How much to save for retirement in my 30s? (and other burning questions)

How much to save for retirement in my 30s? (and other burning questions)

House, baby, dog illustration

Your 30s are a big deal. You may be starting a family or planning to make major purchases, such as a home. It's also a time when many begin to ask this critical question: How much to save for retirement in my 30s?

The short answer is most experts say you should be socking away 15% of your gross income by your 30s — that's your income before taxes and other deductions. But before you max out your company 401(k) or fund an IRA, it's also critical that you set aside cash for emergencies, at the very least $1,000 but preferably three months of living expenses. Going without this cushion could force you to turn toward debt during a financial setback. Becoming a steady and determined saver will also put you ahead of the pack when it comes to home-buying and college saving.

Experts advise that your 30s are a great time to fight against lifestyle inflation — this happens when you increase your spending with every bump in pay. If the 30s are a time of rapid career advancement for you, bank as much of each raise and/or bonus into emergency savings or your retirement accounts.

You will also need to eliminate any lingering money management mistakes.

Here's how one Get Rich Slowly contributor Suba Iyer navigated her 30s and what you can learn from it:

As I venture into my early 30s, I think I've become pretty careful about our finances. I certainly know not to continue on with the mistakes I made in my 20s like buying more car than I can afford or not paying myself first. But something happened last week that made me go, “Uh-oh.”
Now that spring is here, I went shopping to look for new clothes for my daughter. After a while, my husband looked at all the stuff and asked me, “Don't you think you're going a little overboard here? Why so much stuff?”


Key Takeaways

  1. Start by building an emergency fund first
  2. Aggressively add to your retirement whenever you get a raise or bonus
  3. Eliminate any lingering bad habits around saving and spending

I started to justify why we needed each item. And after a bit, I realized I was actually repeating myself: “Well, this looks pretty. And this is very pretty.” I could see the look on my husband's face. I just stopped. I had to admit that she only needed half of what I was going to purchase. She is a baby after all; she doesn't care about being pretty, only about being comfortable. Uh-oh, I am making new money mistakes!

When we reach our 30s, many of us have our careers on a steady path; most of us are married or are getting married; some of us have started traveling more, purchased a house and might even have a baby or two. But it's not a time to become complacent with our finances. If we aren't careful, we can make new money mistakes.

I guess that is true for every stage in our lives — we keep making new mistakes. But we can also keep learning from each other and avoid as many mistakes as we possibly can. Isn't that why we read this blog in the first place?

So here I am, compiling a list of potential money mistakes my 30-something peers and I should avoid. On the eve of my 40th birthday, I don't want to be thinking “I wish someone had told me this 10 years ago.” I will start with the one that served as my wake-up call and got this thought process going for me in the first place:

