A young man who has hit 30 sometimes face different sort of pressures especially on how to make money.
At 30-sonething you should have graduated and probably seeking for your dream job. You start thinking of how much you should be having in your savings account or investment account.
Ironically, people who are already at the third decade of their life have the wrong perception about money. These preconceived notions and wrong views about money will have to be altered.
Studies have shown that most twentysomethings fail at answering fundamental questions about stocks, mutual funds, and interest rates, and fewer than 40% of workers in their 20s participate in employer retirement plans.
However, here are some of the 8 facts about money everybody at 30-something should know. The insight about money will serve as a guide for you to reach successful financial goals.
Cash grows exponentially over time
The power of compound interest is magical. The earlier you start thinking about long term investment the chances you have to start ripping off the benefits.
“There’s no progress without action, and you at least know that getting started leads to compound interest.
So, it’s much more important to take steps toward learning more on your money journey than to wait until you feel like you know everything.”
You can easily lose money
You have seen people ask themselves, where is my money going? I have spent all the money. That is one of the mysteries about money. If you are the type that doesn’t keep a journal that details what you earn and what you spend, it becomes difficult.
When you keep track of what you earn and spend, your memory retains the cash flow, and that’s a good way to start before going beyond thirty.
Budgeting is paramount
Most people fail to understand that budgeting is one of the keys to having a successful financial life. When you to have a budget, it leads to impulse purchases. When the budget is there and you make frantic effort to stick to it, it makes more sense than having it and not sticking to it.
You can have an envelope based budget or the 20/80 financial rule. Try the one that will work for you and stick to it.
“Envelop based budget” is when you use cash for different categories of your budget and the money is kept inside an envelope. Let’s say; you earn $500per month when you receive the cash, you take let’s say, $90 and out inside an envelope and title it “Groceries”. That way, you know that such an amount has been allotted to groceries.
On the other hand, the 20/80 rule means to put 20 percent of your income towards savings and spend the other 80 percent on everything else.
Having kids cost money
Bear in mind that the process of childbearing, nursing and training will take away a huge part of your budget. You should have anticipated this before getting involved in the process.
When you anticipate this, it becomes flexible for you after you must have planned.
Retirement plan
The focus for people turning thirty is usually about the present and rarely the future. Have retirement goals. Start saving for it; it is late to start doing that.
Inflation
The truth is that inflation is arguably inevitable; hence keeping your money in the bank or your house is useless. Money loses value over time, and that’s a big mess when you have a large chunk of it doing nothing in your bank account.
Investing will save you the pain caused by inflation because as time goes by the money you have will have lesser purchasing power.
Liquid asset
Understanding the importance of having a liquid asset is good. A liquid asset is something that can be quickly turned into money. You obviously need a liquid asset in times of emergency. Money is already a liquid asset, while a landed property is not. It takes a bit of time to turn such into a liquid asset
Conclusion
Those are the few things you need to understand before turning 30; there are many other concepts you need to know about money before you turn 30
