Hey queens!
Let’s talk about the real royalty: Financial Freedom. After a decade in investments and wealth planning, we’ve seen it all (from budget breakdowns to investment breakthroughs). We are here to drop some knowledge bombs.
We’ve worked with tons of women in their late 20s and 30s who want to set themselves up for success before hitting the big 4-0. Trust me, the years leading up to your 40th birthday are critical for setting yourself up for long-term financial security.
Making a few strategic money moves in your 20s and 30s will pay off big time in your 40s and beyond. Here are our top 5 recommendations:
1. Start Investing Early and Consistently
We can’t stress this enough—start investing as early as possible and keep it consistent!
Don’t worry if you can’t contribute thousands each month. Any amount invested consistently adds up. The key is to automate it so it just happens without you thinking about it every month. Set up automatic contributions from your paycheck into pension plans or personal investment accounts.
We had a client who started investing just KES 50 daily in her 20s. By the time she retired, that small sum had grown into a nest egg big enough to buy her dream beach house in the Bahamas. Talk about retirement goals!
2. Pay Down High-Interest Debt
Carrying debt, like credit card balances and personal loans, into your 30s and 40s is like dragging an anchor. It drains your energy, steals your joy, and makes it impossible to chase your dreams. So, it’s time for an eviction!
First, map out your debts: list them all down, including the interest rates and minimum payments. Then, choose your weapon: consolidation (combining debts into one lower-interest loan) or negotiation (contacting creditors to try and lower your interest rate). Remember, you’re the queen here, so don’t be afraid to negotiate!
You could ultimately choose to get aggressive about paying off the high-interest debt you have. The quicker you can get rid of it, the better. Come up with a debt payoff plan and make this a top priority. You’ll feel so free when you’re no longer saddled with high monthly payments!
One of our clients, Naomi, had racked up KES 300,000 in credit card debt in her late 20s due to some unexpected medical bills. She was only making minimum payments, so it was hanging over her head for years. At age 35, Naomi decided enough was enough. She took on a side hustle to earn extra income and was able to pay off the entire KES 300,000 balance in just 10 months! She was so relieved to have that burden lifted before turning 40.
3. Build Up Your Emergency Fund
You always want to have a rainy-day savings fund because life likes to throw curveballs when you least expect them. That’s why having an emergency fund is like having a bodyguard for your finances. Aim to have 3–6 months of living expenses set aside.
Our client, Mary, found out the importance of an emergency fund the hard way. At age 33, she lost her job unexpectedly (due to the COVID-19 pandemic). Because she didn’t have any cash reserves, she ended up having to rely heavily on her credit cards to keep her small family and herself afloat.
It took her over two years to pay down the debt she accumulated. If Mary had even just KES 100K set aside in an emergency fund, it would have made a world of difference during that difficult period between jobs. She took the lessons from that experience and is now well on her way to financial independence.
The peace of mind of having that financial cushion is priceless as you head into your 40s!
4. Get Life and Disability Insurance
One important way to provide long-term security for both you and your loved ones is to get adequate life and disability insurance coverage. These provide protection in case something unexpected happens to you. Get adequate life and health insurance to protect yourself and your loved ones in case of unforeseen events.
Many of our clients realize in their 30s that their coverage through work isn’t enough. I recommend taking stock of your current policies and then getting quotes for supplemental coverage.
For life insurance, make sure you have enough to pay off any debts and provide for your family’s ongoing living expenses. For disability insurance, look for a policy that will cover at least 60% of your income if you’re unable to work due to illness or injury.
Yes, premiums are another expense, but the peace of mind is truly priceless. Don’t leave your family’s future up to chance.
5. Update Your Beneficiaries
This last move is easy to overlook but so critical! Make sure to update the beneficiary designations on all of your financial accounts, including retirement plans, life insurance policies, and bank and investment accounts.
It might sound morbid, but it’s crucial to ensure your assets go to the right people after you’re gone. These designations dictate who gets those assets upon your passing. As you go through milestones like marriage, divorce, or having kids in your 30s, you need to update your beneficiaries accordingly.
I’ve seen firsthand how outdated beneficiary information can wreak havoc on grieving families. Annual check-ins on your beneficiaries can save your loved ones a lot of headaches and heartache down the road.
Remember, open communication with your family about your financial plans is key. You don’t want any drama after you’re gone.
In Your 30s, Think Long-Term
As you approach the big 4-0, making these strategic money moves will set you up for true financial empowerment in midlife and beyond. Think long-term!
Consistently investing, getting out of debt, building your emergency cushion, protecting your income, and updating beneficiaries may not all be glamorous. But trust me, your future self will thank you later.
If you want personalized guidance to help establish your financial plan, don’t hesitate to reach out. We are always happy to meet with new ladies to offer tailored money tips and advice. Here’s to your richest life yet!
