Critical Money Mistakes to Avoid in Your 30s
Life in your 30s can best be described as “complicated.” If you are like many Canadians, you have just completed college and maybe still struggling to establish your career path. Most probably, you are in your first job and still making connections, taking risks, and having some fun.
Your mind may also be preoccupied with relationships and your first major life purchases. Typically, this is the busiest decade of your life.
Hopefully, you spent your late 20s building a solid financial foundation for your future. Now is the time to make a change and start implementing your financial action plan.
Keep in mind that any financial mistakes in your 30s can be costly, and you may never get the time to recover. Here are some of the common money mistakes you need to avoid in your 30s.
Living Beyond Your Means
Thanks to social media and peer pressure, it is quite easy to spend a lot of money on non-essential items such as shoes and clothing to “fit’ into a certain bracket of life. That is how you find yourself living beyond your means and drowning in debt.
At this point, you can do anything including exhausting credit card limits and going for a loan to get what you think you deserve.
To fix this problem and ensure you don’t end up in a cycle of debts, make sure you create a budget and stick to it no matter what. Take time to understand your income and make sure the kind of lifestyle you live reflects your earnings.
Carrying Too Much Credit Card Debt
Sometimes, credit cards can feel like the only solution you got when you need that extra help to get you to your next paycheck. Credit cards can be helpful too if you are looking to build your credit history and boost your credit score.
But, you must keep in mind that credit card companies make money off your dumb mistakes such as buying things that you don’t actually need and impulse purchases.
If you don’t pay your credit card balance as fast as possible or if you only make the minimum monthly payment, you may end up repaying the debt forever. And this is one thing that you need to avoid in your 30s since you are not yet stable financially.
Failing to Set Up an Emergency Fund
You may think that taking out a life insurance policy is sufficient protection when you are strong and healthy in your 30s. Sometimes, your employer may even offer it as part of the employee benefits.
While life insurance provides excellent protection, the truth is that it doesn’t earn you any money and you cannot use it to protect your future financial life. Establishing an emergency fund does.
An emergency fund shall come in handy when you are faced with life’s unplanned expenses such as an unexpected car repair, emergency medical bills or even roof repair. With an emergency fund, you don’t have to go into debt to take care of such emergencies.
Not Talking About Finances with Your Partner
When you hit 30, there is a high chance that your relationship will get serious, and you may even start thinking of getting married. This is also the perfect time to have serious money talks with your fiancée.
Money is one of the top issues that many couples fight about, and you can avoid the tussles if you create a mutually agreeable system for handling your finances as a couple.
Don’t assume that everything will just fall into place once you settle down with your partner. Avoid committing the mistake of combining your finances without a clear plan in place.