Our financial responsibilities grow with age. Life in the 30s is not the way it is in 20s. Rather, the 30s is the time when family life is about to begin or already began, and the career had taken off. Money mistakes committed at this phase of life, are bound to lead to financial difficulties in the future. Avoid future money worries by avoiding these common money mistakes made by most people in their 30s.
1. Wrong Parking Of Savings/Investments
Often people place heavy emphasis on traditional ways of savings like fixed deposits, recurring deposits, etc., which hardly offer any returns. Rather investing wisely in products or channels that offer handsome returns is essential to allow savings grow and meet the needs.
The below infographic compares the returns when the same amount is parked at different channels.
2. Focusing Solely On Kids’ Needs/Education
More or less, the 30s is when kids and their needs come into the picture. Out of affection and intention to give the best to children, many end up spending more than required. It begins with draining money on fancy cribs, strollers, nursery accessories, etc. followed by educational and other needs.
With too many international schools around, spending heavily on kid’s education has become a status symbol for many. However, it’s time for parents to understand that schools with costly fee structure do not necessarily mean they offer the best education.
3. Neglecting Retirement Planning
Think long-term, if you do not have enough to survive in your future, you will have to depend on your grown-up kids, which could actually be expensive for them than any other student loan. Retirement should be one of your top priorities in your 30s even if you have a family and responsibilities. Ensure to park or invest the retirement savings in the channels where the money grows to beat the inflation.
4. Neglecting Insurances Or Buying Misfit Policies
In general, insurance is neglected because people do not understand its need or do not get a great insurance advice. Sometimes they get covered with just some policy, irrespective of the type, only to be proved to be a misfit later on. Do your research before buying any insurance policy or approach a trusted adviser. Understand the types of insurance policies and select the one that best suits your needs.
5. Not Discussing Finances With Partner
Discussing money with your spouse gets a lot into your relation. By sharing the control of your finances with each other, a lot of trust and confidence can be built. Honest and regular money talks help point the trouble spots together and find ways to deal. Moreover, you partner should be aware of your financial liabilities, income sources, savings, investments, etc. to continue life even in your absence.
6. Overspending On Luxuries or Entertainment
People in 30s assume that they have loads of time in hand and can earn more in the future, eventually overspend on entertainment and luxuries. While it is good to be optimistic, it is not right that you could accumulate money without cutting down on unnecessary expenses.
Yes, it’s fine to step out for a vacation once a while, but it should happen with proper planning and budgeting. Save separately for your vacation and practice to hang out within your budget. Similarly, if your purpose is solved with a small car, why go for a big car that brings along huge expenses?
7. Demining The Power Of A Will
Most young people assume that they do not have enough assets to write a Will or they assume that they still have a lot of time for it. Life is so uncertain and without a Will, there is no guarantee that your loved ones would receive your assets. In several cases of misfortune, the family was not the beneficiary rather the government was. Resolve to write your Will today to safeguard the assets and bequeath it to important people in life, after your death.
In conclusion, the 30s is the best time to make right money moves, love, and live life. Avoid common money mistakes to place yourself above your peers and lead a successful and worry-free future. For more expert advice, approach online-fiduciary like ArthaYantra, world’s only full-service Robo Advisor.