30’s are typically a time for settling down after the 20’s where the young and fun loving couples have taken enough of risks and found what they are really passionate for. Many people are busy raising their families or climbing up the ladders of success in their careers. These are typically the make or break years in people’s lives even when it concerns their finances. Due to lack of knowledge and laxity people often land up making mistakes, the brunt of which is felt in their 50’s and not now.
1. Going overboard on expenses without a plan of action
Now a days almost all households with couples in 30’s have double income and earn pretty well. While keeping busy in raising families and climbing the ladder of success, people often overlook the expenses that are being incurred. I often hear people saying “Life is short; let’s make the most out of it”. But what they forget is what they earn today is not just meant to manage today’s expenses but also the expenses that would fall on them tomorrow. This happens because they do not have a Plan to Spend.
2. Keeping up appearances for family and friends
For many, there is a strong drive to appear successful to the people around them. And to keep that up they often spend a lot on nice home furnishings or nice car or branded clothes etc. The things are often expensive and it’s not a sign of financial success rather it’s sign that you not spending on things such as on eliminating debt or saving for future expenses such as retirement or kids higher education etc.
3. Spend too much on kids
Becoming a parent is one of the best feelings in the world. Planning starts before the baby even arrives. As parents we make sure that everything whether it’s their pram, new room, clothes, toys, etc. is in place before the kid even asks for it. It is so tempting to spend money on your tiny tots. But what people miss out is that it’s not just about what they need today but also about their needs tomorrow such as their higher education their wedding etc. It may seem that it’s too early to think about it today, but remember the time is not too far when they would be discussing about What they Want to Be.
4. Put Retirement on the backseat
Very rightly said by someone that “Young won’t understand the pain of being an old until they are”. High income and success often brings along with it aspirations to own the best of the things, to have a great lifestyle etc. Amongst all this retirement often takes a backseat as it’s difficult to save for a goal that’s too far – “Your Retirement”. People often think it’s too early we’ll do it later as the expenses are high as of now. But what they forget is that from here the expenses would only rise. Life will always get in the way, either you do it today or do it never.
5. Overload themselves with debt
These days almost everything is available on debt whether it’s as big as a home or as small as a mobile phone. I often say assuming a debt is not bad as long as you know the difference between a good debt and a bad debt. Another mistake that people in this age group make is fulfilling their wants through debt whether it is about taking a loan for buying a house for investment purposes or going over-board with credit card purchases. These debts could put them under serious financial crisis if the life would not go as it was planned or thought of.
Though you missed on some years but you still have time to put your financial house in order before it gets too late and you can do nothing about it. Remember you cannot make up for the lost time.
