Putting down roots
When you hit your thirties, you’ve been around the block a few times, and maybe even acquired a few miniature versions of yourself along the way! You’re used to standing on your own two feet and thinking ahead now.
The biggest priority, or aim, for the average thirtysomething is buying a house. It’s very possible right now, with low interest rates and stagnating prices, but the flipside of this is that banks and other mortgage providers have tightened up their criteria for lending. The best thing you can do for yourself is to have a big deposit ready.
Aim for at least 15 per cent of your price range, and prepare to work your way up the ladder slowly. Do not take on more bricks and mortar than you can pay for. You shouldn’t pay more than one third of your net household income on your mortgage. This rule is in place for a good reason.
Clear the decks
It’s also important to get rid of any old debt that’s been hanging around – student loans are a good example. They’re a small, but persistent drain on your monthly income. Once you’ve cleared debts, start using the money you’re saving to build up an emergency fund or house deposit fund. Emergency funds are as vital as food and bill money. If you don’t have this cushion, you may find yourself having to take out a payday loan from Wonga.com to fix your boiler. Of course Wonga.com products are a last resort, but that’s what happens when you don’t have your financial safety belt on!
You might have started saving for your retirement in your twenties, and your thirties is the decade to start looking at the numbers properly and diverting more of your income into this vital pot. Try to get 15 per cent of your income stashed away – whether it’s all your own or whether it’s split between you and your employer.
If 15 per cent seems steep, you’re doing something wrong and you need to look for ways to cut back. This is why you should pay off costly debts and take out a reasonable mortgage!
Take your time
Don’t wait until your forties to start saving – you’re using compound interest to grow your money, and this process needs time. If you start saving for retirement in your forties, you’ll need to skim off more than 15 per cent each month!
Speaking of retirement and old age – what about your will? Life insurance? You probably have a spouse, and are either thinking about having, or already have children. A cheap life insurance policy – at least enough to pay off the mortgage – is an essential just in case the worst happens.
Wills for younger people aren’t just about leaving your priceless (but hideous) heirlooms to your grieving relatives, they’re also about making care plans for children. To whom do they go? How will these guardians pay for their upkeep and education? These are important questions that you need to nail down while alive!