Your 30s are an important decade when it comes to managing your finances. After the rush, and often the instability, of their 20s, many people try to focus on financial stability in their 30s. Thus, it is extremely crucial for you to take stock of your spending habits and manage your money more meticulously as you age. Unfortunately, it is all-too-easy to make the following errors that could end up costing you a lot:
1. Not planning expenses
When you are in your 30s, you may invest in a new house, a new car, or a lavish wedding. Without planning the financials, though, your spending can get out of hand and you may end up piling on more debt than you can repay. Therefore, having a fool-proof financial plan is mandatory before making such investments. If you’re struggling to get organized, you can hire a financial planner to guide you through managing and saving for these expenses.
2. Going overboard with things for your child or yourself
Most people feel more equipped to become parents in their 30s, as this is when they are more financially stable. But, in a bid to ensure your child lacks for nothing, you may go overboard, purchasing unnecessarily expensive furniture, clothes, and toys for the baby. Instead of spending a fortune on baby accessories, use that money to save for their future—you can skip that expensive designer crib and put the money into a college fund instead.
3. Buying an expensive car
By your 30s, you usually have the financial ability to start realizing your dreams. However, it is important to avoid the urge to purchase unnecessary luxury items that you can’t afford. For example, you may finally decide to invest in an expensive car. Before doing so, however, remember that cars usually have a rapidly depreciating value, meaning that you likely will not be able to sell the car for as much as it cost you. Therefore, put off buying that vehicle until you have enough saved for your essentials plus emergency expenses.
4. Not having a retirement plan
For people in their 30s, living in the moment might seem like the right way to go about life. Yet, one of the biggest financial mistakes that you can make is spending on fun now without saving for your future. It is important to enjoy life; however, not setting aside enough money for your retirement can backfire badly.
5. Heavy dependence on credit
A credit card should ideally be reserved for planned expenses that you can afford. However, some people put everything on their card and are then surprised when the bills add up and lead to heavy debt. Therefore, to maintain financial stability, avoid making impulse purchases on credit. A good rule of thumb is to never spend more than what you currently have in your savings account. This will ensure that you can always make your payments on time and in full.
