How to Avoid Money Mistakes in your 30’s

In our 20’s, we are faced with countless money problems while we learn how to navigate through our newly found financial independence. However, if these problems are propelled into our 30’s—we could find ourselves in a pool of a jeopardized financial future.

As by nature, the older we get the more financial responsibilities are place on our shoulders; and if we don’t manage them efficiently, we are bound to face immense financial difficulties. These worries are not only limited to money matters but also affects negatively on a mental and personal level.

So, keep reading to find out how you can avoid money mistakes and worries when in 30’s!

Credit over Cash—A Big No!

In your 30’s the idea of having a credit card can sound pretty exciting as it comes with multiple benefits, such as rewards, discounts, convenience, and of course the security of knowing that credit cards are easily replaced, whereas, cash isn’t. While it may bring numerous benefits, it can also cause a financial downfall when used needlessly and irresponsibly.

Studies have revealed that, people who spend through their credit cards are bound to spend more, when compared to those making cash payments. With a credit card, it is easy for people to spend and afford products/services that they could otherwise not afford through cash. However, little do they realize about the debts and interest rates being accumulated. And, if you fail to make timely payments, your credit score takes a hit.

Therefore, a smart way to save from the distress is to shop with cash. Of course you can keep your credit card but to only spend on goods that you can afford to pay off later.

Neglecting life insurance/retirement savings

Matters such as life insurance and retirement savings are easy to neglect, especially when you are in your 30’s. This is because; during this time you are bound to face complex financial issues, such as: spending on marriage, babies, house mortgage, etc.

However, during this process, people often tend to overlook the unpredictable. Life insurance can help your loved ones live in the comfort as provided by you, given that you are faced with sudden death. As a result, your demise will not have a dramatic change in their lifestyle. Therefore, consider having an insurance policy as well as a retirement plan to save immense amount of money by the time you roll into your 60’s.

Not going budget friendly

Going over the budget is one of the biggest mistakes people tend to make around the world. If you want to be smart with your finances, start with mapping out a budget plan on an annual basis. Without a budget, you are bound to spend beyond your pockets.

Budget helps you to stick to reality. Such as, realistically afford a house mortgage, car and other expenses. Often times, people avoid budgeting as they feel it limits and deprives them of their wants. But, as a matter of fact, it only shows you in black and white how much you can afford to spend in relation to your earnings.

Your 30’s are the time of life where you should be straight and serious about our finances. Hence, if you want to achieve a debt free financial security in your 30’s combine the aforementioned ways to keep financial worries at bay.

You Saved a Lot of Money? Is it Okay to Reward Yourself Now?

Saving money requires time and vigilance. Smart people take part in effective savings plans and ensure that they do not overspend on the luxuries that they cannot afford with their income. Good money savers may find that they are in an excellent financial position with savings of just a few years. A question that often arrives at this stage is that “What is the right time to reward yourself?” It is always better to answer this question by deeply studying your lifestyle and the way you want your future to pan out.

You cannot save the money that you have in a few months. You must have saved a large sum by calculating your financial requirements over a period of time and ensured that you always spent under the available income. You must have limited your expenses and you may have been living a frugal life. Are you ready to let go of this lifestyle and reward yourself handsomely? Consider these factors first before making the final decision.

Reward Sparingly

It is good to reward yourself if you have maintained good spending habits and ensured that there is a lot of money in your coffers. However, always ensure that your rewarding act should not empty your savings nor put a large dent in them. Plan your rewards so that your monthly savings are always increasing your main saving. There should never be a month with negative saving.

Reward when Your Reach a Goal

This means that you should reward once you reach an important financial goal. You need to plan financial goals for you and break them down in important steps. You can then give yourself incentives by planning a reward after achieving a particular number of objectives. Be sure to design a reward activity that in turn may be good for your finances.

This means that you can enjoy an international trip to countries where you may find good opportunities for business activities. You may also plan to go to a spa where you possibly meet people who can be your future clients.

Reward to Save More

This is an amazing kind of reward often employed by hard core money savers and frugal life experts. They believe that once you are able to save a particular amount of money through healthy habits, it is simply time to expand your range and find healthier spending habits to further increase your routine savings.

This means that you need to become further efficient as a reward of achieving a particular goal of saving.

Never Reward with Emergency Money

If you have put your savings with the intent of using them in an emergency, then you should never reward yourself with this money. You may ideally reward yourself in terms of buying a book or going to watch a movie when you save the next sum of money.

These are few important points that you need to consider before you decide to lavishly reward yourself for saving a lot of money. If you saved a sum of money, then you ideally target a greater sum rather than spending it all on expensive rewards.