Want to start financial planning in your 30s? Here’s what you need to know

With the onset of a cost of living crisis and in the wake of a once-in-a-generation pandemic, long-term financial planning may not seem like a priority.

But the current economic turmoil is an all too real reminder of the importance of preparing for the future, whatever your circumstances.

It’s also a common belief that financial planning is just for later in life when thinking about retirement, but that’s not the case.

Preparing for the future: Your thirties can be the perfect time to plan

It’s never too early to start planning for your financial future. And the good news is that you may already be doing it: if you contribute to your workplace pension plan or have an Isa, that’s financial planning.

But what else should you consider? We spoke to experts to find out what financial planning in your 30s might look like and how you can approach it.

Is it ever too early to start wealth planning?

While it’s never too early to start financial planning, that doesn’t necessarily mean it’s always the right time.

Carla Morris, financial planner at Brewin Dolphin, says that before you hire an advisor, you should consider what you can afford to put aside.

Start by reviewing your expenses and where you could spend less and save more.

If you find you have money to put aside, it pays to start saving and planning your finances early. You can start earning compound interest, and your longer-term outlook will give you room to take on more risk.

If you start saving later in life, you are less likely to undertake riskier investments, which can offer higher returns, because you want a safe haven for your funds. But with more time, you can afford to take greater risks for the chance of higher returns.

How much do I need to earn to start planning financially?

There is no one-size-fits-all approach to wealth planning, as everyone’s situation is different.

The lifestyle you want to have in retirement and how long you’ll need your retirement income for will play a huge role in how much you need to save, says Jenny Holt, Managing Director, Client Savings and Investments at StandardLife.

A good benchmark for this calculation is the standard of living in retirement, which gives you a rough idea of ​​what you might need per year to reach a minimum, moderate or comfortable standard of living in retirement.

Set standards: Retirement living standards are a benchmark for how much retirees might need to save, depending on the lifestyle they want to achieve

Set standards: Retirement living standards are a benchmark for how much retirees might need to save, depending on the lifestyle they want to achieve

For those who feel they don’t have enough to begin long-term planning, there are also shorter-term options such as budgeting and saving for an emergency fund.

These can be a great starting point to give you a financial safety net. The key, Morris points out, is just getting started.

How to find a good financial advisor

You need to make sure you’re getting what you pay for when seeking professional advice, says Robert Gout, Certified Financial Planner at WH Ireland.

Many young savers turn to other sources of information, such as websites and podcasts, so it’s worth researching what information is already available for free before paying for advice.

However, if you decide you want more personalized financial planning advice, Morris says, asking friends and family for advisor recommendations might be a good place to start.

Alongside someone who understands your situation, for example if you are a small business owner or have a job with seasonal peaks and troughs, you ideally want someone you get along with but who is willing to ask you tough questions and force you to be realistic.

Many financial planners offer free initial meetings, so be sure to take them to learn more about their services — and don’t be afraid to ask questions.

Even if you don't have enough cash to make an advisor worthwhile, setting aside a small amount each month and contributing to your pension can give your financial planning a boost.

Even if you don’t have enough cash to make an advisor worthwhile, setting aside a small amount each month and contributing to your pension can give your financial planning a boost.

“Some of these things you might find difficult – but that’s the point – look out for your best interests and help you avoid costly mistakes,” adds Dawn Mealing, head of advisory policy and development at Fidelity International. .

You should only work with an adviser who is licensed and regulated by the Financial Conduct Authority, which means they have the required qualifications.

It also ensures that you are covered by the Financial Ombudsman Service and the Financial Services Compensation Scheme should something go wrong.

You can find a list of regulated advisers on the FCA website.

What should I plan for when I turn 30?

Breaking down what you can afford to save or invest is the first step, says Morris.

After that, it’s a good idea to look at the benefits you receive through work, such as your pension or private health insurance. Do you have the ability to mix and match things like vacation insurance and life insurance?

Often in their thirties, it makes sense to protect themselves against job loss in addition to life insurance. Unemployment coverage can be critical.

After that you should think about what you want to achieve with your money, for example do you want to be able to buy a house in five years, or do you focus on maximizing your pension? And how can you best balance those future goals with what you need now?

You may have to decide for yourself how much of your disposable income you are willing to sacrifice in order to save for the future.

Ensuring that you make the most of tax-efficient products such as stocks and shares ISAs, as well as the tax savings from your pension, can help you achieve long-term financial goals.

It is also worth considering which companies you want to hold your savings or investments with.

A study by Standard Life found that more than half of younger generations – 53% of Gen Z and 51% of Millennials – believe their money should be invested sustainably, compared to just 36% of baby boomers.

ESG investing, such as buying green bonds that fund environmentally positive projects, provides options that help you support your future while doing good. A win-win.

Some links in this article may be affiliate links. If you click on it, we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any business relationship to affect our editorial independence.