12 Money Mistakes to Avoid in Your 30s

12 Money Mistakes to Avoid in Your 30s

Your Roaring 20s is over and you’re about to enter another decade. Your 30s is the age where setting financial independence and establishing a stable career are the goals. This is also a time where settling down and having kids comes to mind.

With these new challenges, it’s important that you learn how to manage your finances properly. Avoiding money mistakes at this point in your life can help you set yourself up for financial independence in the coming years.

Here are 12 common money mistakes you should avoid in your 30s:

#1 Not having a concrete financial plan

There are so many life changes that are happening in your 30’s. You may have bought a new house, a car, and you may have children at this point. Without planning for these changes, your finances can take a hit. This can cause a domino effect that can also have an impact later in your 40s. Make sure to have a concrete financial plan so you can get on top of your finances and achieve your financial goals.

#2 Spoiling your first-born too much

If you have a newborn baby you probably want to give them top-of-the-line furniture, clothing, bottles, and nursery accessories. This may be an exciting point in your life but going all out can totally drain your savings. It’s best to plan out and budget for your kid’s future rather than let emotions rule your purchases.

#3 Buying a car you can’t afford

You may be in a high-paying job, so you think you can finally upgrade to the latest car but buying a new one will entail a bigger car payment. Cars depreciate quickly, and you don’t want to put a lot of your money into something that will decrease in value over time.

#4 Not saving enough for retirement

Planning for retirement is the last thing you may be thinking of since you still have so many years left. You may prefer to live in the moment now, treating yourself to the latest gadgets, going on a vacation, or eating out at expensive restaurants.

There’s nothing wrong with treating yourself once in a while, but not saving enough for retirement is something you want to avoid in your 30s. Saving up for your future, and planning out your retirement will ensure that you can live a comfortable life in your later years.

#5 Neglecting to talk about finances with your significant other

This is another money pitfall that many people in their 30s experience. This is the age where your relationship is starting to get serious. You may have plans to buy a house together or get married. When stepping up your relationship, money should be one of the topics you talk about.

It may be awkward to have an open discussion about your finances, budgeting, and debts with your significant other, but this will ensure that you and your partner are on the same page in terms of money.

#6 Being a victim of lifestyle inflation

As you grow older, your salary increases. As your salary increases, your lifestyle expenses also increase. This is called lifestyle inflation. Being a victim of lifestyle inflation is a common money problem in your 30s. One of the ways you can prevent this is to avoid buying things on impulse. Just because you can afford it doesn’t mean you can buy it. Make sure to have a budget and stick to it.

#7 Not understanding the need for insurance

Many people do not have the right insurance mostly because they lack knowledge or they don’t get good insurance advice. The best time to apply for health or life insurance is when you are young and healthy. Do your research and ask for professional advice before buying any insurance policy so you know you’re getting the right type of insurance for your needs.  

#8 Using a credit card as a safety net

Your credit card can save you in times of emergency such as if you lose your job or experience a health problem. But depending on your credit card too much can cost you. It is difficult to repay credit card debt once it piles up.

Using your own money as a safety net is a better option to avoid this problem. You should have established an emergency fund already by the time you hit your 30s. A good emergency fund should be able to cover you for at least three months.

#9 Not adhering to a household budget

You may have mapped out your budget already, but are you sticking to it and updating it? Consider updating your household budget every couple of years, especially if you’ve experienced a life-changing event such as getting married or having a baby.

#10 Having only one source of income

You may feel like you have a stable career already with a consistent income stream, but it will be better if you have other sources of income besides your main job. Having more money can help you build up more savings for retirement and have more money to invest.

#11 Overspending on your wedding

The 30s is the age that many people get married, and a lot of them wind up spending more than they budgeted for their budget. The average costs of a wedding in Australia is around $36,000. Instead of planning for a grand wedding that will last for only a day, why not invest it in something more permanent like a house? A house is a long-term investment you and your partner and future children will be able to enjoy.

#12 Not planning on buying a house anytime sooner

The term of a mortgage is usually around 25 to 30 years. If you buy a house in your 30s, you will be able to repay your mortgage by the time you retire. You won’t have to worry about paying rent or making home loan repayments.

Your 30s is the age to get serious about financial matters. If you want to achieve financial freedom in the future make sure to avoid these money mistakes.

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