Becoming a financially independent adult in your thirties is a thrilling yet challenging time in any Canadian’s life. On top of the demands of work and family, you’re expected to pay your bills on time, avoid debt, and build savings accounts. For young Canadians, it can feel like an unwinnable challenge.
While it can all seem daunting, there are easy and effective ways to manage your finances without added mental and emotional stress.
Outline Your Goals
Before you make any financial declarations, you’ll want to make sure you have a clear picture of your finances. Whether you prefer to outline your income and expenses on a standard spreadsheet or through a mobile budget app, finding the tool that fits your lifestyle is the first step.
Your fixed expenses — rent, utilities, outstanding payments — should take precedence over your variable costs, often categorized as entertainment and social activities. Once you’ve allocated your money to your bills and savings, you can decide how you want to enjoy the rest of your income.
Cut Costs Where You Can
While it’s never easy to cut down on the luxuries you enjoy, certain expenses can unnecessarily eat away at your budget. If you’re paying for multiple subscription services, consider choosing a favourite. If you’re eating at restaurants often, try cooking at home using several easy and affordable recipes. That coffee you purchase every day could go into a savings account, where it’ll procure interest and earn you more money at the end of the year.
Manage Any Debts
In your 30s, accumulating debt is easier than most adults anticipate. How you navigate your debts in the present will impact the future you’re able to afford.
If you have disposable income after you’ve paid for your living expenses, consider making more significant contributions to your higher-interest debts. Often, it takes consolidating your debts to get a better handle on your situation. Reaching out to online lenders like the experts at FlexMoney could be the more efficient starting point — unlike traditional lenders, the drawn-out application process isn’t a factor. You have more control over the type of loan you acquire.
Build an Emergency Fund
Emergencies can happen at any time, and when they do, you’ll want to ensure you’re prepared. A crucial part of your monthly budget should include setting aside money in an emergency fund. Whether it’s an unexpected medical cost or an urgent repair in your home or apartment, this fund will save you significant trouble in the long-run.
The average Canadian’s emergency fund falls between three and six months of savings — this will ensure that if you face a sudden job loss or an urgent expense, you have the funds you need to take care of the problem swiftly and without harming your budget.
Prioritizing investing can be a challenge for Canadians in their 30s — with the demand for careers, families, and social responsibilities, thinking about retirement and future financial goals often falls to the wayside.
The earlier you start building an investment portfolio, the more money you’ll accumulate over time as you compound interest. Typically, financial experts recommend saving between 12 and 15 per cent of your salary to ensure a healthy retirement fund. If your employer has a plan of their own, consider joining their program in addition to your personal contributions. The more capital you can contribute while your expenses are minimal, the more you’ll be able to enjoy your retirement.