Your 30s are a magical decade. You are most likely untethered from your parents, living on your own, paying your bills and trying not to make the same mistakes you did when you were in your 20s. While many misadventures are easily corrected, such as making sure to eat before you have a few drinks, others are harder to avoid.
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Financial mistakes are still common in your 30s. The great thing is that you are still young enough to correct any money mishaps. Preparing for your future in your 30s can help provide stability for yourself and your family (if you choose to have one). Fixing these woes now is key to long-term financial health.
Not Putting Money Toward Retirement
Retirement may be one of the furthest things from your mind in your thirties. For most people, it is still decades away. The problem with this kind of thinking is that it may prevent you from saving for the inevitable. Failing to put money toward your retirement as early as possible can seriously hurt you in the long run.
The fix is simple: Start saving now. If your employer offers to match your 401(k) contribution, take advantage of it! It is free money. If you are an independent contractor or self-employed, start investing in a retirement account today. There are several options, including a traditional IRA, Roth IRA, SEP (Simplified Employee Pension) IRA or a solo 401(k). Depending on what kind of account you choose, you can take advantage of tax benefits now or withdraw tax-free later.
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Getting Into Credit Card Debt
Running up credit card debt is easy. Really, really easy. According to Experian's 12th annual State of Credit report, Americans carry an average of three credit cards and have a total outstanding balance of $5,525. The good news? Credit card debt has fallen each year for the past three years. There is hope!
Instead of putting purchases on a high-interest credit card that allows you to make minimum payments each month, consider one that forces you to pay it off. If you need help being disciplined, you could opt for a prepaid credit card or only buy things you can afford to pay in cash. The more you do now to prevent going into credit card debt and, in a perfect world, pay off the debt that you have, the better off you will be down the road.
Not Investing In Property
Real estate is generally a smart investment. If you can afford to purchase property in your 30s, it may be a shrewd choice. However, you want to make sure that you are making a wise decision based on where you are at financially.
Buying more house than you can afford could actually do more harm than good. Also, be wary of overpaying in a hot market. While the housing market is cyclical, you don't want to be upside down when you are ready to sell.
If you can swing it, consider investing in a townhouse or condo. Ideally, the investment will pay off, giving you a nice down payment on a larger home if you start a family or it grows.
Not Setting a Budget
There are many upsides to being in your 30s. One of the biggest is that you probably have more disposable income than you could ever have dreamed of in your 20s. The problem is that you may not keep track of your spending. It is OK to indulge, but your finances may take a hit without moderation.
Take the time to set a budget. You might be surprised how much of your paycheck is going to eating out or impulse purchases. Your 30s are an ideal time to build your emergency savings and invest aggressively. Remember, you don't have to completely deprive yourself. Your goal should be to live within your means and make a few sacrifices so that you can invest in your future.
Not Preparing for a Life Change
Thinking about and preparing for financial obstacles can help you avoid later heartache. A steady paycheck today does not guarantee one in the future.
Your 30s are an excellent time to consider what life changes could happen throughout the next several years and how they could affect your finances. Are you prepared for a job loss? What about children? What about your child's education? What if you get sick? Are you adequately insured in case of a health emergency?
All of these things are important to consider. Planning ahead by getting better health insurance or putting money into a 529 college savings plan for your kids can help relieve some of the headaches when these challenges arise. Unexpected expenses are bound to come up, but with a little forethought, you'll be ready.
Remember, though, not to worry yourself sick over things that likely won't come to fruition. Ideally, having some extra money set aside provides you security and peace of mind so that you're not overcome with financial anxiety.
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This article originally appeared on GOBankingRates.com: 5 Most Common Money Mistakes Made in Your 30s - And How To Fix Them