Top Money Mistakes People Make in Their 20s & 30s

(Here’s at Least 15 of Top Priority…)

Anyone who tells you they haven’t made a single money mistake is lying, especially if they are in their 30s. Growing is never easy, but when it comes to finances, in particular, things can get through and, thus, why we’re confident they aren’t telling you the truth. 

As much as we want to tell ourselves that money doesn’t make happiness, it is a fact you can barely live without it this century, and the more you have, the easier it can be to have a standard and good life. 

Now, as a teenager or young adult in their 20s, you may not worry too much about this aspect… until you’ve reached your 30s and still without a single penny, you can actually rely on. 

We are trying to say with all this that the older you get, the harder it will be to deal with your finances, and money mistakes are common and, usually, the ones holding you back to grow in every aspect. 

During your 30s, in particular, you will usually face more challenges that involve acquiring your own assets real estate and making sure you are saving enough money without forgetting about living your life. 

This sounds easy, but it tends to be hard as you must have worked during your 20s or, at least, acquired some habits that will make it easy by this point and the following years. 

Since we know people focus more on what they’re doing right compared to what they’re doing wrong, we figured it would be more useful to go over the most common mistakes people in their 30s make and help you recognize them to address and resolve them ASAP.

Money Mistakes People Make in Their 30s #2 -


We know it sounds funny, and, at first glance, it doesn’t feel like it’s related to our topic, but this is far from true.

This is a term used to describe people who try to keep up with others—and some even use Keeping Up with the Kardashians—even if it means living beyond their means. 

It’s common to be influenced and jealous of what many of your friends or close family are achieving, but you can’t expect to keep the pace just because you’re trying to “fit” in those expenses and their lifestyle. Don’t let yourself be enticed by such things. 

This can not only have a negative impact on your financial health but also on your mental well-being.

You need to be independent, set your own personality apart, and understand that the fact you aren’t able to afford some expenses your friends can doesn’t make you less nor means you won’t be able to do it in the future. 

Thus, you can keep up with them and join for some events or outings, but if you can’t keep up, there’s no need to do it in the first place.

But how can you know if you have this “syndrome”? 

Credit card debt is one of the most obvious signs of “Keeping up with the Joneses.” We all know how useful they are at giving extra points, benefits, and just lending you the cash you don’t have at the moment… but they’re equally dangerous for the very same reason. 

In the end, you’re often left with a debt you’re paying with minimum amounts and yet spending without concerns. This will only lead you to more expenses interest rates, and we can just keep going for hours. 

However, remember that this isn’t the only “symptom” for this whole mistake and “trend” people follow. 

Money Mistakes People Make in Their 30s #4 -

Being Underinsured or Not Having the Right Insurance Policy

Insurance is something that many people hate to purchase as it isn’t cheap and over 80% see it as something they will never use. 

Although it is true many people don’t get to use their insurances, it is a blessing, yet it doesn’t mean it isn’t worth paying for one. 

Uninsured can have devastating financial consequences as you will have to pay from your savings or capital for any accidents or health issues. For example, a job accident or medical emergency can alter your financial situation and ruin all your effort just because you didn’t want to pay a fee or specific amount for a policy that can save you millions.

There’s usually a saying for this that goes, “it’s much better having it and not needing it than needing it and not having it.”

With this in mind, we would recommend focusing on at least one of those insurances so you can establish your financial status in a steady place: 

  • Term insurance replaces income lost due to the death of a spouse or children (life insurance).
  • To ensure that a large medical bill does not force you into bankruptcy (health insurance).
  • To ensure your family’s standard of living, to cover you if you become disabled or are unable to work (incapacity insurance).
  • Renter’s insurance for those who don’t own their home. This will cover you in the event of theft, damage, flooding, or any other type of catastrophe.

Money Mistakes People Make in Their 30s #5 -

People Don’t Save for Their Retirement… Not Enough

Retirement can seem distant when you are in your 30s. However, every dollar saved for it now will accrue compound interest over money saved in your 40s or 50s, and you won’t have to worry about it later—not as much, at least. 

