30’s is that stage of life when we have chosen our career path, set in our profession, some are married, and some are even parents. This becomes a critical time when one needs to take their finances seriously compared to what they did in their 20’s.
But in order to be wise with money and be financially secured, we need to make sure that we avoid some mistakes. So, let’s go one by one and see what mistakes we are likely to make, and which can be avoided.
- Splurging on your Credit Card: The first thing to remember when swiping your credit card is that the money doesn’t belong to you, and you are spending some one else’s money which you will have to return. It’s easy to swipe a card but if you default in your payments or go for monthly minimum payment, you are drowning yourself in a mess you will struggle to come out of.
- Lifestyle you can’t afford: It’s very easy to get influenced with what your friends or peers have and following them you want the same. But when you dig deep into your pockets, you only land up making a hole. Rather than going for a big house or car which is out of your budget, just to show off, start by buying what suits your pocket and bank balance and gradually over the years, you can buy bigger and fancier things by saving up for them.
- Not or investing too less: Time value of money is very critical, and we need to make the most of it when the time is right to make it work in our favour. With family and a child to raise and educate, you will have to invest well to make sure you are able to accommodate all expenses which will go beyond your salary at times. Also, a family desires a good vacation which again needs money and when you invest and earn from it, you will find the trip worth it. So don’t wait, get investing as the clock is ticking and you are losing time. the right time to invest is now. Don’t wait for anything or get influenced with what others say.
- Not getting insurance: As we grow as a family, the most crucial thing to do is to make sure that our family is secured in case of any unprecedented event or untimely death. Also, when medical expenses strike, they can be very high and when you have a medical insurance to back you up, you save yourself from the struggle of arranging money by borrowing or taking a loan. Having insurance is to ensure your families wellbeing and keeping them protected financially.
- Not having an emergency fund: In my earlier blog, I had spoken about what is an Emergency Fund and why it is needed (Read here). Emergency fund gives you the much-needed cushion to meet the unplanned expenses like emergency hospitalization, loss of job, urgent travel etc. Having an emergency fund will make sure that you don’t need to borrow money from someone in the time or crisis. It should amount to at least 6 months of your salary saved up to give you a good support in challenging times.
- Not Budgeting: Budgeting is a habit which helps us to stay within our spending limits. Budgeting keeps and eye on your spending and when done right, it helps you attain your future goals easily. So make budgeting a part of your financial habit. Read my blog on Benefits of Budgeting here
One of the best things to do in your life is to start saving early. While in your 30’s, you are laying foundation for a secured future with all your savings and investments and any delay or defer in that can impact adversely, not just to you but your entire family.
This blog is a part of Blogchatter’s #halfmarathon