What does financial freedom mean to you? Having a well-paid job? Opening a savings fund? Pay down bills regularly? Your priorities might be different, but surely if you’re in your 20s or early 30s, your financial goals must be one of these. However, the definition of true financial security may vary like:
- Owning the best credit card Canada offers to avoid credit debt
- Having an adequate sum of money to never worry about living paycheck to paycheck
Living a contented and financially luxurious life in Canada sounds inconvincible for many when it doesn’t have to be. However, you can become financially stable before 30, even on a low income, with the proper monetary steps.
Disclaimer: The right time to start is now, so even if you are in your late 20s or 30s, you can benefit from this comprehensive guide. Let’s get you a financially stable life!
Simple Steps For Your Financially Stable 30s In Canada
Preparing to save money for a car, house, or retirement seems nerve-wracking, no matter your age. Your goals, priorities, and the financial situation might differ from others, but the road to your financial stability is typically the same. So, here’s what you need to do to live a better life in Canada:
1. Put Yourself On Right Path
There’s no such thing as enough money when it comes to financial freedom. When your income increases, so do your expenses. Thus, making your brain occupied with all the new things you want and need to do. However, you can take a ‘maintain and control’ approach to ensure you’re on the correct road.
- Know where you stand: You can’t achieve financial freedom for your future if you don’t know your current situation.
- Decide what you need: Only you know the answer to this question. No matter how many finance plans you purchase, nothing will work in your favor if you don’t know your future financial goals.
- How much is enough money: Everybody has a different money limit, thus a different saving restriction. Look at your current situation and decide how much you need for retirement or saving.
And, when you’re doing a self-catharsis, ensure that you consider all the failures, losses, and risks to have a realistic idea of where you stand. Click to read some standards by MoneyUnder30 to evaluate your financial health quickly.
2. Have A Budgetary Approach
If there has to be a step that’s so obvious yet ignored, then it must be the budgeting plan. We all know how having a budgetary approach is important for your financial stability, yet we all seem to take it lightly. A budget is created to live within means. However, a budget for financial freedom is set to live under the means. Yes, there’s a difference in both!
| Living In The Means | Living Under The Means |
| A budget plan is created depending on the income to live without overspending | A budget plan is created by prioritizing the savings, retirement, and emergency fund |
| Excess cash flow is put into the savings account | Excess cash flow is put into a savings account and used for further investment |
The 30s is the peak age of your life. You have enough earnings experience and become financially mature to make life-changing money decisions. So, you might be thinking:
How do I create a budget in my 30s?
You need to be doing these life-changing commandments in your 30s for a stable future:
- Planning wise spending to save 15%-17% of your income
- Cutting out any excessive and unnecessary purchasing
- Making a backup plan in case of budget exceeding
- Paying down debt as early as possible (making large installments)
Think harder, invest smarter, and be stronger to deal with any unplanned situation. The key is to keep trying because you can always rethink your budget and financial condition.
3. Use Money To Earn Money
Your income streams play an important role in achieving financial freedom. If you want to be stable and secure in your 30s, you need to think now to use your money to earn more money. Here’s what you can do:
- Find a wholesale firm: You have to spend money to earn, so start looking for a wholesale company that aligns with your budget. Invest your money to buy a smidgen of trendy sunglasses, jewelry, apparel, etc. Then, use social media platforms to sell and thrift the items.
- Start a home-based business: Use your skills and talent to run a business right from your home premises. However, make sure to start at a small scale to reduce the risk and loss.
There are so many ways you can make your money work for you. Some of them are explained by Techwalla to help you earn and grow financially.
4. Take Control In Your Hands
You are on the right financial path, you found your monetary goals, and you successfully created a budget to live under the means. Now what? Are these steps enough to have financial freedom in your 30s? Well, to be precise, yes! If you’re following and tracking everything carefully, these should be working well for you. However, no matter how good the process is, you can only find the results after the evaluation.
- According to Forbes, 90 days is the ideal time for the evaluation to see if a new financial strategy is working in your favor or against you.
- For instance, you created a budget plan and continuously followed all the steps, so 90 days is the time to evaluate the results.
After the evaluation, you must be able to differentiate whether or not you’re on the right path. And whether or not the track you have chosen is taking you near to your financial goals in your 30s.
5. Learn Experiences, Not Advices
The world is full of financial advice. You’ll hear so many plans, rules, and stories from experts or even novice financial advisors. Yes, it’s good to get professional help when things aren’t going well, but you should not take them to heart. Instead, if there’s something that hasn’t worked well for you, note it down in your experiences list and give it the tag ‘never do it again.’