  • Buying too much for your child. I think every parent makes this mistake. In fact, compared to what I see other moms in my local mommy groups purchasing, I seem to buy very little. And what I buy is more than plenty. So I can only imagine how much money people are spending on cute clothes, shoes, blinking and screaming toys, even educational apps. I (and other parents) should just save that money and start a college fund.
  • Getting married without talking about finances. Maybe money is a touchy subject for people; but by the time you have reached your 30s, you should be more capable of negotiating difficult discussions. It is extremely important to be on the same page with your spouse when it comes to money. Otherwise, it can become a major source of conflict in your married life and potentially the reason it ends in divorce. Talk about finances with the person who will share your life and develop your monetary goals together.
  • Still having consumer debt. I have heard of excuses like “If only I were single, I would have paid off all this debt” or “I was paying off my debt, but we had a kid.” There will always be some new event in life; some exciting, some unfortunate. But if we choose to ignore our debt, it can become an obstacle that prevents us from pursuing opportunities that might better our lives. Take charge of your debt! Budget aggressively, earn as much as you can, and pay it off.
  • Buying more house or car than you need. A lot of people move when they have children, thinking they need more room with a kid than they did before. They take the same approach with cars, trading in their sedan for a big SUV. Why? We don't need giant homes or huge cars to raise kids!
  • Keeping up with the Joneses. Speaking of giant homes and huge cars, people of all ages seem to be afflicted with the desire to keep up with the Joneses — but unfortunately, it seems especially common among 30-somethings. Maybe it's the subconscious messaging of television advertising or the desire to be accepted in our social groups; but no matter what the reason, it is important to keep our spending within our means, forego lifestyle inflation, and chart our own financial course.
  • Ignoring a will. If you have a significant other or any children, please make out a will or set up a living trust. It may be unpleasant to think about death in your 30s; but you don't want your loved ones to go through the hassle of fighting the State to get what is theirs. While you're at it, get a durable power of attorney and healthcare power of attorney too!
  • Not having enough life insurance. Again, no one wants to think about death; but if you have anyone that depends on your income or your time, you need life insurance. And you have to get enough life insurance to cover the needs of your dependents, not just the minimum offered by your employer.
  • Not having long-term disability insurance. In your 30s, the chances of becoming disabled and not being able to work are higher than death. Most people have long-term disability insurance from their employer; but you should calculate how much you need and then purchase supplemental insurance. When it comes to insurance, life or long-term disability, it is better to get your own policy and not depend on your employer (unless getting your own policy is prohibitively expensive for some reason). 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.
  • Not re-evaluating your retirement goals. In your 30s, you have a new lifestyle; hopefully your income is different now than it was 10 years before when you started saving for retirement. If your income has increased since you formulated your retirement goals, have you done the calculation on how much you need in retirement with your new income and lifestyle? If not, now is the time.
  • Not paying attention to how your investments perform. You might have started your 401(k) with a very basic money market fund with the intention of learning about investing and doing a better job. Have you done that? Have you studied how your investments are performing and adjusted them based on your current goals and tolerance for risk? If you need help, now would be a great time to find a fee-only financial planner and see if you are on the right track.
  • Neglecting your children's education. If you have a child and intend to pay for at least part of their education, you need to start putting money away for college now. At the very least, start saving money in an online savings account until you fully research college savings plans.
  • Putting too much importance on your children's education. You should save for your children's college tuition but not at the expense of your own retirement. Make a budget, fund your retirement, and then find ways to save more money to fund college.
  • Going back to graduate school for the wrong reason. I am all for getting a graduate degree if it propels your career to new heights. But if you are going to graduate school after a job loss to avoid job-hunting or if you are going to grad school because you can't find a job with your undergraduate degree — particularly if you have not researched job prospects after a graduate degree — then you are making a huge mistake.
  • Not diversifying your income. It used to be that you stayed loyal to your employer and in return they took care of you. For example, each of my parents had one job throughout their working years. When they retired from their jobs, they each had a pension. But since that isn't the case today, we need to find ways to maximize and diversify our income. If you have a hobby that can make some money, pursue that. Try to generate income from sources other than your job. After all, job loss is no longer an uncommon occurrence and the only person who cares about your future is you.

Related >> Money Mistakes to Avoid in Your 40s

Related >> Money Mistakes to Avoid in Your 20s

Those are the mistakes of which I am aware. Some of these are things I notice myself doing and others I see happening with my friends. But unlike the mistakes we are likely to make in our 20s, these are born more from complacency, not necessarily naivete. The good news is that we 30-somethings can wake up, take charge of our finances and still hope to achieve our financial goals.

What mistakes do you think people should avoid in their 30s? If you see yourself in any of these items, do you see a way to change what you're doing?

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Tina in NJ
Tina in NJ
5 years ago

Once you get married, you need to update the primary beneficiary on all your insurance (particularly what you might get through work), retirement accounts, investment accounts, etc. A friend thought she had done so, only to see her parents’ named as beneficiaries when she checked. You don’t want to negotiate with your in-laws while dealing with all the other issues surrounding the loss of a spouse. And make sure the changes you made were actually done.

Beth
Beth
5 years ago
Reply to  Tina in NJ

+1! I remember reading somewhere that any major life change should prompt us to do some financial house cleaning. It could be a marriage, birth or death. Some of my single friends decided once they reached 30 or 35 to make their siblings their beneficiaries and power of attorney rather than their parents.

