Money management is simple but not easy. A few common financial mistakes in your 30s can give you stress in the 40s and discomfort in your 50s. So, are you wondering what mistakes can cause financial instability in your future? Today, we’ll discuss the most common mistakes you must avoid in your 30s. So, you can live peacefully in the later stages of life.
Mistakes to Avoid in your 30’s
• Not planning for your retirement
You keep delaying retirement planning to later stages of life. It’s not appropriate. Because then not only you’ll have fewer years to save, but you’ll also miss out on the benefits of compounding. Hence, start planning for your post-retirement years as early as you can.
• Planning to buy a house out of your financial limits
Taking high debts to buy a house you can’t afford might be your worst decision ever. It is because you may face hard times paying off debt. Also, other expenses, such as furniture, maintenance and utilities, come with debt. Hence, buy a house that you can really afford without financial stress.
• Overspending on children
Children mean the world to their parents. You might always want to go the extra mile for their happiness. Expensive toys, branded clothes, children’s accessories, etc., might be attractive for your kids. But ask yourself, “are these expenses worth it”? Or are these expenses more important than paying off debt or saving for kids’ secured future? Don’t let marketing gimmicks play with your emotions, especially when you have big responsibilities in the future.
• Depending on a single income source
Right now, is the era of uncertainties. You never know what the future holds for you and your business. You might feel comfortable with your job/business, but over-dependence is risky. Try finding new sources of income. Monetising your skills online or investing money in dividend-oriented instruments would work. Experiment and find what works best for you.
• Taking too many loans simultaneously
Loans might attract you like a magnet during this age but try not to fall for them unnecessarily. Car loans, home loans or student loans at a single time can be financially daunting. Paying instalments might seem handy, but don’t forget the interest rates, processing fees, application charges, etc. Can you handle all this by yourself? Can you manage to pay off debt even when you face a loss of income for a few months? Ask yourself and make wise decisions.
• Spending too much on depreciating assets
Can you imagine your car’s value rising just like your SIP investments over time? Will your expensive furniture appreciate like stocks in future? Though we can’t survive without spending money on these items, an excess of anything is bad.
• Putting all your eggs in a single basket
Investing in a single investment option is highly risky. Diversification is the only key to avoiding too much risk and still enjoying decent returns. Aim at having a balanced portfolio. A few experts recommend investing 60% in equity and 40% in debt instruments.
• Overusing credit cards
During most of your impulsive buying, credit cards have a crucial role to play. Most of us end up purchasing unnecessary things we don’t need. Hence it is advisable to use such cards in a limited manner. Else these can burn a hole in our pockets.
Final words
In your 30s, you must start practising good financial habits to save enough to enjoy your 40s and life carefree in your 50s.
Avoid mistakes mentioned in the guide and see yourself in a better financial condition in future.
