In your 30s you're suddenly expected to just know how to make huge life-changing decisions involving your money.
From budgeting for a wedding to saving for big-ticket items like a car or taking your first step onto the property ladder, most people feel unprepared for these 'big spend' moments. Particularly when you throw in the current economic climate and its impacts on employment.
It can be hard to plan ahead, but it doesn't mean we shouldn't try. So, we spoke to Virginia Marshall, the Chief Financial Officer of SocietyOne, to help narrow down the absolute 'need-to-knows' about money in your 30s.
Marshall has more than 20 years' experience in finance and banking, and joined SocietyOne in 2019. SocietyOne is Australia's first peer-to-peer lender, so they offer low rates on personal loans. Based on your credit history, they have personalised rates that can be much lower than the big banks and help you save on interest. Which is good news if you've got a wedding, car, home reno or even a holiday in your sights.
From how to turn around a bad credit score to consolidating your debt without living like a pauper, here's what Marshall had to say.
RULE #1: Make a budget and use it to track your spending.
The simplest tip first. Marshall said it doesn't have to be anything fancy - a budget could be an old-school Excel spreadsheet or even a note in your phone or an app. But it's always a good idea to have one.
"Allowing for some fun in your budget will also help keep you on track and avoid a blow-out purchase (we've all been there)," she said.
"A nifty trick to saving money is checking out all of the subscriptions and direct debits you have and cancelling all the ones you don't use or need."
RULE #2: Focus on percentages rather than amounts when you're budgeting.
Doing this where ever possible will make it easier to stick to your budget, said Marshall. Especially if you've been impacted financially during COVID-19.
"For example, if your income has been reduced by 20 per cent, then your 'eating out' kitty should be reduced by 20 per cent," she said.
"It's also a great time to be a savvy shopper with so many great sales, so if you are already in the market for something, now could actually be a good time to buy it."
RULE #3: Start saving today. The sooner you do it, the better.
Learning how to save money is a skill and it's habitual. So it might take a little time to master but when you have a decent chunk of savings in your bank account, you'll thank yourself later, said Marshall.
"Think about what you're spending your money on, too," she suggested. "Spending your hard-earned savings on travel (outside of 2020) is something few regret… buying a designer dress you'll wear once for a party though? Maybe."
RULE #4: Understand how you get a bad credit score, and how to rectify it.
If you're not sure what your credit score is, you can find out for free with providers like SocietyOne. They will also tell you what might have impacted it so you can do something about it. Once you've fixed any issues, Marshall said it's important to maintain your score by doing three things.
"First, pay your bills and repayments on time, every time," she said. "Then be careful when shopping around for credit. Sometimes simply enquiring for credit will create a record on your credit file, even if you don't end up progressing with the credit or loan."
Finally, try to keep multiple types of credit to a minimum. "If you have a lot of different cards and loans, it might be worth consolidating these," Marshall suggested.
RULE #5: Consolidate your debt, it will make you feel much more in control of your finances.
Consolidating your debt doesn't always mean you have to live frugally. By pooling what you owe, Marshall said you might actually end up with some more disposable cash.
"You will only have one single payment to worry about, so not only does budgeting become much easier, but you may also save on interest and have lower regular repayments," she said.
RULE #6: Know how much you have to spend on a 'big item' and stick to it.
Whether it's buying a house or a car, Marshall said if you don't stick to your budget, you could experience budget creep which could lead to 'buyer's remorse'.
"Understand all the costs involved, for example, car registration and insurance. You should also keep in mind future costs such as servicing to ensure that you can afford the upkeep of your purchase," she said.
"If using credit or borrowing to cover the cost of a big purchase, it's important to understand how long it might take to pay it off. Ensure you calculate the total interest and fees you'll need to pay and weigh up whether the item will still be of value to you by the time you've paid it off."
RULE #7: Decide between the 'must-haves' and 'nice-to-haves', based on your budget.
Marshall said this can be easy to do when you're planning something with lots of moving parts, like a wedding.
"Remember though, if you spend a little more than planned on every single element, it's going to add up, and before you know it you may be spending outside of your means," she said.
"Get the big-ticket expenses and the elements that mean a lot to you sorted first, then you know where and how much you might need to compromise on the 'nice to haves'."
RULE #8: Weigh up the pros and cons before you make a purchase.
Managing your finances can sometimes feel overwhelming, but there are steps you can take to feel more confident in your decisions.
"Have a plan and budget, do your research and weigh up the pros and cons. Once you break everything down, it makes the task much less daunting," Marshall said.
"If you know what you have to spend, you've done your research to ensure you're getting good value and are sure that the purchase will add value to your life, then you have nothing to lose."
What are the best 'money rules' for your 30s? Tell us yours below.
Visit societyone.com.au for more info on personal loans, credit scores, debt consolidation and more.
SocietyOne Australia Pty Ltd holds Australian credit licence no. 423660.
Feature image: Getty/Mamamia.