Jim Wang
Jim Wang
4 years ago
Reply to  Beth

I agree with this 100%, there are these major milestones that are often good reminders of when to review your finances. This was especially true for us and estate planning. I didn’t think about it until after we had kids, which is a HUGE milestone… and life change! 🙂

Nick @ Millionaires Giving Money
Nick @ Millionaires Giving Money
5 years ago

Very useful post. I’m in my 30’s and I can see myself making some of the mistakes listed here such as prioritising my kids education before my retirement. There are some very valid points here. Thanks for sharing.

Amanda
Amanda
5 years ago

Something I heard about the flaw in prioritizing one’s child’s education before one’s own retirement “One can get scholarships and loans for college, one cannot do the same for retirement.”

Beth
Beth
5 years ago

I hear the “if only I were single” lament from my married-with-kids friends. I think people imagine that being single in your 30s, 40s, etc. is like being single in your 20s. It’s really not the same at all.

On the flip side, I’d admit I’m guilty of sometimes thinking my life would be a lot easier if I had a spouse. It’s easy to idealize someone else’s lifestyle when we’re frustrated, but that doesn’t change the fact that we all have to tackle our own financial challenges.

Amanda
Amanda
5 years ago
Reply to  Beth

I never thought of the married with kid person who says “If only I were single” imagining it’s just like being in your 20’s but that’s a really good point and casts a different shadow on whatever follows the comment.

Jen From Boston
Jen From Boston
5 years ago
Reply to  Beth

I hear it from marrieds who seem to think of singletons as living a fancy free life. Granted, I don’t have to wash the dishes right away if I don’t want to, but I also don’t have anyone to pick me up at the airport after I get home from a long trip. I also don’t have anyone to help me move heavy items.

Well, at least I don’t until my boyfriend moves in 🙂

I think it’s one of those “grass is alays greener” things, as well as romanticizing the past. Still kind of annoying, though.

Rebecca
Rebecca
5 years ago

Yes. I also don’t have anyone to split the cable bill with, utilities, rent. I also don’t get big tax breaks.

I could sell half my stuff and just share his.

I’ve always thought marriage has great potential to save a lot of money given you share so much. You don’t need two of so many things when you’re married.

Josh
Josh
5 years ago
Reply to  Rebecca

Marriage itself is not that detrimental to finances in my opinion (other than my wife having slightly fancier taste than I). The problem is that marriage so often results in children. So far my one-year-old and three-year-old daughters have proven to be very poor investments–financially of course.

Mysticaltyger
Mysticaltyger
5 years ago
Reply to  Beth

Yes, this is spot on, Beth. I couldn’t have said it better!

Paul
Paul
5 years ago

It is actually a bit misleading to say that most people have long term disability from their employer. Most probably don’t. Market penetration is modest (less than 50%) and hasn’t been growing. Most people don’t know their own risk there. Ask your HR person if you have an LTD policy. The key metrics to evaluate it are: 1. At least 60% income replacement 2. A high enough maximum that you don’t “max out” and get a lower replacement rate 3. An “Elimination Period” that leaves no gap between your Short term and Long term Disability. If you don’t meet all… Read more »

SLCCOM
SLCCOM
5 years ago
Reply to  Paul

You should get your own disability policy as soon as you graduate and get your first “real” job. You could be between jobs, and you could become uninsurable at any time. Make sure you can raise the amount as time goes by.

As a bonus, that income is tax-exempt.

Dano
Dano
5 years ago

This is a good subject to dive into. Many of us are already well into being financially stable and planning for the future, but we don’t often think about the typical pitfalls that come around certain stages of life and how they can throw it all offtrack. For me, general lifestyle inflation is the biggest one that comes to mind. My wife and I are in our early 30’s and its hard not to get caught up in buying/upgrading while you are in the midst of buying your home, having a baby, getting a needed family car, etc. This is… Read more »

PJ Ryan
PJ Ryan
5 years ago

I think another one, closely tied to what you mentioned above, is having children without talking about finances. It’s hard to say what “spending too much in children” is if you haven’t defined that first (before the cute, cuddly baby is born and clouds your judgment :-)). Define what your priorities are (e.g. private school, college education, sports/extracurriculars) and then map out a plan to fund those. That helps keep you focused on what matters to you when you might start getting distracted by the adorable baby clothes at Target, or the super cute Mommy-and-Me swim class at the YMCA.

