Our 30s is the best age for freedom and matureness. It’s the age when you finally get rid of the money instability of the 20s, the period when the challenges of your 50s seem so far away, and you are ready to soar and conquer new peaks in your career. In addition to these ups, the 30s are also the age when you face some experimental crunch intrinsically linked to the need for changes, overestimating your potential, and dumb financial decision-making, which is a point of paramount significance. Your further financial stability depends on the right allocation of money. Let’s recall a quote by Ayn Rand:
“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.“
Ahead you will find a list of common financial mistakes you are prone to make when you are 30-something.
Cut Your Coat According to Your Cloth
“Too many people spend money they earned to buy things they don’t want to impress people that they don’t like.” — Will Rogers.
Why? Many Americans strive hard to keep up with the Joneses, buying expensive cars and houses they can’t afford. What else is left for such people? Nothing, but jumping into debts ruining not only their long-term financial stability but also their mental state.
Overusing Credit Cards
Credit cards are bad friends that impulse you to make superfluous purchases. So, instead of trying to find excuses for the newly bought item, you had better make a budget. The catchy wise strategies that credit card slogans scream most often are no more than a hook. Credit cards come with sky-high fees that are snowballing with going over your credit limit.
Thirty years is a relatively mature age for estimating your loan options and choosing the best variant. As soon as you are ready to break your bad borrowing habits, you will reach financial stability, which is not about being rich, but smart management of funds.
Failing to Budget
Good budgeting skills are crucial factors that determine whether you glide or slide. Lacking a financial plan, you will lose track of your spendings, and emergency expenses can easily take you by surprise. So, making a budget will help you avoid living beyond your means. Start with recording your monthly fees (loan payments, commodity charges, transportation, utilities, insurance, etc.), not forgetting to leave a wiggle room.
Jumping at the Appealing Offers of Online Lenders
We understand that there might be situations when you don’t have any choice but to adhere to various types of loans. But don’t jump at the first possible loan option at the spur of the moment. High interests will only mount up your debts.
Lacking Retirement Savings
In our debt-driven society, owning a nest egg will help tackle many problems that may occur all at once. Bear in mind that living a luxurious life in your 30s may lead to penniless life when you hit retirement age.
To understand the importance of retirement savings, let’s say that your annual income is about $50,000; it means that after retirement, you need at least 30000 per year to keep the way of living and not rely on Social Security.
Ignoring the Insurance
Diseases, disasters, accidents can occur to anyone. We need to protect our health and assets against the mishaps mentioned above by getting insurance.
Remember that dreams become goals in your 30s; don’t let mistakes ruin your plans and make things go forward! Give wings to your goals, learn from your mistakes, and turn them into lessons. Remember that your long-term wellbeing depends on your current smart financial decisions.