How to be financially savvy in your 30s

8 August 2019

How to be financially savvy in your 30s

Smart money steps to take in your 30s

Your 30s often bring big decisions and new responsibilities – but this stage of life can also be an opportunity to set up your future wealth. So, we have sourced some tips for you, to help you make smart money decisions.

Kickstart your retirement savings

While paying off debt might be a priority right now, especially if you have taken on a mortgage or are trying to get rid of the student loan, even a little bit saved now will pay dividends down the track.

The power of compound interest means that what you put away today will earn interest on interest for many years to come. Utilising the benefits compound interest can offer sooner, rather than later, may mean that you don’t need to put as much money away for your retirement later on in life.

Whether you are using KiwiSaver, or another retirement fund to tuck your money away, relook at your budget and see if you can increase what you are putting away, even just a little.

Pay off the credit cards

While increasing your retirement savings will reap benefits, so too will paying off the credit card. Make sure you are paying off more than the minimum payment each month and put the card ‘on ice’ as soon as you have made your payment.

Paying off a bit more means you can save on the interest and get debt-free sooner, having more money to put towards your retirement, reduce the mortgage quicker or tick something else off your wishlist.

Start – or build on – your emergency fund

Your emergency fund is there to help you get through an unexpected financial challenge, without dipping into your long-term savings or funding the cost with credit.

The standard rule of thumb is to have three months of salary put away in an easily accessible on-call savings account. Your emergency fund can give you financial peace of mind when the unexpected crops up – whether it’s a major car repair or sudden house maintenance costs. It could even fund a wait period or excess on your insurance, helping you save a bit on premiums.

Protect your assets – and yourself

In your 30s, your most important asset is your ability to earn an income. If you were off work due to illness or injury, and your income suddenly stopped, what would happen to the mortgage, retirement planning and the day-to-day costs? If you have an emergency fund, it will get you through for a bit – but what then?

Find out about the options you have to protect your financial lifestyle, as well as protecting your more tangible assets, such as the car and the house.

Set up your Will

Your 30s often bring more assets. But would they go to the right people, should the unthinkable happen to you?

Without a Will, your assets get distributed according to the Law, rather than how you (or your loved ones) want them to be. Not only that, but if you die without a Will, it can take longer for your assets to end up where they should be, which could cause your loved ones financial stress in an already stressful time.

Take away the uncertainty by putting in place your Will. If your needs are relatively simple, it may not cost as much as you think – and the peace of mind it offers is priceless. While you’re getting your Will sorted, make sure you put in place Enduring Powers of Attorney as well; this allows someone you trust to make decisions on your behalf when you’re unable to.

Being financially savvy in your 30s isn’t just about what you do with your money. It’s about how you grow and protect your finances as well. Meanwhile, if you decide that a personal loan could help you get your finances in order, talk to the team at AA Finance about your needs. Contact us on 0800 500 555, seven days a week between 9am and 5pm. We’re here to help.

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Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure the content is correct, the information provided is subject to continuous change. Please use your discretion and seek independent guidance before making any decisions based on the information provided in this article.

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