Kat
Kat
5 years ago
Reply to  PJ Ryan

+1! After hearing about the high cost of child care, I started socking away money into a baby fund almost two years ago, right alongside my vacation fund and other savings goals, even though we weren’t planning on starting a family for a few more years. Full time child care in my area can be $800-$1200 per month. That’s $10-$14K per year! I think of the baby fund as “prepaying” for child care, so we don’t have to bear the full cost all at once when we finally do start a family.

NewHouse
NewHouse
5 years ago

I’m currently struggling with the house aspect. I currently live in a relatively small 3 bedroom house that I bought long before getting married or having kids. We just had our 2nd kid. We originally decided we wanted to stay in the house long term, but update the house, starting with flooring and continuing to the kitchen and bath. We would like an additional bedroom for a kids play room and additional storage space. We are debating get a new construction house with all of the desired upgrades that is a 4 bedroom and has 50% more living space. The… Read more »

Kelly
Kelly
5 years ago
Reply to  NewHouse

Which is going to serve you better in the long term? Are they in the same school district? Would commuting costs be the same? Would property taxes and utilities be the same? Is the layout of your current house flexible to meet your current and future needs? My parents were facing a similar dilemma- do an addition onto a house that was over a hundred years old or build a whole new house. They opted for the new house. Although the addition to the existing house would give them more space, the rest of the house would remain split on… Read more »

getagrip
getagrip
5 years ago
Reply to  Kelly

I agree in that if it’s something you really would like, you recognize it as a “want” versus a “need”, and you can meet your other financial goals, then why not? It’s not like you can’t downsize after the kids are grown or that you have to live there forever if you don’t like it. Finances are, after all, personal and you have to deal with the choices one way or the other.

Christy
Christy
5 years ago
Reply to  NewHouse

Stay in your original house. Ditch the play room idea and get rid of some of the toys and things. In a couple of years you will be getting rid of these items anyway. Kids don’t need play rooms, dad’s don’t need a man cave, use the space wisely, sock your money away into your retirement. It will only be a few more years and the kids will be out of the house. It won’t kill a kid to share a room. And three bedrooms for two kids and mom and dad is plenty, really. Why can’t the kids play… Read more »

Jane
Jane
5 years ago
Reply to  Christy

Wow, you sound pissed!

SLCCOM
SLCCOM
5 years ago
Reply to  Jane

No, she sounds prudent.

Ross Williams
Ross Williams
5 years ago

I think several of these are just plain wrong: 1) People in their 30’s should not make saving for retirement a big priority. They have 30+ years until they retire and will then will likely only live 15-20 more years after that. Many will find they are no longer able to do a lot of the things they want to do. That doesn’t mean you shouldn’t save for retirement, it just shouldn’t be at the top of your list. 2) You don’t buy clothes for you kid because THEY want to look pretty, you buy them because YOU want them… Read more »

Jen From Boston
Jen From Boston
5 years ago
Reply to  Ross Williams

1: I disagree with you here. As long you already have your emergency fund in place, I think it is good to pump up your retirement savings. Putting it off is just going to lead to more procrastination, and then you’re stuck at 50 trying to catch up. Also, if you haven’t started having children yet then you should start socking away for retirement. Odds are once the kids enter the scene you’ll have to dial back the retirement savings, and when you’re 60 you’ll be glad you saved the extra money in your early thirties. And, saving for retirement… Read more »

Beth
Beth
5 years ago

I agree with your comment about #6. Some people find it easier to have their retirement savings automatically taken off their pay cheque — especially for employer matching. I’m a firm believer in setting savings goals and then figuring out your budget rather than the other way around. For instance, if you can’t afford to buy a house and save for retirement and emergencies, then you’re not ready to be a homeowner

Ross Williams
Ross Williams
5 years ago
Reply to  Beth

How do you set savings goals independently of knowing how much money you are going to need to spend to live? Setting a “savings goal” and then spending the rest is an open invitation to waste money on things you don’t really need or want. Deciding what you really need to spend and then considering everything else savings helps to make one really consider each purchase.

