Quote of the Week: “To accomplish great things we must not only act but also dream, not only plan but also believe.” ~ Anatole France
Our aspirations and goals often change with our position in the lifecycle. With time, it is amazing how our thinking process, financial priorities and goals change with events like marriage and the arrival of a child. This is why attaining 30 years is a crucial phase in one's life cycle. Some goals you should work on actualizing at this life-stage include:
A person at this stage is still young and probably newly married. The arrival of children quickly changes the financial situation of a young couple. Planning for children's education comes to the fore. Parents can comfortably save for quality education via long term investments, such as a Money Market fund. They should be prepared to cut back in order to achieve these goals.
2. Plan for Retirement
At this stage, difficult decisions are made to cater for all financial needs of the family. Unlike your twenties when retirement seemed like a far off event, you realise that the future is very close. Save for retirement to have peace that when you will be unable to work in your sunset years you will still have a quality life.
3. Factor the Costs of Investing
The charges in some financial products can eat up your returns significantly over time. Before signing up to any financial product, ask about the fees, taxes, penalties, transaction costs and other hidden charges. When investing in a unit trust in particular, enquire about the net rate which is what you will get after all costs are deducted.
4. Have A Backup Plan
Consider the possible catastrophes that could occur and plan for them. A life insurance cover would secure the financial stability of your dependants in case of your sudden demise. A medical cover is just as important as your resources will not be drained in the event of a serious illness.
5. Continue to Learn
If you stop learning, you will lose what you already have. Never stop investing in yourself. Keep your earning power growing through continuous education, training and personal development. Your thirties are a great time to familiarise yourself with personal financial management so as to set up a financial system which will serve you well for life.
Conclusion: Pre-empting our financial needs at various life- stages and investing in knowledge on how to meet them will ensure you are not caught unaware by life events. Saving is a rewarding habit if done right. We hope that these tips will help set you up for success in your forties and beyond.