Y our 30s are supposed to be a very important decade of your life, but there are often top money mistakes people make in their 30s. It is normally the time when our forefathers bought a house, got married, and ended up getting a stable job. Unfortunately, that is not the case today. Millennials have the fastest-growing debt load relative to any other generation prior. While that can be attributed to serious systemic problems of our time, there are still some mistakes you need to account for to have a healthier financial future.
Social media has increased our insecurities as well as our need to indulge in more items, activities, celebrations, and more to have something or the other to post about. We scroll through an Instagram feed and see the fashion choices that we wish we had or some consumer item that is a must-have because it is a trend of the time. While it is okay to want something that everyone else has, it can be self-defeating. You need to keep in mind that the Instagram influencer does not fall into the same income bracket as you nor do they have the same financial obligations or goals. You must know what you need and should set a plan of your own financial goals and obligations and spend accordingly.
One of the biggest mistakes one can make while in a cohabiting relationship is to avoid the “finances talk” with your partner. When you are in a relationship where you are cohabitating, you must have an open discussion about the state of your finance, spending habits, and the amount of debt each person has. You both need to know if you want a separate or a joint account, whether you are an impulsive spender or a saver, how comfortable you are carrying each other's debt, if at all, or whether one of you doesn’t want to work to begin with. Having that key communication is essential for ensuring a healthy financial future.
One issue with impulsive or unplanned spending is that most people do not end up having an emergency fund. While you may have a stable-paying job and a healthy life, it is never a guarantee. You never know when you might be unemployed, get an illness or injury (especially in a country like America where healthcare costs skyrocket), or you come across some unexpected need (like extra costs during a pandemic). This is why it is healthy to save up a portion of your income every month. We suggest the savings should be enough that it can sustain your household income for up to a year, but there should not be any limit to your savings.
Let's face it, you will not be a valuable member of the capitalist society forever, and nor does anyone want to. You need to think about the time when you won't have to work, aka retirement. Only a quarter of people in their 30s start saving up for their retirement, and we believe that is too low of a number. According to experts, you should save up at least 10% of your monthly income for your retirement. If your job has a retirement plan included, that is still not a reason not to save up for retirement. Your job is likely not to last forever and that is why you must always, under all conditions, have a separate retirement fund set up.
Times are never certain, and you never know when another financial catastrophe will hit, especially with climate change on the horizon. Experts predicted that the 2008 financial crisis was the last crisis for decades, but then we had the 2020 pandemic. Hence, it is always wise to stay prepared and that begins with a healthy financial life while things are stable. If you are already doing a lot of these things, fear not. You can start now, and if you avoid these top money mistakes people make in their 30s, the sky's the limit for your financial success.