Beth
Beth
5 years ago
Reply to  Beth

Funny, I don’t see it as an either/or situation. You can use automatic deductions in tandem with other savings and investment strategies.

Sure, if some people who pay themselves first will be tempted to spend the rest — just like some people who don’t pay themselves first will be tempted to spend everything they earn.

Ross Williams
Ross Williams
5 years ago
Reply to  Beth

I wasn’t opposing automatic deductions. I was suggesting that you ought to put ALL the money you don’t intend to spend immediately into savings. How you do that depends in part on how you track your spending. If you are using “automatic deduction” that means your whole paycheck goes into savings and you take out just the money you have budgeted for living expenses. If you want to call that “pay yourself first”, fine. But for a lot of people “pay yourself first” means you decide on how much you will save and then spend the rest. That is very… Read more »

Ross Williams
Ross Williams
5 years ago

“… paying attention to the really bad returns I was getting … I then switched that money over to an index fund.” Which really proves the point. You sold low because the fund was down. That is exactly the wrong thing to do. But its what paying attention will get you because you will think you are being smart. I applaud your moving to an index fund. But the lesson is not that you should pay attention to your investments, its to invest in a low cost index fund to begin with. Then you don’t have to pay attention again… Read more »

getagrip
getagrip
5 years ago
Reply to  Ross Williams

Just a point on “selling low”. Sometimes a dog of a fund is a dog of a fund and will remain a dog of a fund until someone puts a bullet through it. If your mutual fund is tracking like crud for a few years while the benchmarks are way above it, time to cut your losses and move on.

Ross Williams
Ross Williams
5 years ago
Reply to  Ross Williams

@getagrip

Most mutual funds are “dogs” compared to an index fund. And if they haven’t been a “dog” in the past, they still likely will be a”dog” in the future. If you have to pay close attention to the performance of your long term investments, you have the wrong investments.

Julie
Julie
5 years ago
Reply to  Ross Williams

I didn’t get past #1. It doesn’t sound like you understand the power of compounding interest.

Ross Williams
Ross Williams
5 years ago
Reply to  Julie

Perhaps, instead, I don’t overestimate the importance of having money when I am dead or dying. Of course, you can got an early start on your children’s retirement savings. And with the power of compounding, they ought to leave your grandchildren’s retirement savings even further ahead. But retirement isn’t really the purpose of life. I feel sorry for people who buy into the idea that they should sacrifice a vibrant youth and fully lived life to save for a decrepit old age. And yes, you can both live well now and in old age, but mostly that means spending your… Read more »

Christy
Christy
5 years ago
Reply to  Ross Williams

I disagree about the retirement. I am in my 50’s and didn’t start saving for retirement until my 40’s. BIG MISTAKE. I wish I had been saving in my 20’s. Think compound growth. What you don’t save early you will never make up. Right now I should be saving more than I am making to make sure I have enough to retire on.
Save as soon and as much as you can for retirement. You might be able to retire early.

Ross Williams
Ross Williams
5 years ago
Reply to  Christy

Old folks are always regretting the follies of their youth. But the problem is how you spent your money, not that you didn’t save it. Its not the money well spent that people thing they should have saved, its the money they wasted. The lesson for young people should be to make sure they spend every dollar as wisely as possible on things of lasting value. Stock may have lasting value, but it provides no real benefit until it is sold.

getagrip
getagrip
5 years ago
Reply to  Ross Williams

A point on Social Security Disability. Don’t count on it, at least not for a while. I have a friend who has brain cancer and was not able to work after the first surgery. Despite statements from multiple physicians he had to get a lawyer and shell out over $6K up front to apply for and finally, seven months and a second surgery later, get his disability. It sure felt like they were stalling in hopes he would die before he could collect. Either way he lost out on a portion of his disability if only because of the time… Read more »

Ross Williams
Ross Williams
5 years ago
Reply to  getagrip

“It sure felt like they were stalling in hopes he would die before he could collect.”

