One of the biggest reason that people in their 20s dread the day that they finally make it to their 30s is that it’s the decade where everything finally starts “getting real”. For most it’s a time when they purchase a new home, get established in their careers, get married and, of course, start racking up the bills like crazy.
For many people entering their 30s they’re seeing friends that once used to “party hard” all the time decide to settle down, and they suddenly realize that they have no excuses left for not having their own financial house better organized.
The truth of the matter is that many of the choices that people make during their 30s will have a great effect on what their life is like when they finally make it to their 60s. If you’re in your 30s and you’d like to be ready when that happens, there are a number of common money mistakes that you definitely need to avoid right now, today. We’ve made a few notes about the Top 3 mistakes below. Enjoy.
Mistake number 1 is one of the biggest, buying a house that you really can’t afford. Simply put, purchasing a new home is one of the biggest financial transaction you’ll make in your adult life and, even if you have people bemoaning the rise of renters in the United States, you shouldn’t let anyone pressure you into moving ahead too quickly and purchasing a home that you either don’t need or can’t afford. In fact, it’s recommended that you be willing and able to live in a home from 7 to 10 years before you commit to buying it.
It’s also an incredibly good idea to wait until your credit is as high as you can possibly get it because, if it’s poor, you will spend thousands of extra dollars over the lifetime of your mortgage paying interest rates that you’re forced to pay because of your low credit rating.
Mistake number 2 is to go into marriage without first talking about finances. Setting aside for a moment the fact that the average wedding costs approximately $30,000, the really expensive mistake is walking down the aisle before you have an honest and open talk with your partner to be about your financial affairs, their financial affairs and the likelihood of what you are combined financial affairs will look like after you’ve gotten married. Another fact is that the most common cause marriage problems is money and, if you go into a marriage is not knowing that your wife to be is an impulsive shopper or that your husband to be likes collecting incredibly expensive tchotchkes, your marriage might be in trouble before it even begins.
The final mistake, mistake number 3, is to neglect putting aside money for your children’s education. As more and more people decide to wait until their 30s to have children, many of them don’t realize how much college is going to cost once those children reach college age. The fact is, over the last three decades college costs have increased by more than 1000%, a staggering statistic. Opening a 529 college savings plan or a Roth IRA in your child’s name are both excellent ideas. Behind those ideas is simply putting money into a savings account that will grow and, by the time college tuition is due, be able to pay for what your children need.
So welcome to your 30s boys and girls, and a time in your life where things change rapidly. Keep your wits about you, don’t panic and by the time you reach retirement you might just have a few bucks left over to support yourself.