Are you a member of the Thirty, Flirty, and Thriving club? Whether you’ve been in this age range for quite some time or are a relatively new member, you likely know that your thirties present a different set of challenges (financially and otherwise) than the kind you faced in your 20s.
At this point in your life, you may find yourself balancing several different types of goals: saving for a down payment on a home, working to achieve that next big promotion in your career, making the last few payments on your student loans, saving for a wedding, and even (potentially) looking to start your own family.
These goals and dreams are integral parts of what motivates us and keeps us pushing ahead day in and day out. However, as with anything worth having, hard work and dedication to the cause are entirely necessary. The good news? Most women cite that their thirties were actually the decade that they finally “found themselves” and achieved a greater sense of purpose.
“Thirty was a big deal for me. It was the age where I reevaluated everything – how I approached life and how I thought about myself.” – Amy Adams
If you’ve begun to reevaluate and discover your sense of self, consider doing the same for your finances. You deserve financial freedom and independence because, hey, you’re a woman with dreams! If you’re looking to achieve some serious goals this next decade, then you know you’ll inevitably experience several challenges and potential obstacles. While you can’t typically control what challenges come your way, you CAN control your level of preparation and your response to such challenges.
Step 1? Learn what NOT to do.
Here are five financial mistakes to avoid in your 30s:
1. Not Saving Enough Money
We get it. It’s not always easy to stash away cash, especially when you have loans, a mortgage, are busy building your business, or have other financial responsibilities. However, saving money in your thirties is one of the most critical components of securing a financially stable future. In your 20s, you likely began to focus on your financial security by establishing an emergency fund and by contributing to your 401(k) or other employer-sponsored retirement plan. Now that you’re in your 30s, it’s time to check-in: Have you depleted any of your emergency savings? Take the steps to rebuild this fund, making sure to adjust the total amount needed based on your income level (*3-6 months of your income saved is generally recommended). Can you increase your contribution to your retirement plan? Even increasing your contribution by 1% may make a difference.
Additionally, a general rule of thumb is to aim to save at least 10-15% of your income for long-term saving/investing. If you haven’t begun to do so, start aggressively saving this year.
2. Living Beyond Your Means
Now that you’re in your 30s, you likely know the importance of sticking to a budget. Taking time to check-in every few months and evaluating your spending habits is so important. Are you spending too much money on unnecessary expenses and underfunding your retirement or other savings plans? While the temptation to keep pace with the latest trends exhibited by your favorite influencers on Instagram is very, very real, keep in mind that time is on your side right now. You still have time to save for retirement and to let the magic of compound interest work for you. Reevaluate that budget and hold yourself accountable to your spending goals. Living beyond your means may provide you with a life you loved in your 20s, but future decades will require significantly more sacrifices if you don’t change those little behaviors.
3. Not Protecting Yourself, or Your Family
If you have little ones depending on you, you absolutely need life insurance. If you work in a field where a devastating injury would absolutely prevent your ability to continue working, you’ll want to consider disability insurance. Insurance doesn’t have to be overly expensive if you work with a professional and evaluate all of your options. Unfortunate events do happen. Make sure you’re preparing yourself and your family accordingly.
4. Waiting Too Long to Open an Investment Account
This goes along with point number one about not saving enough money. Obviously we are not all lottery winners who have the luxury of staring at multiple zeroes in our bank accounts. That said, the relaxing retired life is also not a guarantee. In order to achieve financial freedom at the later end of your career and into retired life, you have to make plans now. Opening an investment account and working with a professional can potentially help you achieve that financial security you’re so badly dreaming about.
5. Taking on Additional Student Debt
Going back to school to secure an additional degree is a big decision. Obviously, if your career necessitates this, or if you are looking to change careers, then this decision is a no-brainer. However, if you’re considering additional schooling in order to improve your resume or to add to your LinkedIn profile, then you’ll need to think through two things:
- Opportunity Cost of NOT working: Can you afford to take a few years away from your career? Will the cost of your post-grad salary be enough to make up for the few years of the earnings you missed while in school?
- Debt: Yes, you can sign up for student loans in order to attend graduate school, but keep in mind that this debt often has higher interest rates than your typical undergraduate student loan AND offers no “interest free” grace period once you graduate. You’ll be required to start making payments on your loans immediately after graduation, interest included!
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