Turning 30 is a significant milestone in life, and it often comes with increased responsibilities. At 30 you are probably done with schooling and for those lucky enough they are early in their career.
Making smart financial moves at this time can make or break your long-term financial success.
Here are five key financial moves you should consider making before turning 30,:
1. Build an emergency fund
Life is unpredictable, and unexpected issues and crisis can arise at any time. Having an emergency fund ensures that you have a financial cushion to cover unforeseen costs such as medical emergencies, job loss, or urgent home repairs.
Without one, you may be forced to rely on loans, which can slowly push you to a cycle of debt..
For example, imagine losing your job unexpectedly. If you have three to six months’ worth of living expenses saved in an emergency fund, you can comfortably cover rent, utilities, and food while searching for another job.
To build an emergency fund, start by setting aside a small percentage of your income each month in a separate, easily accessible account.
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2. Start investing early
The power of compound interest makes investing early one of the smartest financial moves you can make. Investing allows your money to grow over time and helps you build wealth in the long run. The earlier you start, the more time your money has to grow.
Consider options like stocks, money market funds, government bonds, and real estate investments. Also, setting up a retirement savings plan, such as a pension fund, can provide financial security in your later years.
Saccos have also become safe investment platforms and can also serve as avenues for quick loans.
3. Pay off debt
High-interest debt, especially from personal loans, can quickly spiral out of control if not managed properly. The longer you take to clear such debts, the more you pay in interest, making it harder to achieve financial stability.
To avoid this, focus on repaying high-interest debts first. You can use the snowball method, where you pay off the smallest debt first while making minimum payments on others, or the avalanche method, which prioritises debts with the highest interest rates.
Becoming debt-free earlier allows you to redirect money toward savings and investments.
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4. Develop multiple income streams
Relying solely on a single source of income can be risky, especially in uncertain economic times. Having multiple streams of income provides financial security and increases your earning potential.
For example, if you work a full-time job and also run an online store selling handmade jewellery, you have an additional source of income. If one source of income is affected, you still have another to fall back on.
Other income streams include freelancing, side hustles, investing in dividend-paying stocks, or renting out property.
This is also the time to turn your hobby into something you can commercialise, for example if you love crocheting, you can work on fits you can sell.
5. Master budgeting and smart spending
Understanding where your money goes is crucial for financial success. Without proper budgeting, you may end up living beyond your means and struggling financially. A budget helps you track your income, control expenses, and prioritise savings and investments.
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A clear budget and tracker enables you to identity areas to cut costs, areas to pump more money and even areas to stop financing at all.
This is comes in handy when you are in a crisis and you need to make adjustments, you can easily point to areas you want to fix.