We know it can be hard to think about the future when you’re busy enough trying to survive and deal with your daily life. However, you will thank us for reminding you how this is one of the worst mistakes someone can make.

By the time people reach their 50s or 60s, they tend to be short in money and continue working since they’re unable to find jobs that provide the same benefits or salary.

Now, is it truly worth it? In our experience and most people who focus on achieving this goal, this is the best guarantee you can get on your savings. Set up an IRA to automatically transfer money from your checking account every payday so you can set a specific amount apart without effort.

Money Mistakes People Make in Their 30s #6 -

Inability To Maintain an Emergency Fund

An emergency fund is essential in case of an unexpected event, such as unemployment, illness or injury, or a large unanticipated bill. Similar to not having an insurance policy, this can prove to be financially devastating.

It is vital to have separate savings account in case of an emergency, and we are not referring to the same one as for your retirement. 

We know; we’re telling you to have hundreds of saving accounts so far, but we promise they don’t have to be anything big. 

Whenever people are trying to maintain an emergency fund, they believe it’s necessary to go big or do nothing. This is not the case.

Your emergency fund can be founded with a small quantity each month, which can be even compared to how much you would spend eating out, and all you’d have to do is to eat two or three meals more at home—this is just an example.

Those who have reached their 30s start noticing how many expenses they have and the ones to common if they’re building a family, established one, or are working on personal projects. 

Believe us; this fund could be life-saving.

You should have enough cash in your emergency fund to last at most six months. However, keep in mind that your emergency fund should grow with your expenses.

Money Mistakes People Make in Their 30s #7 -

They Usually Fail in Creating a Budget

It doesn’t matter what age you are; knowing how much and where you spend it is crucial if you want to save for your future or even have for present expenses. 

However, many people fail to handle this, especially those in their 30s, as they believe a stable job or source of income is enough for them to spend the money on whatever they want without having a budget. 

We know it can be a bit annoying to work around a budget, but you can end up wasting all your money if you don’t know how much you’re spending on basic services but also the additional expenses like hobbies, food, or just anything you wish for or is unexpected. 

With this in mind, making a budget is not easy as most people tend to spend more instead of less or the exact amount they have established for themselves. However, it is a great starting point as you adjust to it. 

Just remember: a budget can make a difference in achieving long-term goals or falling into deep debt.

These are some tips to help you decide on your first budget:

  • Track the financial streams that you can count on. This is your net salary and not your gross salary. You can’t guarantee bonuses, so don’t put them in your budget before you receive them.
  • Keep track of all spending. This includes mandatory expenses (e.g., rent/mortgages and utilities) as well as optional expenditures (e.g., travel, dining out, and entertainment).
  • Compare your actual expenses to your budget on a monthly basis (or at minimum quarterly). If your spending exceeds your income, you should reevaluate.

Money Mistakes People Make in Their 30s #8 -

Too Cautious to Invest

Even if it is a dollar, investing needs to be done after some consideration. But did you know over 60% of people overthink it and lose opportunities in the process?

You’re here for the long-term, no matter if you’re just starting to invest or expanding your portfolio, but you won’t get started or earn experience in the process if you don’t take the first step and leave some of your fears aside. 

If you consider your 30s are a great age to do so, you must think that there are approximately 30 years before you retire, then another 20-30 years when you retire. Inflation will reduce your purchasing power. 

This takes us to the main topic: you can’t be too careful when investing right now. 

Your time horizon is the time period between now and the time you will need the money. Be more conservative when buying short-term assets (such as a home) and more proactive when purchasing assets that have a longer time horizon (such as retirement accounts).

Your tolerance for volatility will determine how much you are able to handle. This helps in determining the asset mix (diversification) of your investment portfolio. Fixed-income investments, such as cash and bonds, are riskier than equity investments (stocks).

Equity investments also provide greater long-term returns than fixed-income counterparts.

Equity portfolios are essential if you want to keep your purchasing power and beat inflation.

Because you have a long-time horizon, stock market volatility can be managed. There has never been a 20-year period in stock market history when equities produced a negative return.

Don’t react to market conditions too quickly. Don’t let your emotions dictate your investment decisions in the short term. Also, don’t try and time the market. 

