What to do with your finances before you turn 30

Number 30 is significant when it comes to age – a milestone. From then on you are expected to take wise, mature decisions about life. But waiting until 30 to start money management is not a good idea. There are a few moves you need to make before you reach turn 30 to ensure you are on the right track financially.

Today’s ET Wealth report says there are obvious advantages of starting money management early and the power of compounding works in your favour, if you are an early starter and not a late bloomer.

1) Buy term insurance: Life insurance should be the first priority as per the report, because you land up paying lower premium amounts when you start early in life. But do buy term insurance plan, since this type of insurance cost the lowest. Ensure you buy a policy that covers your life until 60 years.

2) Buy health insurance: Don’t depend on your employer’s health insurance policy alone, ensure you buy yourself an adequate health cover. Again, the sooner you begin the lower the premiums.

3) Open a PPF account: Without a doubt public provident fund is the most tax effective debt investment option today. And the sooner you open a PPF account the better. Maximise your investment every year. The magic of compounding will give you a large corpus on retirement.

4) Automate investments: To ensure that you are disciplined with investments, use the automated investment route, set SIPs and ECS mandate whenever possible. Make the most of technology to invest regularly and never miss a payment.

These are a few tips from the report. Read the entire report here.