This sounds like what happens sometimes with private disability insurance, but why would the bureaucrats at Social Security do that? There is no reason for the “political machine” to do it either. They have no skin in the game.

getagrip
getagrip
5 years ago
Reply to  Ross Williams

Most states manage and supplement the Social Security Disability programs. Much like medicare or unemployment the feds give them money and they administer the programs. So you become a cost to the Government, both Federal and State and potentially County, and they want to reduce costs and not raise taxes. So they have plenty of skin in the game. Also the current political climate, if you haven’t noticed, is pushing for a reduction in “entitlements” which include medicare, social security, welfare, etc. This carries down to the local level where tweaks to legistation are created, new paperwork is required, new… Read more »

Ross Williams
Ross Williams
5 years ago
Reply to  Ross Williams

You are confusing different programs. Social Security Disability Insurance is administered entirely by the Social Security Administration and benefits are based on your work history, just like Social Security.

Chris Stanley
Chris Stanley
5 years ago

This goes along with marriage… Don’t do business or sleep with someone who has less to lose than you.

Sometime within our 30’s we have either gained a lot, lost a lot, or both. Choosing the wrong person to “come in agreement with” could be costly. Ensure they have at least just as much to lose as you do.

Forget the prenuptial agreement… Just run!

Carla
Carla
5 years ago
Reply to  Chris Stanley

Wow!

Fervent Finance
Fervent Finance
5 years ago

Great list! What’s sad is that most of those should be common sense, yet for one reason or another they aren’t. Whether it is fear of the unknown, procrastination, etc. I think a very important one that will have a lot more impact on you in more ways than just money is #2. I think those talks should happen when dating, not when engaged or about to be married. I have a girlfriend and we already are very open about our short and long term goals, and I think it makes the relationship that much stronger.

Mrs. Frugalwoods
Mrs. Frugalwoods
5 years ago

I think if you can avoid lifestyle inflation, you’ll set yourself up for not only financial success but also, the joy of being content with what you have. For me, coming to the realization that I don’t need to structure my life in a way that society expects was very liberating. Now, I only spend money on things that are meaningful to me–not on things that I think I need in order to “keep up.” I’ve realized there’s no one to keep up with; I just need to live my life according to my own principles.

CV
CV
5 years ago

This is great advice. I’m a bit more than half-way through my 30’s and am working hard to live life according to my own principals and priorities. There’s seem to be endless things that society thinks I should have done or should have bought by now, and I wrestle a lot with others’ expectations of what life for a mid-30’s woman should look like, and how my own priorities completely differ from those expectations. I’ve just recently achieved debt freedom after 14 tough years paying off a mountain of student loans taken on in youthful ignorance and naivety. This is… Read more »

Jen From Boston
Jen From Boston
5 years ago

I sooooo wish I had done this in my twenties and early thirties. And I didn’t even go overboard on spending!! I just let my expenses slowly creep up. Of course, some of that creep was simple inflation, but still… I have learned that I really don’t need most of what I ever bought – it just creates clutter. As a result, I’m more mindful about buying physical things.

getagrip
getagrip
5 years ago

To me this is the single biggest issue. We are social animals and look to fit into the groups we are with or gain social status among those who are important to us and it is a hard fight not to be that way since it is hardwired into us. It’s why siblings brag about who owns the bigger house or has the better car. It’s why people try to outdo each others kid’s birthday parties when all the kids really want is an excuse to run around, scream a lot, and eat cake. It’s why brand names can charge… Read more »

Beth
Beth
5 years ago
Reply to  getagrip

We lost two family members last year and at their funerals, no one was talking about how big a home they had, how many trips abroad they took, or what goods they spent their money on.

Aside from making sure our loved ones are looked after financially, I think our real legacy is the lives we touch and the stories we leave behind.

Carla
Carla
5 years ago

Though my life doesn’t fall in the typical expectations that many would expect in their 30s, numbers 6, 7, 9, 10 and 14 in the list does apply to me. Distractions and money drains such as chronic illnesses and living on disability will slice though any plans you may have. For me its a matter of creating a livable work around to get though these financial sinkholes. Maybe one of these days I will write a book on the subject once I master it.

