Money Mistakes I Made in My 30's - Good Life. Better. (2024)

As shared in a previous post,Life Without Money Worries, it wasn’t until 2014 that I finally started really engaging with my money. I hadn’t done everything wrong with my finances up to that point, thankfully, but the situation definitely could have been rosier.

At the time, I had just turned 41 and the future weighed heavily on me—was I ever going to stop feeling anxious about money? Would I ever be able to retire? If I needed to, was I in a position to help my family?

I tried not to obsess over the mistakes I had made along the way but to focus instead on the future and doing the next, best thing.

Flash forward four years and I’m amazed by how much has changed. I’ve paid off my non-mortgage debt, doubled my net worth, and gotten several promotions which boosted my pay. I’ve even started a side hustle and this blog!

There is a little bittersweet in all of this, however. Despite my best effort to squelch it, I can’t help but wonder what my life would be like now if I had started engaging with my money a few years earlier. Where would I be if I hadn’t made these money mistakes?

Since I don’t have a time machine I can use to go back and fix things, I’ve decided to write about my mistakes in the hopes of helping others take action sooner.

Mistake #1: Not Cash-Flowing Law School

When I decided to go to law school when I was 32, I thought I was being responsible when it came to taking on student loan debt: I had already paid off my debt from undergrad and planned to borrow only what I needed to cover tuition costs (so nothing for fees, books, or parking).

What did not occur to me was that I didn’t have to take out student loans at all. Paying for tuition as I went would have been tough but doable. And it wasn’t as if I had a lot of time to spend money on things while I was working full-time and going to law-school part-time. (Just thinking about this missed opportunity makes me grind my teeth).

If you are thinking about going back to school, please consider cash-flowing your degree. Or heck, figure out a way to get what you want without going back to school at all. You may be surprised with what you can make happen!

Mistake #2: Not Saving More Each Time I Got a Raise

Money Mistakes I Made in My 30's - Good Life. Better. (1)

I got promoted a lot in my 30’s. Which is great, of course—I’m not complaining. But while my pay nearly tripled during that time, my savings rate increased by a measly 2 percent, from 10% to 12%.

What the hell was I thinking? I managed to save 10% when I was making $35,000 a year but no more than 12% when I was making $90,000?

The only way I can explain this is that a lot of the personal finance information I had read up to that point recommended saving 10% which made me feel like I was killing it by saving even more. News flash: all I was killing was my chance to retire even earlier.

Mistake #3: Not Prioritizing Getting Out of Debt

Given that I wasn’t saving it (see Mistake #2), you would think at a minimum I would have been using the salary increases to pay off my debt as fast as I could. But nope, I wasn’t.

I financed my car with a six-year loan. I was on the 25 year student loan repayment plan. And I was content with revolving credit card debt hovering around $6,000.

This explains why, when I finally decided to get out of non-mortgage debt in January of 2017, I still had almost $60,000 to pay off.

Well, as I noted above, I don’t have a time machine to go back and change things so I didn’t waste thousands of dollars on interest on my debt, so I am just going to have to let it go. It may have taken way longer than it should have, but at least the debt is gone now.

Mistake #4: Ignoring Lifestyle Inflation

So, if I wasn’t saving it or using it to pay down my debt, what happened to it? Well, I think it went for the “necessities” that befit my new status. And for meals that helped me wind down from a rough day at work. And even for some new furniture I could sit on as chilled out watching shows on a new TV. Basically, it just went.

What I know now is that the accumulation of these smaller purchases can be as detrimental to your budget as buying that one extravagant handbag or taking that pricey cruise. They might even be worse because you’re unlikely to take a cruise several times a year whereas you may not think twice about spending enough each quarter at restaurants to cover a nice vacation. I know I didn’t.

Fortunately, with the help of a spending fast in the summer of 2016 and my decision to get out of debt in January 2017, I have been able to regain control of my spending. Does this mean I am super frugal and never eat out? No. But it does mean I am more mindful about my spending, telling my money what to do instead of letting it slip through my fingers.

Do You Have Any Money Regrets?

Seeing these regrets in black and white makes me want to do some sort of cleansing ritual, like write them on a piece of paper and set it on fire, or to stick it in a bottle to send out to sea (which I would never do because that’s too much like littering).

Maybe such a ritual isn’t necessary, however. Maybe my actions since 2014 have already served to wipe the slate clean.

Yes, my finances would likely be in even better shape if I had not made these mistake but I can’t know for certain. All I can do is identify the next, best action I can take.

What regrets do you have? What is your next, best decision? Let me know in the comment section below.

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Money Mistakes I Made in My 30's - Good Life. Better. (3)

Money Mistakes I Made in My 30's - Good Life. Better. (2024)

FAQs

What are the biggest financial mistakes Americans make? ›

This brief list represents five of the biggest mistakes financial experts say Americans commonly make, and how you might sidestep them.
  • Believing an emergency fund is a pipe dream. ...
  • Carrying credit card debt. ...
  • Putting off retirement saving. ...
  • Impulse buying. ...
  • Not writing a will.
Feb 1, 2024

How to build wealth from nothing in your 30s? ›

7 tips to build wealth in your 30s
  1. Solidify a financial plan.
  2. Get rid of debt.
  3. Get your employer's retirement plan match.
  4. Contribute to an IRA.
  5. Maximize your retirement savings.
  6. Stick with stocks for long-term goals.
  7. Potentially build wealth by purchasing a home.
Sep 12, 2023

What are the financial blunders? ›

The article discusses common financial mistakes such as overspending, not following budgeting rules, failing to plan taxes, unnecessary debt, having too many credit cards, neglecting credit score, not making investments, ignoring inflation, skipping retirement planning, and not reviewing financial plans regularly.

