Top 5 Financial Mistakes to Avoid in Your 30s

From a financial standpoint, the 30s are a significant period of your life that can have a greater impact on your future. Being in the ’30s means we have already chosen the career path, earning a regular income, married and some may also have kids. It’s the time when we enjoy the new-found status and wealth, however, during this time, we also have important responsibilities to take care of when compared to 20s. But your financial apprehensions won’t end with an improved income. It’s time to plan ahead if you want to secure your own as well as your family’s future.

Here are some common mistakes we usually make in our 30s that we can avoid and not regret later in life.

Not Setting Financial Goals

By the time you are in your 30s, you will be overloaded with added responsibilities like buying a new home, raising kids, paying loans, and more. Though you should have a good amount of saving by this time and should have already planned investments to reach your financial goals, still changing your spending habits for the better is crucial. The time to start planning is now otherwise you might be exposing your family to greater financial risks. It’s high time to get on top of your finances and change your spending habits and consider what’s important to you while putting aside money for savings, investments and to generate extra income. To get started it’s better to set specific short, medium, or long-term financial goals. Be specific about your goals and make them actionable.

Not Saving For Retirement

Emphasize the importance of starting to save for retirement early and a person at the age of 30 has an excellent opportunity to grow money exponentially. Even a small amount invested at this age can grow large over time. You can target 15% of your income for saving and can have enough savings for 3 decades. Hence, the earlier you start, the more wonder of compounding you will witness. Make your money useful in this powerful way.

Overspending on Rented House

Imagine how amazing your life will be when you start living in your own apartment/house in your preferred neighborhood. Three out of five Indians make the mistake of spending more than 30% of their income on rent. You can save that whopping amount and use it to buy your own home and don't derail your money on rent. Invest in buying a house.

Spending Too Much on a lifestyle

You can spend on many different categories to lead a luxurious lifestyle. Be it eating in an expensive restaurant, going out for movies/ concerts, buying branded clothes, and on many such miscellaneous activities. But by the end of the month, all the total spent can be a huge amount. Even if you have a relatively high income, still spending a huge chunk amount on such luxuries can be alarming. You need to keep a check on these expenses by setting a budget goal. For example, if you've been spending a particular amount on entertainment per month, cut that in half, and work with it. After this, try to develop the discipline to save and invest the difference.

No Fund For Rainy Days

Things might seem ok and on track at the moment, however, you never when you may get sick or hurt. Most of the people don't save enough to cover months they are unable to work or do have a regular source of income, let alone years. One should always opt for medical and health insurance policies to protect themselves from unwanted emergencies to take care of your hospital expenses and related spending. This will help you focus on getting better. It will also be a protection against the investments you worked so hard to contain.