Everyone loves a glow-up. The idea that you will one day wake up as a better version of yourself is too tempting. But, as we all know, glow-ups don’t just happen on their own. You have to actively work on various aspects to make it happen.
Today we are going to focus on one of the most important glow-ups that you should aim to achieve. It’s the financial glow-up. Like most other aspects of your life, the financial decision you take in your 20s will act as a foundation for you to build on for the rest of your life. Therefore it is very important to get started on a few important financial must-haves in your 20s to be financially secure in your 30s.
Here are some financial goals that you should plan to achieve the ultimate financial glow up in your 30s:
1. Retirement planning
This is perhaps one of the most important financial goals that you should get started on. Here, the key is to get started as early as possible to enjoy the benefit of compounding and accumulate more wealth for your retirement. For you to have a solid retirement plan, you need to figure some things out first.
- Your desired age for retirement
- Average monthly expenditure you would incur post-retirement
- The kind of lifestyle you want in your retirement
- Your desire city to live during retirement
- The minimum amount you would need considering inflation
Once you have the amount that you would like to retire with, you can get started on investing a fixed percentage of your income towards your retirement. You should also increase your investment amount every time you get a raise or a promotion.
2. Health & life insurance
Health emergencies can be disastrous for your savings. Healthcare is one of the most expensive sectors in India. If you don’t plan for unexpected health emergencies, you might end up spending all your savings and breaking your investments to meet these expenses. The main reason you should start your health & life insurance in your 20s:
- Lower premium amount: In your 20s you are relatively healthy and therefore your insurance provider will not ask for a high premium amount.
- Tax benefit: Any premium amount that you pay for your health insurance is qualified for tax deductions. Therefore, you will save on taxes with this.
- More Comprehensive coverage: In your 20s, chances are you don’t have a pre-existing illness. Therefore, any illness you develop in later years will automatically get covered by your health insurance.
3. A diverse portfolio of investments
A diverse portfolio of investments that caters to your risk appetite and financial needs will secure your investments and yield good returns in the longer term. It is one of the most reliable investment strategies. A diversified portfolio in your 20s will ensure that you have a good investment base to build on in your 30s.
4. Emergency Fund
An emergency fund as the name suggests is a fund you make to fall back on in the event of any financial emergencies. Without a strong emergency fund, you will have to rely on your savings to tackle your emergency financial needs. You might even need to break your investments and lose out on the benefit of compounding to fund your emergency expenses.
An emergency fund safeguards your investments & savings as well as gives you the confidence to tackle any financial emergencies. Typically 3 to 6 months of your salary is the right amount to have in your emergency fund.
5. Multiple streams of income
This is one of the hardest things to figure out in this list. Many people might not consider this an important financial goal. But, this is the one thing that will allow for a true financial glow up and set you apart from your peers.
Figuring out a way to have more than one source of income is the key to ensuring that you don’t have to constantly work to maintain your lifestyle. Typically it is suggested that you have 4 streams of income but any number above 1 is still a good number to have in your 20s. The best stream of income is always the one that earns you money in your sleep.
The purpose of all of the above is not to one day wake up and realize that you have achieved a financial glow-up, but to take small but early steps towards achieving financial security and freedom at the earliest. Achieve your big budget financial goals with Kuvera’s goal-based investment plans. Click here to get started.
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