How to avoid financial pitfalls? ›

In this article:
  1. Identify the problem.
  2. Make a budget to help you resolve your financial problems.
  3. Lower your expenses.
  4. Pay in cash.
  5. Stop taking on debt to avoid aggravating your financial problems.
  6. Avoid buying new.
  7. Meet with your advisor to discuss your financial problems.
  8. Increase your income.
Jan 29, 2024

What is the number one mistake people make in the financial world? ›

1. No budget, no financial plan. Let's face it – if you don't know where the money goes, you could be spending more than you earn. Everyone, regardless of income, needs a budget.

What is your biggest financial regret? ›

The top regrets included not having a big enough emergency fund (mentioned by 28% of respondents), not investing aggressively enough (25%) and not buying a house when they were younger (22%).

What is considered wealthy at 30? ›

The net worth you should be aiming for in your 30s is between $25,000 and $100,000, according to Crissi Cole, founder and CEO of Penny Finance.

Where should I be financially at 35? ›

One common benchmark is to have two times your annual salary in net worth by age 35. So, for example, say that you earn the U.S. median income of $74,500. This means that you will want to have $740,500 saved up by age 67. To reach this goal, at age 35 you may want to have about $149,000 in savings.

How to become rich at 37? ›

How To Get Rich
  1. Start saving early.
  2. Avoid unnecessary spending and debt.
  3. Save 15% or more of every paycheck.
  4. Increase the money that you earn.
  5. Resist the desire to spend more as you make more money.
  6. Work with a financial professional with the expertise and experience to keep you on track.

What is the nastiest hardest problem in finance? ›

Bill Sharpe famously said that decumulation is the “nastiest, hardest problem in finance”, and he is right. What's less well-known is Bill Sharpe's proposed solution to this problem, which he called the “lock-box approach”.

What is the most common saving and investing mistake people make? ›

Common investing mistakes include not doing enough research, reacting emotionally, not diversifying your portfolio, not having investment goals, not understanding your risk tolerance, only looking at short-term returns, and not paying attention to fees.

What financial mistakes should one refrain from? ›

Top 9 Common Financial Mistakes You Should Avoid
  • Ignoring the Fundamentals of Budgeting.
  • Getting Debt with High-Interest Rates.
  • Ignoring Savings for Emergencies.
  • Ignoring Extended-Term Planning.
  • Living Over Your Means.
  • Ignoring Insurance Protection.
  • Hasty Investing Choices.
  • Ignoring Financial Literacy.

What to do when financially broke? ›

Budgeting When You're Broke
  1. Avoid Immediate Disasters. ...
  2. Review Credit Card Payments and Due Dates. ...
  3. Prioritizing Bills. ...
  4. Ignore the 10% Savings Rule, For Now. ...
  5. Review Your Past Month's Spending. ...
  6. Negotiate Credit Card Interest Rates. ...
  7. Eliminate Unnecessary Expenses. ...
  8. Journal New Budget for One Month.

Why do most people struggle financially? ›

The high cost of living, wealth inequality and job market uncertainty have all contributed to financial vulnerability, even among wealthy families.

How to increase income? ›

Increasing your Income
  1. Turn Your Hobby Into A Business. If you have a hidden talent or passion you'd gladly spend more time working on, you can probably find a way to use your skills to turn a profit. ...
  2. Ask for a Raise. ...
  3. Teach What You Know. ...
  4. Rent Out a Room. ...
  5. Go Back to School. ...
  6. Look for a New Job. ...
  7. Get a Second Job.

What are the main reasons Americans have financial problems? ›

Make sure you check out the linked resources that could help you prevent and/or eliminate a specific financial stressor.
  • Too much debt/Not enough money to pay debts. ...
  • Lack of money/Low wages. ...
  • College expenses. ...
  • Cost of owning/Renting a home. ...
  • High cost of living/Inflation. ...
  • Retirement savings. ...
  • Taxes. ...
  • Unemployment/Loss of Job.

What are two mistakes Americans often make when it comes to money? ›

Describe some of the mistakes Americans often make when it comes to money. Getting loans. Buying things they can't afford. Going into debt.

Why do so many Americans struggle with money problems? ›

The high cost of living, wealth inequality and job market uncertainty have all contributed to financial vulnerability, even among wealthy families. Concerns about personal debt, including credit card, auto loan and medical debt, are significant sources of financial stress.

Is the average American struggling financially? ›

After inflation, high interest rates, unattainable housing prices and other economic factors, 50 percent of U.S. adults say their overall personal financial situation is worse than it was in November 2020, according to October 2023 Bankrate polling.

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