNIVERSITY
Judging by past developments of tuition fees, it is likely that tuition will continue to increase annually. We hope that in the future a good university education will be more accessible, but for now we have to prepare ourselves for the harsh reality. Begin saving as soon as possible, an option could be to open a children’s savings account. In the UK tuition fee loans and maintenance loans are offered. There are many different options that can be followed to be able to have good savings to pay for the tuition of our children.
HIRE AN ACCOUNTANT FOR YOUR PERSONAL FINANCES
Most likely during your 20’s, the accounts were quite simple; without worrying about more than just some expenses and some savings, now there are higher incomes, several insurances, mortgages, maybe some minor businesses, university savings, retirement plans, among others. All these movements influence your taxes and make the accounts more complicated. An accountant can help you simplify the difficult task of paying taxes. Although you can use some software, an accountant can help you in a more personal and experienced way.