You Aren’t Investing in Yourself

Are you interested in starting your own business? Are you looking to buy a second house? What type of vacation do you want? When was the last time you even ate at your favorite restaurant?

Think about your ideal lifestyle now, in the future, and during retirement. What are your plans to achieve each of these goals, and how will you do it?

Most people start to take financial independence seriously in their 30s. A strong, comprehensive financial plan is a great way to achieve your financial goals.

Avoid the dangers that can hinder your financial independence.

But with that being said, what’s our point in all this? The fact you’re not investing enough money in yourself either. 

The fact you don’t have a saving account, emergency fund, or aren’t investing, are enough reasons to know you aren’t going in the right direction. 

However, investing in yourself also means spending the money as long as it is for something efficient and effective, or that makes you happy and helps with your personal growth. 

Money Mistakes People Make in Their 30s #9 -

Too Much High-Interest Debt

When you use credit cards to purchase goods and services, you can incur consumer debt. Credit cards are simple to obtain and easy to use, making them easy to spend excessively. It’s easy to forget how much you spend on food and shopping.

Credit cards allow you to make monthly minimum payments rather than pay off the entire balance at once. However, this benefit is not always free. 

Many people don’t realize how much interest they are paying. You might be shocked to learn that your $1.000 purchase has become a $1.180 expense (or more) due to the fact you haven’t paid it off in full. 

Those numbers add up quickly if you can’t pay your monthly bill on time. Non-payment can also negatively impact your credit score.

The idea is that you create a plan to reduce the interest rate on the highest credit card you have until you are debt-free. You can also consolidate your debt and get a no-interest card to help you pay off the balance.

Not Having the Financial Discussion

People would rather talk about anything except for money. Why? Because having disagreements over finances can lead to significant conflict in relationships. 

Understanding how each person views money is crucial if you’re in a relationship. If you’ve built a family, you even want to have this conversation with your children once they are ready to take some responsibilities—but unlikely to be in your 30s for the latter. 

There is no right or wrong way to view money, but open communication is key to a healthy relationship with a financial plan that is achievable. These topics are just a few of the many you can discuss:

  • Are you more comfortable with separate or combined bank accounts?
  • Do you feel comfortable with taking on debt, or would you rather live debt-free?
  • How high do you accept investment risk?
  • Do you spend or save?

A meeting with a certified financial advisor and the creation of comprehensive financial planning is a solid foundation for the discussion. The planner can also act as a mediator between you and your loved one. 

Just make sure you don’t skip this part.

Not Maintaining a High Credit Score

You probably know that having a high credit rating will allow you to get more credit at a lower rate. The best way to build credit is to charge your expenses and then pay them off instantly. This creates a solid credit history. 

Failure to pay on time can lead to a rapid drop in it. This could result in higher insurance and interest rates that will leave you empty as you make more money. 

Each of the three national credit reporting agencies will give you one free credit report every 12 months, so you don’t need to worry about working on the statistics. Just worry about working around improving your credit score. 

The issue with this is that your credit score symbolizes how your finances are doing, and if you maintain a positive or high one, that means you’re steady in your financial status. 

Money Mistakes People Make in Their 30s #11 -

Buying a House That You Can’t Afford

The “28/36” rule is a common convention in the mortgage industry. 28% should be spent on housing and 36% on total debt, including the house payment.

Many people purchase the most expensive house they can afford because they find that being fancy or going all in for the place they’ll live in is a good reason. 

However, no matter the reason, that strategy has a flaw. 

Housing is a controlling expense. You will pay more for other expenses if your home is more expensive than you paid and includes more appliances or areas as there’s more to maintain. 

These expenses include homeowners’ insurance and utilities. You also have to consider furniture and entertainment items.

A better financial decision is to purchase a smaller house than you can afford. Instead of spending 28/36 on the house, limit your house payment to 20% of your stable monthly income and keep your total debt below 25%.

This will allow you to save more and invest more money. It may also enable you to comfortably pay your house loan if you lose one source of income.

Spending Too Much on The Good Life

It is a good idea to live your life and spend some of your money on what you want and loves, but don’t go crazy about it.

