Climbing the career ladder, buying a home and starting a family – the 30s are an exciting stage of life for everyone. Having secure financials during big times of change like these are extremely beneficial and important. We’ve put together 8 common financial mistakes people in their 30’s make to help make a difference to your future financial wellbeing.
1. Buying an expensive car
New cars plummet in value when driven off the showroom floor. Buy with borrowed money and you’ll be paying interest on an asset of diminishing value.
Settling for what you need in a car, rather than what you want, can add thousands of dollars to your future nest egg.
2. Living on plastic
Pay off your credit card balance in full each month so you won’t be paying a high rate of interest on the carryover balance. Having a growing interest bill over time makes it difficult to clear the debt. If not used carefully, buy-now-pay-later schemes can also become a debt trap.
It might sound boring, saving up for what you want to buy, and to avoid going into debt for consumer items is the antidote.
3. Shifting your savings focus
It’s a good idea to save at least 10% of your income but every little bit of saving is better than nothing.
For instance, when Nicole turned 30 she started to put away $200 per month at an interest rate of 5% per annum (after tax). By the time she’s 60 her savings will grow to $166,452. If she waits until she is 40 to start her savings plan she will accumulate just $82,207 – less than half!
4. Focusing only on money
On the contrary, it’s possible to be too fixated on money – working too hard, snapping up investment properties. Working on your current lifestyle goals and finding balance can give you a different type of reward.
5. Getting caught up in investment fads
Investment fads come and go. In the long run, it pays to invest in things you really understand, and diverse investments to reduce risk.
6. Not insuring your most important asset
For most 30-somethings, your biggest asset is the ability to earn an income – no, not necessarily your house. Most health-related absences from work are things that are not covered by workers compensation. Income protection insurance can replace much of the income lost due to accident or illness. However, it’s a complex product so seek expert advice.
7. Still feeling bullet-proof
Sadly, accidents and unfortunate events can strike at any age. Now is the time to make a Will. Investigate powers of attorney and health directives. These documents will make it easier for your loved ones to settle your affairs if the worst happens.
8. Being too hard on yourself
We’re all human, and we all make mistakes. Beating yourself up after making mistakes can leave lasting damage if occurring often. Don’t give up if you make a mistake, learn from it and just keep going.
That would be a pity because the 30s is a decade of huge potential. Good advice now can help you unlock that potential. To find out more, talk to a qualified, licensed financial adviser.
The 30’s are a decade of huge potential and massive change. Good advice can help guide you through that change and unlock that potential.
Talk to a qualified, licensed financial adviser to find out more and discuss your options.