20 Money Traps to Avoid in Your 30s

In this section The National Debt Review Center explains, 20 Money Traps to Avoid in Your 30s.

Getting into middle adulthood, it’s really a major shift in priorities. Once you stop needing to count the days to your next paycheck and starting to make a little more money, it’s time to start really planning out your financial future.

Really easy to avoid doing this because you’ve never had to do it before in your life, because what was the point? Right, You’re eating, you know, hand to mouth, but now not so much hand to mouth.

There are so many things that get in the way of doing that and you may not even realize it. So let’s talk about some of these.

Now that you have a better income, right? Don’t let social obligations strip it away. There are six money traps that you should avoid at all costs.

Buying a car that’s out of your price range.

“The first time I made money, right when I started investing, I had a good year. I bring in a bunch of money. I think I made eighty-three thousand dollars. I went straight out and bought a JAG. I mean, come on, I’ve been in Volkswagens. Carlee’s I bought a JAG man. I send that car. It felt so good. I felt so cool.

I drive it around everybody obviously admiring me for my fancy car and that lasted about two weeks. And then I figured out, huh, nobody really cares at all. So don’t buy a fancy car to impress people you don’t like or don’t know just because you can. People don’t care. You know, you need transportation, but there’s so much variability in price that you have to spend wisely. So new cars can be one of the biggest money pits a person can get stuck in” – Phil Town

Do not buy a car that is out of your price rage when you want to build up financial freedom, it is just going to be something that gets in the way. A car fresh from the manufacturer loses about thirty percent of your value of that car in the first year and half of it by the end of three years.

Buying a house that is too expensive for you.

Owning a home that increases in value is a really good practical expense. But there’s a point of diminishing returns when you are funnelling every dime you have into a bond on a home that you can’t really afford, then you have no money left for emergencies.

You have no money left for investing. You had no money left, period. And the strain on you, your marriage, everything can be brutal. A monthly payment that you can barely manage can place an enormous weight on your budget for twenty to thirty years on average.

Instead, might be a better idea to keep an eye on a local market and buy when you can get a home in a good neighborhood for a moderate price that you can handle.

Spending too much going out.

You would be shocked by the effect the little expenses can have.

Having an expensive, significant other.

Even if you’re master of your own money, other people may have a habit of getting in the way of your financial plans in a big, powerful way. Failing to communicate about how you’re working your spending habits with your significant other is a major cause of relationship trouble for married couples and committed couples.

Avoid credit card debt, debt consolidation, or debt in general.

Your budget will get eaten up with interest payments. It’s a dangerous game. You better not play it. There’s an easy way to stop the cycle. Debt Counselling and you can see if you qualify free HERE

Not investing.

The earlier you start, the more you can accumulate. So beginning investments and beginning with planning for financial freedom is all about the balance between paying your expenses, eliminating current debts, and always setting aside money that can help you get to your goal of having the life you want.

Always pay yourself first.

Ten percent of your income first and live on the rest of it.

Not having financial goals.

Not Educating yourself or being financially literate.

Running with Expensive Friends.

If you keep company with free spending friends, you’ll probably be tempted to get caught in the game of trying to keep up. But this is one of those games if you win, you really lose – at least from a financial standpoint.

Work to steer your social contacts toward less expensive activities. It can help them too. But if they refuse, it may be time to get more frugal friends.

Not setting or creating a college funding plan for your children.

ids really do grow up fast. And when the time to go to college starts getting close, it’ll seem even faster. College is expensive, and getting even more so. The more you can salt away now to cover the cost, the less you and your children will need to rely on crippling student loan debt.

Putting your children above your financial security.

When you have kids, their needs are very real and immediate. As a parent, the desire to provide for your kids and give them the best possible start is strong, natural, and healthy.

Parents can quickly fall into the trap of feeling like they have to give their child every toy, lesson, or advantage — or else they are failing.

It’s all too easy to put your child’s wants before other important needs. Whatever form it takes, spending on kids must be balanced with your own future financial security. Because the thing every child really needs is financially secure parents who can support them and show them how to set healthy money priorities.

Letting your professional life stagnate.

Equating success with a life of luxury

As you become more established in your career, it’s easy to feel like your lifestyle should match your level of financial success. This is known as lifestyle inflation, which drives you to spend more without increasing your net worth or improving financial security.

It will keep you feeling broke and like you can never get ahead, even as you make an income you could only dream of as a broke 20-something college student.

How we use our money shouldn’t match our neighbor’s spending, or our age, or even our salary. Our financial choices should reflect our values and center on investing in our future and our priorities.

Getting married without talking about finances.

Spending too much money on the wedding.

Many couples delay marriage until their thirties when they are more financially secure and have established careers. As a result, couples often elect to cover the costs of the wedding themselves rather than burden their parents with the expense.

The average cost of a wedding in South Africa ranges from between R70 000 (on the low side) and around R250 000 (on the upper side), and can increase quite rapidly depending on the number of guests.

Starting out one’s life together saddled with debt can create enormous tension within a relationship, especially if the couple’s views on the wedding were not aligned, to begin with.

Many couples report feeling pressured by their parents and friends to have a more elaborate wedding than they would normally have opted for, something they will quite literally pay the price for in the years to come. Rather than borrowing money to pay for the wedding, it would be more prudent to save towards a reasonably priced wedding even if it means delaying the wedding for a year or two.

Coupled with a house, vehicle and retail debt, excessive wedding debt can cause untold stress and anxiety on a newly married couple. – Moneyweb

Making debt a way of life.

Not protecting your income.

While young and in the process of building wealth, it is essential to protect one’s greatest asset – your income.

Your income allows you to service your debt, maintain your standard of living and fund for your retirement years. If for whatever reason, you were to become disabled or ill and unable to generate an income, it would be wise to ensure that you have an income protection benefit in place that would essentially pay your current level of income, increasing with inflation, until you reach age 65.

Failing to set up an emergency fund

Assuming you’ll be richer in the future.

Don’t fall into the trap of overspending in your 30’s, based on the assumption that you’ll have loads of income in your 40’s to pay off your debt. Save, invest, and do your future self a favor by living within your means and not digging a bottomless pit of debt. Your 40-something self will thank you for it.

As always, if you need more information please feel free to contact our Team on 0878221249 or email us at info@ndrc.org.za