How to improve your finances as you head into your 30’s

It seems that our 20’s are often occupied by ‘going out and living life’. These early years of adulthood can be the time when the vast majority of people waste the most amount of money and seemingly bury their heads in the sand when it comes to matters concerning our finances. The gift of being young leads a lot of 20 somethings to concentrate on the here and now and as such spend their money as quickly as they earn it. This is fundamentally not something new and most young adults will behave in such a way at some point or another but as we mature out of our 20’s and head quickly towards our 30’s, the true state of our finances becomes an ever-present focus in our minds. Given the fact that by time our 30th birthday arrives the vast majority of us will have been in full time employment for as long as a decade, this is often the time that we start to consider where our finances have been spent. It is also around this time that we start to consider putting down roots financially and therefore look to have more concrete plans in place for our futures. To achieve this there are lots of different ways we can improve our spending habits as we enter our 30’s and in doing so start building upon a more financially stable future. Today we will be looking at some of the ‘must do’ things someone in this position should consider and just how easy in reality they are to put into place.

First and foremost the quickest and most easy step to take is to stop the continuous spending habits you have developed throughout your 20’s. Where you may have thought nothing of spending £100.00 on a single alcohol filled night in the past, consider that just one of these monthly is costing you an eye-watering £1200.00 each and every year. When you further consider that if this amount was instead saved monthly, in the 10 years which make up your 20’s you could in actual fact have saved a massive £12,000.00. The maths here speaks for itself but the key point is that your spending habits in your early 30’s should be much better considered and whether this is expensive nights out, clothing sprees or shoes, stopping such habits will only help to line your pocket further down the line. One of the best ways to better control your spending habits is via the use of a monthly budgeting plan. A budget will not only indicate how much you are spending versus income each and every month but will also present an excellent opportunity to truly understand where you are really spending your salary and furthermore, where savings and reductions in spending could and should be made. To highlight just one example of common excessive consumer spending let’s look at coffee. The popularity of coffee shops has rocketed in the last 5 years with thousands of consumers making a coffee purchase part of their daily routine. Given the fact a medium Latte will set you back up to £3.00; in a year that’s a minimum of an extra £720.00 saved.

The start of your 30’s also needs to be the time when real focus is given to the general state of your finances and this means addressing any outstanding debts you may have. Whether this is a credit card bill, loan or hire purchase agreement; reducing these debts as quickly as possible is absolutely key. Whether this means making cuts on general spending or allotting previously saved funds to reduce the total bill; take whatever steps are needed to reduce your debt. All debt carries interest so whilst ever repayments are being made, not only are you paying interest but reducing the amount of money which could be invested in your later life. Hand in hand with reducing your existing debts come the next to start effectively saving for your future. This means having a committed savings plan, linked to your monthly budget and is therefore accounted for like any other ‘expense’ you repay. There are plenty of different ways to save money and range of different savings schemes on offer with the major high street banks so be sure to shop around and find the most suitable option for your individual circumstances. As well as a general savings account, if you haven’t already done so, now is the time to start investing in a regular pension. Again, there are plenty of different pension options which are available, so seek advice and more a well informed choice.

 

Representative Example: Representative 1286.98% APR on a loan of £300.00 with 5 monthly repayments of £101.03 Total amount repayable £505.13 Annual interest rate (fixed) 290%

Warning: Late repayment can cause you serious money problems - For help, go to moneyadviceservice.org.uk

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Author: Internal Customer Services Agent