Many financial advice articles are geared toward people in their 20s, and with good reason: as a 20-something, you’re likely new to managing your own finances, and a good foundation can set you up for a great relationship with money.
But once you enter your 30s, you’ll likely have different considerations, and you’ll want to watch out for new financial pitfalls. Suba Iyer highlights money mistakes people make in their 30s in a recent post on Get Rich Slowly.
“I think I’ve become pretty careful about our finances,” Iyer writes, but even she admits getting caught in a few of these traps. Here’s what she covers:
Prioritizing Your Kids’ College Funds Over Your Own Retirement
While Iyer recommends starting to put money toward a college fund for your children instead of more clothes or toys, she points out that parents shouldn’t feel pressured to fund every dime of their child’s education.
“You should save for your children’s college tuition but not at the expense of your own retirement,” she writes. “Make a budget, fund your retirement, and then find ways to save more money to fund college.”
In addition to what you’re able to contribute, your kids can look for alternative ways to pay for college, like scholarships.
Ignoring Insurance Needs
Worker’s compensation may cover job-related injuries, but think about a car accident or health concern that renders you unable to work. Your bills will still need to be paid, and long-term disability insurance can get you through tough times.
Iyer notes that it’s better — and often much cheaper — to pick up an insurance policy when you’re young and feeling invincible. Don’t wait until you’re in the hospital to try to get covered.
“When it comes to insurance… it is better to get your own policy and not depend on your employer,” Iyer writes. “If you change your job, you will lose that insurance and then replacing it will be that much more expensive. This type of insurance is less expensive in your 30s than it is later in life.”
What Other Common Money Mistakes Could You Be Making?
Managing finances in your 30s sounds like that old comedy act where someone spins a lot of breakable plates on thin sticks: You’ve got to balance a lot of financial reminders and plans in order to make the most of the decade and the years beyond.
Read the rest of Iyer’s tips to make sure you keep your plates spinning and set yourself up for success.
Your Turn: Have you made any of these mistakes? What smart money moves did you make in your 30s?