Your 30s are a time for growth and upward movement. If you laid a sturdy foundation during your 20s, you can really build a great life for yourself in the decade that follows.
Not only should you continue the good habits you’ve already formed, but you should also focus on increasing your earning power. The potential for growth comes with increased risk, which is why you want to avoid things that can knock you off course and have a lasting effect on your life.
So, with a few years under your belt and more wisdom than ever, let’s figure out what you should do by highlighting some of the most common money mistakes in your 30s.
Allowing debt to mount
It can be easy to accept debt as something that’s just part of life. But that sort of thinking won’t help anybody but the big banks.
Getting out of debt should be near the top of any smart financial strategy. Without a plan to rid yourself of interest fees and other drawbacks of carrying debt, you can’t save for emergencies, retirement or your family’s future.
Get out of debt first. Everything else comes after that.
Not saving for your future
After getting out of debt and setting up a fund for emergency savings, one of your top priorities should be saving for retirement.
Regular contributions to a 401k are a good place to start. If your employer matches contributions, aim to contribute the maximum amount they match — it’s free money.
If you’re a parent, saving for your child’s education is likely on your radar. Setting aside money for college won’t hurt, but your own retirement should take precedent. If you can’t afford retirement down the road, your children will have more issues to deal with than student debt.
Letting costs get out of control
If you’re 30, you’re probably making more money than you ever have. But with increased income (and age) comes increased costs. If you aren’t smart about how you spend your money, it won’t matter how much more you’re making.
The biggest expense in during your lifetime is housing. It might be enticing to buy a luxury property that offers every amenity you can imagine, but you’re spending more than 30% of your pre-tax income, you may want to reconsider your options.
The same applies to cars, if you drive. A luxury car can be a big-time status move, but if you can’t afford the payments multiple times over, the big-time move can turn into a big-time mistake.
Look for ways to get some sort of return or gain out of your expenses. It’s increasingly valuable as you get older and if you have children. For example, maybe you’ve always wanted to join a country club or fancy gym. It might help you network and open new doors, but if it’s just tennis and golf at your leisure, you can probably find a more affordable way to make that happen.
Being too cautious with investments
You’re older than you’ve ever been before — aren’t you always? — but that’s no excuse for being too conservative with your investment strategies. Your 30s are a time to be aggressive with your investments. Ideally, you’ll have decades to watch those gains compound.
Your end goal is to avoid common money mistakes in your 30s, right? So focus on growth, in every sense of the word. If you’re too tight-fisted upfront, you may not have as comfortable a retirement fund as you’d prefer.
Choosing the wrong partner
Some say choosing a partner is the most important decision you’ll make in life — and that applies to your finances, too.
If you plan on mingling money, it’s important to talk to your significant other about it first. Because once finances are combined, your successes and failures are often shared.
How’s their credit? What are their long-term goals? What does your financial future look like together? These questions, and more, should be answered to ensure you don’t put yourself in a bad position.
Settling into a lifestyle
Maybe you feel like you’ve already made it in life. For some people in their 30s, that’s true. But if you’re part of the majority, you should resist the urge to let off the gas and relax.
Look for ways to advance in your employment. If you’re feeling blocked or if there’s something in your way at your current job, explore new opportunities elsewhere. Even consider getting trained in another profession, perhaps one that pays more or offers benefits that are suitable to your desired lifestyle.
Work on continuing an upward trend toward success in your 30s. Don’t accept a plateau. It’s not easy to maintain your ambition when you’ve established a comfortable life. But to ensure your finances are strong when it’s time to retire, you’ll be happy you pushed yourself.