Important Financial Information Everyone Should Know Before They’re 30
Financial literacy is something that’s never given the attention it deserves. We go to school to learn about many things but very few instances are we taught about money and how to manage it.
It is important to start learning about money at an early age. This will make it easy to avoid simple financial mistakes.
For instance, you can start by teaching your children simple financial concepts such as saving when they are still young. They will never forget such important lessons.
Let us take a look at some of the important financial information that everyone should know before they clock 30.
Always stick to a budget
By the time most people get to their twenties, they will probably have heard a lot about budgeting. Some will probably have even used budgeting apps.
However, not many people understand the importance of sticking to a budget – many start only to give up along the way.
However, before you reach 30, its time to get into serious business. You need to know how every dollar is being spent. For example, if your budget for entertainment is $200, then anything above that should be counted as a debt.
The main purpose of a budget is to track your expenses to help you make sound financial decisions.
Insurance covers
Insurance is never taken seriously until a tragedy strikes. Take for example medical insurance. If you don’t have a medical cover your hospital bills can be more than double compared to someone who has medical coverage.
Whether you have formal employment or not you ought to understand how insurance policies work. For instance, you should know what an insurance premium is by now.
Having a life insurance cover will protect you and your loved ones in case of emergencies such as accidents or death.
Financial goals
What are your personal financial goals? Before you are almost 30 years, you don’t need anyone to tell you about financial goals. You need to sit down and evaluate your finances – then come up with SMART goals.
This implies writing down goals that are specific, measurable, attainable, realistic, and time-bound. You should, therefore, learn to make sound financial goals – both short-term and long-term.
The best way to know if you have attained your financial goals is to constantly review them. It can be quarterly or annually – depending on your goals.
The culture of saving
Saving is one of the most important elements of financial freedom. You should develop the culture of saving at an early age – such that by the time you approach 30, it’s part of who you are and how you think about the future.
The best way to save is to cut down on all unnecessary expenses and channel that money to a savings account. The culture of saving is a sign of financial discipline.
Debt management
At some point, you will be forced to borrow money through different lending options. If you are not careful, you will become financially crippled – because of debt enslavement.
That’s why it is important to learn how to manage your debts early in life. It is not a sin to borrow, but it is good to ensure that you understand how to manage your debts.