F
inancial responsibility is one thing that eventually catches up with you irrespective of whether you’re ready to embrace it or not. We go from “Mama, what’s for dinner?” to “Wow, I really have to stop splurging and start saving up for my dream house.” How time flies. Once upon a time, you were just kicking it with that hottie and next thing you know, you are on Google in search of an affordable but competent hospital to birth your first child. Such is life.
The money decisions you make in your 30s are a critical bedrock for your financial future. There’re certain money mistakes people make in their 30s that etch their consequences deeply in an individual’s future. Worse still, these mistakes don’t just affect you but your family and loved ones. This is just the right age window to chart your course in life and if you’re still going broke trying to get that dream double-drawn wig, it’s not too late to reroute.
Here are the top money mistakes people make in their 30s that you should avoid…
#1. Not having an emergency fund
We get it, the money keeps pouring in. But having an emergency fund doesn’t mean you’re about to go broke. It simply means that you’re protecting yourself should any unforeseen event occur. Plus, considering the state of the global economy, it’s a reckless idea to splurge through your entire income. Develop the habit of saving for rainy days. You’ll be glad you did.
#2. Playing the borrowed card
You’re probably familiar with the cycle of living off borrowed money to offset bills in hopes of paying them back on payday. The thing with this is that the cycle never really ends. You borrow to pay back only to borrow again. In your 30s, your priorities should shift from ‘appearing to own’ to ‘actually owning.’ Take the first step in the right direction by living below your means until your income is self-sustaining.
#3. Financing staggering liabilities
The greatest mistake you can make is to confuse liabilities with assets. The second greatest is to keep having endless financial liabilities. For instance, all the bills you pay to stay trendy may be what’s keeping you from growing your wealth. In between four streaming subscriptions you never watch, five gym memberships you never use, and several others, you’re definitely putting good money to waste.
The point of call should be first to eradicate services that truly don’t serve you as you begin to make plans to invest in real assets. And when it comes to shopping and subscribing to services, be sure to stick with an established budget and opt for bargains when possible. Also, consider investing in quality over quantity as this saves you money in the long run.
#4. The anything-goes mentality
Fresh out of your vibrant 20s, you still think “What will be, will be.” News flash: what will be, will not be. If you continue guzzling your money without a proper financial plan/goal, 20 years from now you just might be in a rented apartment still daydreaming about your dream house in broad daylight.
#5. Being unnecessarily competitive
One of the most common money mistakes people make in their 30s is this one. Purchasing unnecessary items in a silent competition with your peers just to create a façade of success is a bad decision. An understanding that every individual’s life process is totally unique to them would certainly help you get over the underachiever feeling you have going on. Delayed gratification is a tool people in their 30s shouldn’t do without. Focus on building your desired future other than trying to impress people who truly can’t be bothered.
#6. Turning a deaf ear to insurance plans
While nobody wants to come to terms with the fact that their luxury apartment could go down in flames or their latest SUV could get into an accident, the truth remains that these unforeseen incidents can happen to anyone. Protecting properties and even lives should be an integral part of your wealth creation and sustainability plan. Find out what insurance plan works best for you, understand exhaustively what it entails, and dive right in. Life is too short.
#7. Not keeping a financial record
To be honest, sometimes these principles sound easy on paper but in reality, it’s a skill you need to harness. Knowing where your money goes is key. You should no longer wake up and realize that your salary is wiped out and when you ponder on what you spent it on, you can’t seem to figure it out. And consequently, you just shrug your shoulders and whisper “Oh well.” This is financial irresponsibility at its peak. Simply put, know where your money is going and also exactly what not to do with it no matter the pressure.
#8. Having just one source of income
We get that at this point in life, jobs have become careers but to achieve a lifestyle several rungs up the financial ladder, you need to have more than one source of income. It’s true that you love your job and are willing to build a career with it, but nobody ever became wealthy on one source of income. These money mistakes people make in their 30s keep them comfortable but always a step below financial freedom. Always have at least two sources of income, you could bank one and spend the other.
“A good financial plan is a road map that shows us exactly how the choices we make today will affect our future.” –Alexa Von Tobel
Featured image: Slippers in.com
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