Investing in your 30s – time to settle down?

Once you hit your 30s, the worries of your 20s such as graduating, starting a career etc have been replaced with more domestic concerns. You might be settling down, taking on greater financial responsibilities such as getting married, buying a home, starting a family, and so on. Until now, you’ve probably been saving for a house, and other shorter-term savings goals. Essentially, the right investment strategy to reach your goals shifts as you age.

As well as adjusting your budget to accommodate for the changes in your life, it’s also a good time to increase savings and pension contributions and begin investing for any children, should you have a family.


Investing for children

As a parent, you naturally want to provide your children with the best possible life, including a strong financial foundation. Investing even a small amount regularly on behalf of your child can yield significant benefits due to the power of compounding returns. This can help your child achieve important milestones in life, such as paying for university or moving out on their own, with greater ease.

If you’re considering an investment for your child, a stocks and shares Junior ISA (JISA) is an excellent choice. Investing in the stock market over the long term has historically yielded higher returns than a traditional savings account. JISAs have an annual allowance of £9,000, and any growth or returns are tax-free.

While it’s best to start investing early, it’s never too late to begin setting aside money for your child’s future. For younger children, a JISA is a long-term investment since the money cannot be withdrawn until the child turns 18. While only parents or guardians with parental responsibility can open a JISA, once it’s active, grandparents, other family members, or friends can also contribute.

Plan for the worst, protect your best

During your lifetime, you and your loved ones may encounter unforeseen and even unpleasant situations that could be financially devastating if you are unprepared.

The first step towards preparedness is getting adequate insurance coverage — that could be home, life, car, and sickness insurance. Life insurance is essential for most people with a spouse, partner, or children, and term life insurance is generally a better option than permanent life insurance. Disability insurance is also important to protect you in case an injury or illness prevents you from working.

The next step is to create a will to safeguard you, your family, and your assets. If you have young children, an estate plan is crucial because it allows you to name a guardian for them in case of your death. Otherwise, the decision of who will care for your children could be left up to the state.

Accelerate your savings

During your thirties, many of you rely on savings to reach various objectives. These goals may include using the money for specific milestones, such as purchasing a new car, renovating a house, or getting married. Alternatively, you may wish to increase your monthly savings contributions.

To achieve these goals, several options are available. For those who have the means to set aside funds for a longer period, long-term investment accounts, such as stocks and shares ISAs, could be a suitable choice. And if you receive a promotion or bonus at work, it may be worth considering this option.

Funding retirement

Retirement may feel like a long way but it’s worth thinking about it now. The average retirement age in the UK is 65.55. But here’s something to bear in mind — you’re probably going to work 40 years and you’re probably going to spend 50 years in retirement. That means that during your working life, you need to save enough to cover your retirement life.

Scary, right? Therefore the sooner you start, the better.  Hopefully, you have a workplace pension and you are building up savings for your retirement, and your contributions will benefit from tax relief. Many employers will also match your contributions, which can be a significant boost to your retirement savings.

A good rule of thumb is to make sure you increase the amount you contribute to your pension every time you get a pay rise or a bonus — so if you’ve decided to contribute 10% to your pension, make sure that you increase your pension contribution every time you get a pay rise. Remember, the trick is to start early and stay invested.

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