5 Ways to Manage Your Money You Should Learn Before You’re 30

The upcoming thirtieth birthday can be a great opportunity to put your finances in order. By applying a few simple rules, you can reduce your costs and significantly improve the condition of your wallet.

Mastering the art of money management takes a lot of time and a lot of patience. You don’t learn this skill overnight—some people take almost a lifetime to learn how to manage their budget.

And while you feel young and invincible by your 30s, the truth is that you are approaching retirement age. Thus, the sooner you learn how to manage your money, the better your financial position will be in the long run. Here are five basic financial rules you’ll need in your 30s.

1. Keep track of your budget

Many people in their 20s are vague about budgeting and track their expenses primarily through mobile apps.

However, the truth is that few manage to fit into a predetermined financial framework. The age of thirty is definitely the time to check what we spend every ruble on.

The main purpose of budgeting is to know what you are spending your money on. With this knowledge, you will be able to make more informed financial decisions. You can read more about this in books about financial literacy.

It is worth remembering that small expenses together grow together into large amounts. There is nothing wrong with spending money on interesting purchases or travel, as long as it does not violate the previously developed budget and does not harm the goals for which we are saving.

2. Save 10-20 percent of your salary

Another rule to keep in mind as you enter your third decade of life is the one recommended by most financial advisors.

When you receive your paycheck at the beginning of the month, you should know not only how much money will be spent on your fixed and variable expenses, but, above all, how much of your paycheck you are going to save.

The general rule is to set aside 20 percent of your monthly income. If you can’t save as much of your income as possible, try to save at least a tenth of your monthly salary.

3. Set realistic financial goals.

Try to calmly think about your financial goals. Consider when you would like to reach them. Write them down on a piece of paper and think about how you are going to achieve them and where you will get the money for them.

Making a list of your financial plans and developing a strategy to achieve them will make it much easier to succeed in this area.

Take, for example, holidays in warm countries. Don’t just dream, but act on it. Find out how much this trip will cost you. This will allow you to calculate how much you need to set aside every month to visit a sunny place.

The right financial strategy and the discipline of savings can get you on the vacation of your life in a year or two.

4. Manage your debts

Many people over 30 consider debt as part of their daily lives. For people paying down installments, mortgages, or credit card debt, settling financial obligations becomes a way of life. You may even find that you consider debt to be the normal state of affairs.

The truth is, you don’t have to pay your debts for the rest of your life. Assess the ratio of your debts to your financial resources. Create a budget with the primary goal of avoiding further debt.

There are many ways to reduce your financial obligations. One of the most motivating strategies is the snowball effect. Prepare a statement of your debts, from smallest to largest (excluding interest). Allocate the largest amount to pay off debt with the smallest value, while larger obligations must be paid off with minimal payments.

Paying off debt will have a significant impact on your personal finances. This will allow you more flexibility in your budget and allow you to increase your savings.

5. Create an emergency fund

If you don’t have a rainy day fund, it’s possible that you’ll have to cover unexpected expenses with your savings or credit card.

Plan to save big enough to prepare for an emergency. I recommend doing this: first, set aside three of your monthly salaries, and then six. How to do it and why? This can be done if you save 10-20% of your salary for a while. A “rainy day” fund is needed for unforeseen circumstances, for example: you were fired from work, you became incapacitated (you broke your leg, arm, fell ill with something), your wife fell ill, your children or you, your house burned down, etc. etc. There are many situations, but you need to live on somehow. Your savings will help you with this, they will help you survive unforeseen events that eat up your wallet.