Should you create a financial plan in your 30’s?
It’s probably fair to say that not many people in their 30’s think about having a financial plan. A lot of financially minded people might think about their finances on a regular basis and be in control. But that’s not the same as having a plan.
In my experience of talking to clients, your 30’s is an important and challenging time. In work you combine the experience and knowledge built up in your 20’s with the energy of youth to make you an ideal employee. That means these could be good earning years. However, it’s also the time when you might be settling down, getting married, having babies buying a home and generally laying down some real roots.
So there is lots going on in these 10 years and that’s probably why your 30’s, more than any other decade, is the time I hear about the most where people say .. ‘it just kind of went by’. When people talk about wanting to save for retirement in their late 30’s or early 40’s they do so with the experience of having wanting to do it 10 years ago, never got around to it, and before they knew it … all those years just flew by. It happens!
So having talked to lots of people in their late 30’s and early 40’s about how they should have started saving and accumulating wealth earlier, my advice to anyone in their 30’s is to have a plan.
The obvious question is, what is a financial plan? The good news is that it has little to do with money, at least initially. The first thing you want to do is look in to the future and think about what you see. What do you want to achieve, own and experience over the coming years and then into retirement? That could be personally, professionally or financially. Start putting some ideas down.
Once you’ve built up a bit of a picture, you can start to think about what you’ll need to do to make those things become reality. If that involves money somewhere along the line, then think about how much, when and in what form (e.g. income or assets).
If you know what you need financially to make the personal and professional goals happen for you, then you can then start to work backwards and think about what you need to be doing now to make those very first steps towards those goals.
Getting plans in place now, really is the only way to make happen what you pictured for yourself in years to come. And that, is how you make a plan for yourself in your 30’s
Jaskarn Pawar is an Independent Financial Planner at Investor Profile. Based in Northampton, his team provide Financial Planning Advice to clients throughout the UK.
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