Your 30s play a pivotal role in your life. Student loans are hopefully on the way out, and you’re beginning to earn a good salary. You may also believe that time is on your side and you can coast for a few years. While you do have time, ignoring it can be detrimental.
Here are 13 money mistakes to avoid making in your 30s if you want to have a good life in the future.
Putting Off Retirement Planning
Time is the most important aspect of saving for retirement. The Motley Fool reports that less than 40 percent of people in their 30s are on track with their retirement savings.
It can be difficult to start, but make it a priority. Even if you save in small amounts in the beginning, it’s the act of doing it that matters.
Taking On Increased Levels Of Debt
At any age, debt can be ruinous to your finances. Unfortunately, people in their 30s have it bad. For example, the average millennial has nearly $80,000 in debt.
If that’s you, make a plan to avoid adding more to it, and act now to start knocking it down.
Avoiding Life Insurance
Death is a fact of life. Life insurance is one of the best tools to provide for your loved ones in the event of an untimely death.
Getting coverage now typically ensures you’re going to get it for cheaper. Get group coverage through your employer and complement it with an affordable term plan.
Not Having an Emergency Fund
Having a fully-funded emergency fund is essential to avoiding debt and staying on track financially. Unfortunately, most Americans don’t have even $1,000 saved.
Find a high-yield savings account, like CIT Bank, and start saving. Make it a goal to save $500, then $1,000, then one month of living expenses. Use that as motivation to reach three, then six months’ worth of living expenses.
Becoming House Poor
There’s nothing wrong with renting, especially if you don’t have a down payment of 20 percent to go towards a house purchase.
Having a house is great, but not if you can’t do anything else.
Overspending On a Car
Similar to a house, there’s no shame in driving an older, reliable car. With the average new car payment being over $700, people in their 30s shackle themselves to monthly payments that keep them from pursuing other goals.
No Long-Term Career Planning
If you’re in your 30s, you easily have at least two, if not three, decades left in your career. Short-term thinking is fantastic, but it must be dovetailed by long-term planning.
Take on new tasks at work, shadow people in other departments, and don’t be afraid to change jobs to leverage your skills for the future.
Putting Off Having Children
Having children is a personal decision and one that shouldn’t be taken lightly.
Putting off that decision can come with unplanned side effects, such as increasing costs or creating a future burden for your child(ren).
Having Only One Stream Of Income
It is reported that the average millionaire has at least nine streams of income. You can pursue the same idea, even in your 30s.
Side hustles, passive income apps, and more are all terrific opportunities to pursue and start multiple streams of income. Relying solely on your day job will, relatively speaking, only hold you back.
Not Having a Budget
Most people love or hate budgets. Haters don’t realize that a budget is meant to give you the freedom to spend money as you wish in line with your personal goals.
Budgeting doesn’t have to be difficult. There are plenty of free or cheap budgeting apps you can use that can help you get on track with your finances.
Overspending
You’re likely well on your way to establishing yourself in your career in your 30s. Perhaps it’s the first time you really have disposable income.
This can cause you to give in to overspending. In limited moderation, it’s not harmful. Left unchecked, it can derail your plans and incur debt. Keeping tabs on your spending while also allowing for some fun money is the best approach.
Not Taking Advantage Of Your 401k
Most people in their 30s are well behind on where they should be in their retirement planning. If that’s you, the best way to attack this may be right in front of you – a 401(k) match.
This is free money offered to you by your employer, but you must save money yourself to get it. If you can only do a little, put away at least enough to receive the match.
Not Saving For Your Child’s College Needs
It’s often said that you should save for your retirement before you save for your child’s college needs. That is true, but if you do have the ability to save now, putting away even a little each month is far better than putting it off.
Most states offer tax benefits to 529 contributions. Take advantage of those, and don’t overlook asking family members to contribute in lieu of giving gifts.
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I’m John Schmoll, a former stockbroker, MBA-grad, published finance writer, and founder of Frugal Rules.
As a veteran of the financial services industry, I’ve worked as a mutual fund administrator, banker, and stockbroker and was Series 7 and 63-licensed, but I left all that behind in 2012 to help people learn how to manage their money.
My goal is to help you gain the knowledge you need to become financially independent with personally-tested financial tools and money-saving solutions.
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