Where Should Your Money Go in Your Thirties? MoneySmart Philippines (2020)

Where Should Your Money Go in Your Thirties? MoneySmart Philippines (2020)

Being in your thirties will make you realize that it’s time to get your finances in order. Unlike in your twenties where you work to enjoy and reward yourself, your thirties are more focused on working to save up for the future and meet financial obligations.

This is the time to figure out what kind of future you want to have so you can lay the groundwork right now.

There are no hard and fast rules when it comes to these things, though. But let this article give you an idea on what your financial goals should be when you’re in your thirties.

Build an emergency fund

The first thing that you should work on is your own emergency fund. If you’re still on the fence about whether you should start one with your entry level or associate level salary, just think about this pandemic. It’s a vivid example of why everyone needs one.

Most financial experts recommend having savings that will cover your expenses for a minimum of 3 to 6 months. Of course, you can always put in money for as long as you want. The more funds, the more you can use for unexpected expenses.

But how much should be in your emergency fund will not be the same for everyone. If you have dependents, then you will need to come up with an amount that will work with your budget and also help you achieve your target emergency fund amount in the shortest possible time.

If you know that you will not be jobless in the near future, then you can take advantage of this by putting away an amount that’s not too little nor too big over several months.

Whatever amount you come up with, make sure that you can easily access your emergency funds, like putting it in a high-interest savings account.

Being in your thirties usually means having more financial responsibilities and more people to support. Thus, your need for an emergency fund also grows. .

It sounds like a huge undertaking. But if you start early and do it consistently, it would be so much more doable.

Save a month or two’s worth of expenses each year in your thirties. Doing it in small chunks will not hurt your pocket as much.

Pay off debts

While you’re building an emergency fund, why not start paying off your debts too? Debts can negatively impact your financial health and your ability to hit your big goals. Like launching your own business, or purchasing a car, or renovating your parents’ home, or buying your own condo unit.

When there’s too much debt, it makes you lose the motivation or momentum to work for your goals. So the sooner you get this out of the way, the sooner you can focus on making your dreams a reality.

Achieve a good credit rating

A good credit rating can help you with loan and credit card applications should you need to get one. It increases your chances of getting approved for, say, a personal loan, or a car loan.

What goes into your credit rating, you ask? It usually includes information about your borrowing and repayments, like if you’re paying your credit cards on time, or if you have any delinquent accounts. Basically your credit behavior.

Be mindful of your due dates and late payment fees. And only spend what you can afford to repay.

Get healthcare and life insurance

If in your twenties you could get away with all-night partying or going every day with 4-hour sleeps, unhealthy food, and no exercise, it’s different in your thirties.

Your thirties is the time to prioritize good health because you will be having more responsibilities at home and at work. It will be a constant juggling task to handle a demanding career, manage a household, and raise a family.

This is the best time to have a good healthcare and life insurance coverage, not only for yourself but for your dependents. Insurance premiums are still affordable, but they will go higher the older you get. So shop around for the best packages that suit your needs, especially your budget.

Plan your future

Even if it’s not currently in the cards for you, it’s good to have plans for your future so that you can make a good and realistic financial strategy. After all, getting married, having a baby, or buying a house is not exactly cheap!

It’s a good time to start saving for that wedding of your dreams, for the down payment for your future home, for your own business, or for your child’s college education. Just because it’s not happening now doesn’t mean it’s not going to happen ever, so the sooner you save up for it, the more you’ll be financially prepared.

Think about your retirement

Even if you’re still a few decades away from retirement, it’s also a good thing to start thinking about what you want to do when you stop working and how you’re going to pay for that lifestyle.

Whether your employer has a company retirement plan or you get your own private one, it’s good to start paying for one while you’re still young and don’t have a lot of financial responsibilities.

How much you need to save for your retirement will depend on the kind of lifestyle you want to have when you retire. Fortunately for you, there are many financial advisors that you can speak to regarding this.

Final Thoughts

When you reach your thirties, it can be difficult to set aside money. The financial obligations keep growing and prices of everything never seem to drop. But you don’t need to achieve everything in the list in one go.

Simply focus on what you can accomplish now, in the next five years, and several years down the road. This will help you take care of the most important goals first before you prioritize other things. The last thing you want to do is to overextend yourself financially.

Being in your thirties is a good time to take stock of your financial obligations and financial plans. The sooner you do it, the sooner you will know where you stand financially and what you can do to improve it while you still can.