This is the only way to keep striving for the best without lagging. We’re not implying you should ditch all the expert advice or professional help. But, after one or two tries, you must know if a new financial strategy isn’t good for your goals!
6. Prefer Aggressive Savings Method
Savings and retirement planning must be your top goals to achieve financial freedom in your 30s. However, you can’t reach your goals with only basic budgeting and saving plans. You have to think through everything you’re doing to really ensure you’re on the right track. And, for the said purpose, you must be in an aggressive savings mode. Here’s what it looks like as per the Financialbestlife study:
- Elongate the gap: You have to increase the bridge distance between your earning and spending so that it becomes hard to cross.
- Choose 30% income: Create a budget plan that saves at least 30% of your total income because even if you don’t stick to it strictly, you can still save more than 10%.
- Take it personally and emotionally: Unless you know your ‘why,’ you won’t be able to take an aggressive saving approach. So, find your reason to keep things emotionally and personally attached.
And, when you become emotionally involved in something, it only pushes you harder to reach the goals.
7. Don’t Forget To Pay Yourself
When you’re dealing with life-changing steps, it’s only fair you become stressed out and frustrated when things don’t go as planned. However, instead of giving up, start rewarding yourself. Create an additional ‘reward account’ and put at least something in it every month. Yes, even $20 or $25 will work.
And, when you feel less motivated, use the money from your rewards account to pay yourself. Treat yourself to a spa day, lunch date, movie, or buy new clothing you have always wanted to get.
Frequently Asked Questions
When you start preparing for your stable 30s in Canada, you might be able to put only a little towards your goal. However, the best thing is, you have started the journey at least. And, it will be only sooner than expected when you achieve everything you want for your life. So, here’s a little FAQ section to help you out:
1. How can I be financially free in my 30s?
Financially free 30 means going from bottom to top when you reach your 30s. The goal is to start early by including these steps in your routine:
- Start paying yourself
- Create an emergency fund
- Set your saving goals
- Follow a personal budget plan
- Think about buying a home
- Get rid of your loan and debts
- Take an interest in investment
2. Can I achieve financial freedom in 5 years?
Yes, you can be financially stable in 5 years if you start planning right now. Think about increasing your income by 10% or more each year while keeping your expenses constant and in control. Then, if you manage to keep it at $60k every year by sustaining your passive income or other methods, you can save enough to achieve financial freedom in 5 years.
3. How to maximize my 30s?
Maximize your 30s by creating a plan that allows you to budget for paying debt, saving money, and using finances for investment. You have to live your 30s smartly as it is the time that can make some free space in your money stream. It will decide how early you can retire and how much money your emergency fund will have.
4. How to expand my financial knowledge?
You can increase your financial knowledge by understanding how earning, spending, and saving works. Another way is to know the level of your financial education, debt, and risk management to increase your money-making and saving skills. Attend seminars, read expert articles, register for in-person workshops, and learn from the success or failure stories.
5. How much money is enough for the 30s?
Using the basic rule of thumb for money, one should have a goal of saving his/her one-year salary before entering the 40s. For instance, if your average monthly income is 37,00 CAD, you should aim to save $32,640 before your 30s.
Of course, this number is just an estimate that can increase depending on your average salary. So, if you have high saving goals, you must think of ways to increase your income.
6. How can I make money work for me?
You can make your money work harder for you by following tips:
- Open tax-free savings account
- Think about passive income
- Invest your finances in real estate
- Learn about the stock market
- Get a rewards credit card
- Consider affiliate marketing
You can only increase money by using your money. However, you need to be wise enough to make beneficial money choices that work in your favor.
7. How much money is needed for financial freedom?
Financial freedom is when you have enough money to spend on an unexpected situation without starving or struggling. The best rule is creating and managing an emergency/savings fund based on your 3-6 months of spending. For instance, if you spend $2500 monthly, you must maintain a fund of $8,500 to $17,500 for your financial freedom.
Bottom Line
Are you in your mid-20s? Did you just celebrate your 29th birthday? Are you thinking about how to spend your early 20s financially for good 30s? This guide is for you!
Financial freedom is taking control of your finances to reach your monetary goals, making plans, and executing them in a way that can help you live your dream life. However, we usually realize the importance of financial security and freedom a bit too late. Still, don’t worry. It’s never too late to start for the well-being of your financial future.
So, give this detailed study a read and set yourself on your financial freedom path.
