Many young people make mistakes in their 30’s with money that can cost them a lot of money in the future. This is usually because most people in their 30’s believe that they have plenty of time to get their financials in order. . . but this isn’t always the case! Make sure that you are smart with your money now, so that you are comfortable later. Here are a few common mistakes that you should consider carefully and try to avoid in your 30’s.
1) Overspending on Cars & Houses
It can be very tempting to upgrade your lifestyle when you start to feel established in your career. Make sure that you talk with a financial adviser to make educated decisions on what you can afford. If you have other debt you are trying to pay off, a huge mortgage or car payment probably isn’t a smart choice. Consider if you lost your job, would you be able to afford the payments?
2) Not Taking Advantage of Work Benefits
Make sure that you fully understand all of the benefits that your company offers, and that you are taking advantage of them. Any benefits that you aren’t using are lost money to you. Some companies offer overlooked options, such as flexible spending accounts and commuter benefits. Talk to your HR department to see if you are missing out on any benefits that could save you money.
3) Not Putting Enough Away for Retirement
Not only is it a good idea to up your contribution to your 401(k), but you should also be considering other investment opportunities for your retirement. A Roth IRA is a great idea, especially if you are below the income cap ($116,000 per year as an individual, $183,000 as a married couple or filing jointly). This retirement-saving vehicle provides tax benefits and generally gets a good return.
Also check with your company and see if you can add to your yearly or monthly contribution to your 401(k). Don’t make the mistake of not saving for your future. Start now!
4) Neglecting Insurance
Many young people neglect to purchase two kinds of insurance – disability and life insurance. Because of their age and health, they feel that it is not worth the cost.
Neglecting both of these plans could be a costly mistake. If you were to become unable to work, disability insurance would provide income that you no longer able to make. Life insurance is similarly underused by many young people in their 30’s. This insurance will provide for others who might be dependent on your income. These situations are important for everyone to consider. While you might not think that anything like this could happen to you, it isn’t worth the risk.
5) Overspending on the First Kid
Many young parents overspend tremendously on their first kid. They feel the need to buy top-of-the-line cribs, strollers, and other baby equipment/supplies. Of course raising your child safely and in a good environment is important, but take some time to research cheaper options. Talk about what is the most important, and budget your money before you first child arrives. You should also save extra money for costs that you might not expect.
6) Not Revisiting Your Investments
Unfortunately, you really shouldn’t set your investments and then leave them for the rest of your life. You should revisit your portfolio every year and readjust it based on your needs and timeline. It may help to hire a financial adviser to help you handle your money.
Talk to your local 360 Insurance Agent today to understand your future options. Find an Agent