It’s ideal to invest in insurance in your 20s when you’re still young and healthy (it also costs you less). When you hit your 30s and are earning more, it’s time to reassess your coverage. Is the value of your insurance enough to cover you and your dependents, or should you top up? Put life insurance and health insurance at the top of your list. The former will ensure your loved ones will have a fallback should something happen to you, while the latter will minimize expenses should you or your family members get sick, especially with a serious illness.
Pay off your debts.
There is such a thing as good and bad debt. Good debts are those you put into buying assets that will gain value over time such as real estate or stocks and bonds. Bad debts are those you put into assets that lose value over time such as charging a big amount on your credit card with a high interest rate. No matter what kind of debts you have, though, it’s important that you have the means to pay for them. A common baseline is that only 20 percent of your annual income should go into paying for your debts.
Make yourself your biggest investment.
Your 30s is the prime time to upgrade your skills and hone yourself into a more valuable employee. Invest in training and learning so that you can keep up with the trends, raise your market value, and pave the way to a better and more financially rewarding job. Also, this way, if you unexpectedly find yourself jobless, you will have everything you need to back you up when you go combing the job market.
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