5 things to do before turning 30 years old
1. Establish financial goalsMake a decision as to what you want and where you want to be in the future. Categorize financial goals into short, medium and long term. They can also be divided into needs and wants.Examples of short-term goalsBuying a new carPlanning for your weddingGoing to graduate schoolExamples of medium-term goalsHaving childrenBuilding a houseStarting a businessExamples of long-term goalsSaving for retirementBuilding a vacation home (second, third homes etc)
2. Create an emergency fundDetermine how much funds will be needed to put aside as an emergency fund. It is recommended to set aside money equivalent to 3 to 6 months of living expenses. This is money that will come in handy in case of a financial emergency such as unexpected medical expenses or loss of a job.
3. Start investingStep number 2 above should be completed before thinking about investing. Investing provides for additional income to supplement income earned through a salary or through regular savings accounts and helps start the process of wealth building.
4. Start saving for retirementAn average person will need approximately 70% of pre-retirement income to maintain the same standard of living after they stop working. For example if Samson (a single person) is currently earning Tshs. 500,000 per month he will need Tshs. 350,000 per month during retirement in order to maintain the same standard of living. Pension money alone is not enough to cover this need. An average person will likely spend about one third (1/3) of their life in retirement.
5. Take calculated risksMost investments do better when held over longer periods of time therefore start investing early (at a young age). Know your risk tolerance level. People in their 20s have more time to try new things and definitely more time to recover from mistakes compared to when one is older and surrounded with more responsibilities.
Source: TanzaniaFinancials
2. Create an emergency fundDetermine how much funds will be needed to put aside as an emergency fund. It is recommended to set aside money equivalent to 3 to 6 months of living expenses. This is money that will come in handy in case of a financial emergency such as unexpected medical expenses or loss of a job.
3. Start investingStep number 2 above should be completed before thinking about investing. Investing provides for additional income to supplement income earned through a salary or through regular savings accounts and helps start the process of wealth building.
4. Start saving for retirementAn average person will need approximately 70% of pre-retirement income to maintain the same standard of living after they stop working. For example if Samson (a single person) is currently earning Tshs. 500,000 per month he will need Tshs. 350,000 per month during retirement in order to maintain the same standard of living. Pension money alone is not enough to cover this need. An average person will likely spend about one third (1/3) of their life in retirement.
5. Take calculated risksMost investments do better when held over longer periods of time therefore start investing early (at a young age). Know your risk tolerance level. People in their 20s have more time to try new things and definitely more time to recover from mistakes compared to when one is older and surrounded with more responsibilities.
Source: TanzaniaFinancials
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