30 Money Mistakes to Avoid in Your 30s (Part I)

Personal Finance

Oftentimes personal finance is less about making the perfect decision and instead about avoiding the really bad ones. This axiom is especially true in your 30s as your personal finances become increasingly complex.

Your 20s were likely full of balancing weekend expenses and student loan payments. Now, in your 30s, your income is likely growing, but so too are the expenses. Rental payments are exchanged for a mortgage payment, and funds previously allocated to student loan payments might now be redirected to saving for your children’s college. You might even be looking to save enough money to start your own business.

Wherever you are in your 30s, it is likely that avoiding these money mistakes will have a positive impact on your life both now and well into the future.

  1. Not Saving for the Future: If you couldn’t start saving in your 20s because of student loans or young kids, there’s no more waiting. It is time to start. Allowing your hard-earned money to grow over decades is one of the best ways to ensure your distant goals are possible.
  2. Not Saving for the Future: No, really. It is that important. If you haven’t started saving yet, it is time. Auto-pilot your savings a little bit at a time until you get to 10 percent. Once you’re there begin shooting to increase it to 20 percent.
  3. Lifestyle Creep: Your neighbors just expanded their home. Your best friend just bought a new boat. So why can’t you? Especially since you just got a big raise. Avoid letting your lifestyle grow in line with your salary, aka “lifestyle creep.”
  4. Avoiding the Money Talk: Looking to get married? Engaged? It’s time to have the money talk. Avoid waiting until you’re married to have the conversation about money. “How much will we save as a couple? Who will continue to work if we start a family? Is one of us a spender, the other a saver?” Get everything out on the table now.
  5. Undiversified Portfolio: Even though you may have put all of your money into one or two funds in your 20s, it is time to ensure your portfolio is well diversified and your expenses are minimized. Conduct a portfolio checkup to ensure your investments are balanced and appropriately priced.
  6. Living Paycheck to Paycheck: If your career is advancing and your salary has kept pace, but you still find yourself living paycheck to paycheck, it is time to go back to the drawing board. Build a budget, track it, and align your spending with your values. It is never too late to start budgeting.
  7. Having an Unfulfilling Career: The paycheck is great, but going to work every day is painful. Changing jobs can be daunting, especially with mouths to feed, but going to work shouldn’t be a chore and in many cases it doesn’t have to be. With a plan you can take the leap, but you need to plan it out.
  8. Overlooking Estate Planning Needs: Sure, you aren’t retired, but that’s no excuse to overlook what might happen to your loved ones if something terrible happened to you. Make sure you have a will in place and beneficiaries on all accounts at the very least.
  9. No Idea Where You’re Going: If you don’t know where you want to go, it doesn’t matter much which direction you go. Try to picture your perfect life. What would I do? Where would I live? How would I spend my time? Once you know what it looks like, you can begin to plan how to get there.
  10. Buying New, When Slightly Used Will Do: The value of a car depreciates approximately 20 percent in the first year after it is purchased. So consider buying the 2014 model at a 20 percent discount; the difference can be significant. This rule applies to small ticket items too, like buying books on Amazon instead of the new version at Barnes & Noble.

Keep an eye on the Lifewise blog in the coming weeks for the next 10 money mistakes to avoid in your 30s.

About Matt Cosgriff, CFP(®)

Minneapolis Financial Planner | Intrapreneur | Young Professional | Millennial Guru | Tech Aficionado | Traveler | Food Lover | Minnesota Wild Fan | Movie Quoter | Follow on Twitter| LinkedIn

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