Reece
Reece
5 years ago

Very interesting post. I’m in my 20s, and think that I’m getting there with my financial goals- for now. The problem is, this can lead to thinking that I’m all set! Yeah, not so much.
It’s been really helpful to read through this list to get an idea of what is likely to affect my finances in the future.
Thanks for sharing!

Toni
Toni
5 years ago

I got divorced in my 30s, which pull a whole different spin on finances in your 30s!

Geeky Hippo
Geeky Hippo
5 years ago

great article!

The Professor
The Professor
5 years ago

“Keeping up with the Joneses” – Great point. In American culture, we always want the nicer car, the nicer home, the fancier clothes. It’s great if you have the money, but many people who make luxurious purchases can’t afford them!

Thanks for the article!

Jen From Boston
Jen From Boston
5 years ago

4. Buying more house or car than you need. I agree with this, but I did have a slightly different approach to buying a home. I bought a little more home than I needed, but I bought a home I’d be happy with ten or twenty years after I bought. I hate moving, and there are costs associated with selling your home, especially if you end selling for less than what you paid. If I was married and planning on having children I’d take the same approach if buying my first home. I’d want to buy a home I could… Read more »

SLCCOM
SLCCOM
5 years ago

You also need to be confident that you won’t have to relocate for some compelling reason. Industry collapse, need to care for aging parents, etc. can make it tough to stay.

lmoot
lmoot
5 years ago

– Focus on maintaining or improving youthful vitality (aka exercise and eat right), to reduce chances of being on expensive meds or expensive therapies in your 40’s – I second going back to school for only the right reasons…and if possible, without student loans – ramp up the retirement savings (I’m so caught up in my current life goals that I’m still having difficulty forcing myself to give up more than is necessary for the match) – Make your 30’s the time to pay off loans, not accrue more. Hopefully by now you’ve stabilized your finances (or are trying to)… Read more »

Mysticaltyger
Mysticaltyger
5 years ago
Reply to  lmoot

“Focus on maintaining or improving youthful vitality (aka exercise and eat right), to reduce chances of being on expensive meds or expensive therapies in your 40′s.”

This statement is soooo spot on. I wish it could be repeated at least 1,000,000 times. It should be mentioned in every article on personal finance as well as every piece on medical insurance and costs. 2/3 of us are overweight or obese. We literally, cannot afford this way of life any more.

SLCCOM
SLCCOM
5 years ago
Reply to  Mysticaltyger

Which doesn’t mean that you won’t still get sick. Bad things happen, and we all die. You can do your best to stay healthy, but you better have that health and disability insurance in place.

Quinn
Quinn
5 years ago

Good reminders. I definitely find complacency can be an issue. Have to continue to challenge yourself, make new priorities, or remind yourself why you have your current priorities. Old financial habits tend to creep up over time, put them back in their place!

Jeff
Jeff
5 years ago

Three of these of course don’t apply if you don’t have or never intend to have children.

Anyhow I’ve never understood the “need” to get a SUV or a minivan just because you have a kid. My parents raised my sister and I just fine owning nothing but sedans. If you have at least three kids then it starts to make sense but for one or two it’s overkill. Most of the time I just see one or two people in those vehicles and no cargo at all.

Alison
Alison
4 years ago
Reply to  Jeff

I drive a Prius everywhere with my 2 kids. It’s always just barely big enough – which works for me! V.

Dan
Dan
5 years ago

I am a CFP and Ross Williams has NO idea what he is talking about. Please do not take his advice…on anything.

Ross Williams
Ross Williams
5 years ago
Reply to  Dan

CFP’s are in the business of pitching their services. Of course they don’t think you should pay attention to advice that suggests you are wasting your money by buying those services. The finance has become our largest industry. Its done that in part by taking one to two percent of people’s retirement savings every year in fees. Is it any wonder that you hear over and over again how you should be saving your money for retirement. It really isn’t a surprise that they want you to convince you to organize your life around putting money into their industry. Nor… Read more »

pearl
pearl
5 years ago

Stop feeding the troll. I didn’t think I’d see those on GRS but here we are.

