01 May 3 Financial Mistakes to Avoid in Your 30s
Your thirties can present a new series of financial challenges, and that can come with its fair share of potential mistakes. Many in their thirties tend to see higher expenses, such as having a child and buying a home, coupled with a greater need to start investing for retirement.
Thankfully, many of the financial mistakes to avoid in your 30s can be circumvented. Here’s how:
Mistake No. 1: Prioritizing your child’s college savings over your own
In their 30s, many tend to have their first child, and they also tend to fall prey to a major financial mistake in the process. While it’s perfectly understandable to want to provide your child with the best education and opportunities, don’t make the mistake of forgoing your own financial health along the way.
Airlines tell you to put on your own oxygen mask before assisting others for a good reason: you can’t help others if you don’t take care of yourself. When it comes to your retirement savings, there are no loans available; and your children will most likely have to assist you if you’re underprepared. There are numerous loans available for higher education, however.
Mistake No. 2: Not having financial communication with your partner
Talking about money with your spouse (or soon-to-be spouse or partner) can seem like an uncomfortable topic. However, being on the same page fiscally is vital for both romantic and financial success.
One of the financial mistakes to avoid in your 30s that can have long-lasting implications is misaligned financial goals. It’s better to hash these issues out now (before you start investing/saving) than to deal with them years later when you’re on the wrong track. Couples should work together to create a financial roadmap that works for their unique needs and goals.
Additionally, financial issues are highly correlated with relationship issues, while consistent and honest financial discussions are linked with happier partnerships. You don’t have to agree on every single issue under the sun (in fact, you probably won’t), but you do need to compromise and find common ground for big-ticket financial goals.
Mistake No. 3: Shelving retirement and investing for later
Your 30s are a period where your wealth can get stretched thin. Most people haven’t reached their full earning potential yet, and are saddled with newfangled expenses, like having children. With all these responsibilities, it can be tempting to forego investing, or at least delay it until you’re in a better spot financially.
While it makes sense to invest more when you’re in a better spot, you’re missing out on major opportunities for growth by avoiding investing altogether. Compound interest has tremendous power, and any small amounts invested now for retirement will have decades to harness it. Even if you have to make some sacrifices, you pay a heftier price if you need to scramble for retirement catch up later on.
Learn more about the financial mistakes to avoid in your 30s (and beyond)
At LexION Capital, we know that you’re more than just an age bracket. We craft bespoke solutions and maintain an ongoing dialogue to ensure you meet your financial goals in your thirties and beyond. If you’d like to learn more about how we can help, don’t hesitate to reach out today.