Although you can spend about $100 or less during your outings to your favorite restaurant, the rest of the money you would spend on it could go to better expenses. 

If you take the time to go over your actual expenses, you will notice you don’t spend $100 either but rather more considering other mischievous activities.

Set a budget to control this expense—as we mentioned earlier. 

If you have been spending $1.000 per week on entertainment, reduce that by half and then work with the budget. Next, learn how to save money and invest it.

Money Mistakes People Make in Their 30s #12 -

You Spend More Than You Make

Millions of people live beyond their means and struggle to make ends meet their entire lives financially. The reason? They don’t have control over what they spend or, more like, they know they’re spending more than they can afford. 

It’s not enough to have a plan that will help you launch your financial future. It can make a big difference in your psychological health to have enough money at the end to save or pay off debts.

Sometimes, all it takes to reduce your spending is cutting down on unnecessary expenses like dining out, shopping, and other entertainment. 

You can probably free up cash at the end of the month by cutting down on impulse purchases. This will allow you to invest in long-term financial goals. 

If you are having trouble keeping up with your budget and you have cut all unnecessary spending, you might be able to consider more long-term solutions. You might be able, for example, to negotiate certain services like internet and cable or to contact your lenders to modify the terms of your monthly payments.

Money Mistakes People Make in Their 30s #13 -

Making Savings & Debt Repayment the Same

You might think that if your debt costs 19% and your retirement account make 7%, you can swap the retirement for the debt to pocket the difference. It’s not as simple as that.

You could also lose the power of compounding, and it will be very difficult to repay those retirement funds. If you have the right mindset, borrowing money from your retirement account could be an option. 

However, even the most disciplined planners may struggle to save enough money to rebuild their accounts.

The urgency to repay the debt is usually gone once it’s paid off. You may find it tempting to keep spending at the same rate, which could lead you back into debt. You can’t pay off your debts with savings if you don’t live as if you have any debts to pay to your retirement account.

Money Mistakes People Make in Their 30s #14 -

Too Much Emphasis on Saving Money

We know we have mentioned saving money so far, but don’t make it your life until you turn 60+ years.

You’ll burn out if you focus on budgeting and maximizing savings only. 

Although it requires attention, if you pay too much attention to the number in your savings accounts, it could cause you to miss out on social connections and unique experiences.

People don’t have the time to overcome the guilt associated with spending money. This includes money you have saved up for a specific purchase.

In other words, they don’t understand the pleasure and happiness to spend it on more than just saving.

Be friendly with it and remember: too much isn’t good, but too little isn’t either. You must find a balance in how to manage the whole saving process.

They Don’t Understand Every Penny Is Worth It

The secret to reaching your financial goals is saving money, and as contradictory as this is to the previous mistake—directly—it continues to be important to approach. 

As we have mentioned throughout the article, you’ve got two sides of the coin: the one that spends too much and the other that spends close to nothing. 

As mentioned earlier, your goal will be to get close to a balance, but what most people phase when doing so is to determine what needs to be done. 

Thus, they continue spending in the same variations like going out for food but only minimal, while others go to the extreme and never go out nor enjoy their lives and money they’ve made so far.

But then, we have the worst side of those who spend all the money without a care in the world. In those cases, this is what you can do:

  • Your dreams can be used as motivation to do some of the hard work that lies ahead. If saving money for a house is a priority, this goal should be the first on your list.
  • There are many ways to save money than you think. Instead of spending a lot on lunch at work just to save a little money, you can bring your own sandwich and save some cash.
  • Consider allocating 50% to essentials (housing and medical care, transportation, food, and debt payments)
  • Try to contribute 15% to your retirement savings, including your contributions and any contributions from your employer.
  • To cover unexpected or one-off expenses such as a wedding or the replacement of your dishwasher, consider allocating 5% from your take-home pay to savings.
  • Any leftovers can be used for other purposes.

Although this guideline is helpful, it is still a good idea for you to thoroughly understand where your money goes.

And, please, just make sure you are avoiding the same mistakes most people in their 30s are making when they are actually easy to deal with as long as you keep your mind going around in-between this whole phase in your life.

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