The Finance Nest

Entering your 30s is wonderful. By this time you get an idea of what your work life would be.

You also know your career path and your earning potential. This means its a pivot point to establish a solid financial foundation.

I have seen many people getting confused over choosing the right financial path for their future. Whether to focus on wealth building or to choose a way to secure the hard-earned money is always going to haunt us.

Every financial decision made at this time, good or bad, would have a ripple effect. So, take a break and think about what your priorities are and what your priorities should be. In my personal experience and experience shared by my friends, let me point out those financial priorities that you should make note of while shaping your financial decisions.

• Securing your and your family’s future: Regardless of income groups, securing your and your family’s future from financial shocks should be the first priority. Start with life insurance and medical insurance. While choosing life insurance, make sure it’s 15 times your annual income, and remember it’s not an investment. If you have a monthly income of ₹1.00 lakh:

Monthly income is ₹100,000 = yearly income of ₹1,200,000.

₹12,00,000 * 15 = ₹1,80,00,000 should be your life insurance.

Why? Because ₹1.80 crore can generate an annual income of ₹12.60 lakhs (at a 7% interest rate), which would be sufficient to maintain the same standard of living for your family. 

Many insurance companies pitch their product as an investment option. In reality, they are not. If I have to choose an insurance plan, I would select term insurance. In term insurance you get a handsome amount with a low premium, which serves our purpose. There are various term insurance plans starting from ₹6,000 yearly for a cover of ₹1.00 crore.

Then you should select a good medical/health insurance plan, which should be a minimum of 6 times your monthly salary. A health insurance cover of ₹10.00 lakhs for the whole family would start from ₹20,000.

• Build an emergency fund: 30 is the age of creating financial stability, and it can be done by creating an emergency fund. Ideally, this should include 6-12 months of essential living expenses like rent or EMI payments, groceries, utilities, transportation, and insurance. The first priority in choosing the investment option should be easy liquidity, and market-linked options like mutual funds and shares should be avoided. Fixed deposits offered by the banks can be the best option, which provides liquidity and a decent return.
• Start planning to own a house: Owning a home is seen as a milestone and a symbol of success. But don’t rush by taking the burden of a housing loan, which can eat up to 50% of your income. Focus on accumulating 20-30% of the down payment amount and wait until you reach your goal. The best option can be SIP in equity mutual funds, which can easily give a return of 12%. For example, if you plan to buy a home of ₹60 lakhs and you are starting with a ₹10,000 SIP, your return would be

In 5 Years: ₹8.11 Lakhs 

In 7 Years: 12.89 Lakhs 

In 10 Years: 22.42 Lakhs 

So, start early to meet your goal of buying a home.

Allocate an Experience and Skill Budget: Allocating money towards travel, hobbies, and learning new skills isn’t just a luxury—it’s an investment in your personal development and mental well-being. Instead of taking loans for such pursuits, plan a dedicated monthly budget. If you’re earning ₹100,000 per month, consider setting aside 5–10% (₹5,000–₹10,000) for experiences and upskilling. Over time, these enriching investments can boost creativity, confidence, and even open up new career opportunities.

Plan Retirement: Start setting aside at least 20% of your monthly income for retirement as early as possible. For example, if you’re 30 years old and earning ₹100,000 per month, aim to invest at least ₹15,000 consistently in mutual funds, NPS, or other long-term instruments. With the power of compounding, this investment at a return of 12% would be 1.72 crore in today’s value (considering 5% inflation). Early planning ensures financial security in old age and also gives you the freedom to retire early, travel, or switch to passion-based work without worrying about money. Discipline today builds freedom tomorrow.