If you ask people under the age of 30 what they should own, the answers will vary for each of them, such as stable job, car, house, partner, including getting married to start a family. Regarding the financial issues, it’s found that people in this age group are making the level of debt higher.

Referring to the study of Puey Ungpkakorn Institute of Economic Research, the first jobbers aged 25 – 30 years have owed higher debts from consumer loans and credit cards for 10 years. One out of five gets stuck in bad debt while people aged 20 – 30 owe debts earlier and at a greater level. 

However, if young people put priority in financial planning, it’ll help reduce their financial burden and they can truly see a future, such as a start setting savings plan to buy a house, a car, investment, settling down and having a family, children education, including retirement plan. As money can determine the future directions, here are some fundamentals you should accomplish before turning 30.

Emergency funds
 

Imagine that you need a sum of money right away but you don’t own savings, and then you have to go for a loan. On the other hand, you have savings and can spend them promptly in case of an emergency. Thus, start creating your emergency fund before you reach the age of 30 by saving your money at least 3 – 6 times of monthly expense. For example; a Monthly expense of 8,000 Baht, you should save 24,000 – 48,000 Baht for an emergency fund.

Savings 
 

It’s recommended to save money once you start your career, and a good savings plan should be driven by precise goals, such as Down a house or a car, pursue education, and travel, etc. How much money should we save before turning 30? That’s up to the goal of each individual. 

Suppose you are now 25 years old and aim to have 400,000 Baht by the age of 30.

Your salary is 18,000 Baht and you want to achieve your financial goal (400,000 Baht), you need to save 6,667 Baht within 5 years, for instance. 

Mutual Funds: SSF and RMF
 

Currently, a person is liable to pay personal income tax on income from 150,001 Baht per year. When income is increased, the tax paid for each year will grow accordingly. As a result, it’s wise to allocate some money to buy Mutual Funds like Super Savings Fund (SSF) and Retirement Mutual Fund (RMF) before you turn 30.
 

As the salary base for that age group is not high, people can start buying 1 fund of SSF and 1 fund of RMF because it doesn’t cost much to buy stocks at the minimum level. Payment can be deducted from the salary account or it’s called Dollar-Cost-Averaging (DCA). Apart from receiving tax privilege, this is a long-term investment that you can invest through application easily and safely.

Stocks

A good thing for long-term investment is an opportunity to get good returns, SET TRI from the beginning of 2002 to March 2021 was 13% compounded annually (Source: The Stock Exchange of Thailand).

Before the age of 30, you can allocate money to buy 1 – 2 stocks that offer consistent dividends, gradually on a monthly basis (DCA), and it doesn’t cost much at the first start. Investment in both Thai and foreign stocks can be made through application conveniently and quickly. 

Health insurance
 

Those who are not over 30 may feel comfortable applying for insurance when they get older. In fact, it’s good having insurance from an early age. It’s recommended to have health insurance to guard against health, accident, or death before turning 30 because it’s the right age for building the future and living life to the fullest. Don’t take sickness and accident for granted.

At this age, it’s advised to choose 1 policy of health insurance with long coverage as nobody knows when an illness will occur. In the future, a new policy of health insurance may not provide full protection coverage if the Insured has a medical treatment history of the specific disease. It’s also important to consider proper insurance premiums, study coverage details, and understand guarantee conditions every time.

Debt
 

Getting into debt is not strange or harmful. If you owing debt properly, it may become a good tool to build the future. Regarding the basics of financial planning, don’t get stuck in over debt, and your total debt including installment debt shouldn’t exceed 40% of your salary. For example; For the salary of 15,000 Baht, the maximum debt to income ratio is 6,000 Baht per month.

Generally, those who are under 30 don’t get a high-paying job. Before requesting a loan, make sure to check your capacity to pay the debt. If possible, don’t get trapped in debt, especially consumer debt which carries high interest and may cause long-term financial problems.

Generally, those who are under 30 don’t get a high-paying job. Before requesting a loan, make sure to check your capacity to pay the debt. If possible, don’t get trapped in debt, especially consumer debt which carries high interest and may cause long-term financial problems.