Financial Planning in Your 30s: focus on wealth building

Financial Planning in Your 30s: Focus on Wealth Building 

If you haven’t started financial planning yet, I recommend you start now. Work with a financial planner so that you can look at your entire financial picture to see what steps you can take to build and protect your wealth. I can help. 

Revisit your budget. As your income grows, you’ll want to reallocate your income and possibly add more dollars to retirement investments and reducing debt. You have to think about your goals and how you’re going to finance them. Are marriage and/or children in the picture? What about home ownership? How will you pay for these? Your budget is the best place to start because without proper planning your money can be frittered away before you have anything to show for it, and your goals will never be accomplished. You may have immediate goals that you want to accomplish soon such as a down payment for a house, but don’t forget about longer range goals such as saving for retirement and kids’ college funds. 

Be sure you have enough insurance. Are your assets properly insured against loss; have you reviewed your life insurance, auto and liability insurance with your insurance agent lately to make sure that you’re properly insured and that you are getting the best rates? 

Continue to reduce debt, particularly on assets that are depreciating in value, especially high interest rate credit card debt.  

As your income and living expenses increase, you’ll want to increase your emergency fund to cover three to six months living expenses.  

Make sure you are contributing to your retirement fund. Many people’s retirement funds are way underfunded. To ball park how much you should be saving, go to my website and find the retirement calculator.  

I’ve talked about the 50/20/30 rule of thumb. 50% of your income goes to necessities such as food, clothing, shelter, etc., 20% goes to financial goals such as savings, debt reduction and investments, and 30% to discretionary spending. Once your emergency fund is fully funded and your non-mortgage debt is zero, then you can put more into your investments and retirement fund. You might want to start with 10% of your income to retirement funds and investments and increase it to 20% as your other financial goals are accomplished. 

If you’re working with a financial advisor, make sure you meet regularly with her or him to go over your investments and review your asset allocation and risk levels to make sure you’re properly diversified. I can help. 

If you do your financial planning goals one step at a time, you’ll find that you eventually get it done!