Ross Williams
Ross Williams
5 years ago
Reply to  pearl

I have been posting here for a very long time, almost from the beginning of the iste. And I have watched as this site has been taken over by people trolling for their business interests, from gold to financial planning. The suggestion that young people should focus their financial planning on more immediate goals than retirement is hardly “trolling”, unless I suppose you have a financial interest in the retirement industry.

SLCCOM
SLCCOM
5 years ago
Reply to  Ross Williams

I I have no interest in the financial planning industry. I do have the personal experience of not realizing how fast the years speed by and having to play catch-up. I also know that nasty things happen, and without GOOD disability policies, you not only will be miserable, but probably die prematurely because you cannot afford medical care.

I agree–Ross is a troll on this thread.

Ross Williams
Ross Williams
5 years ago
Reply to  SLCCOM

Lets be clear. Some people may need disability insurance badsed on their circumstances, but in general not having it is not a “mistake”. The reality is that the chances of you losing significant income from disability in your 30’s are not all that great, although they may be greater than your chances of dying. But exaggerating that possibility to create fear has been, and continues to be, the major selling point for what is very expensive insurance. As far as I know, disability insurance isn’t sold by the financial planning industry. So whether you are a financial planner isn’t really… Read more »

SLCCOM
SLCCOM
5 years ago
Reply to  SLCCOM

I sincerely hope that nobody else reading this is a cock-eyed optimist like Ross. Unless you have a written guarantee that you will never ever seriously injured or get seriously ill, you need health and disability insurance. Years slip by quickly. You can’t unring a bell; you can’t go back in time and get the insurance you need when you need it.

Retirement comes up on you fast. If you don’t have enough money set aside, you are going to be in a world of hurt.

Money saved gives you options. Being broke takes them away.

Ross Williams
Ross Williams
5 years ago
Reply to  SLCCOM

Welcome to the fearmonger shop. You are much better off managing your money to achieve your life’s hopes. That means spending it well on things that have lasting value to you.

Dan
Dan
5 years ago

Ross – has anyone plugged their business? Maybe I missed something but I don’t think anyone has.

Ross Williams
Ross Williams
5 years ago
Reply to  Dan

As far as I can tell, none of the folks who have resorted to name calling have any identity at all beyond their screen name. So its hard to tell what industry they are in isn’t it?

John Ftacek
John Ftacek
5 years ago

The best thing that I did in my thirties was pay off all credit cards, close all the accounts, and open only one for emegency use. Also, made sure it was paid in full when due. In other words, “if you can’t pay cash, you don’t need it”. Thank you Grandpa!

Nick @ Millionaires Giving Money
Nick @ Millionaires Giving Money
5 years ago

I’m concentrating on paying off all my credit card debt and then concentrating all my energies on paying off my mortgage. I am slowly building my retirement fund and having no debt outstanding would mean I am able to retire earlier by downsizing. Great post, thanks for sharing.

santanu
santanu
5 years ago

I think biggest mistake people are doing is buying something more than their requirement & reach. This is simply social and peer pressure which is forcing people to spend more without realizing that they are actually wasting their money.

Sameer
Sameer
4 years ago

Creating an alternate income has become a must in current times of Job uncertainty. Investments in the right place can provide one a cushion to take care of retirement and after keeping some capital for starting a new business.

Blake
Blake
3 years ago

I don’t think those moving costs are going to come any where near the costs of paying higher taxes, utilities, furnishings…etc for a house that is sized for what you will want 10-20 years from when you purchased it.

LT
LT
3 years ago

I would add, “consider the true costs of having children and the alternative of not having them and how it will contribute to your lifelong financial goals.”

Centsai
Centsai
3 years ago

This was a great post! All of the potential money mistakes you listed are spot on!

ArchiVisionDirectory
ArchiVisionDirectory
3 years ago

If you are save money for your retirement than you certainly need to read the book ‘7 Simple Steps to Financial Freedom by Tony Robbins’. Tony Coaches you trough a better saving money plan and investing plan. I’m reading it right now and you should read it to if you want to save more than you do now. He speaks of financial freedom for you and me. Financial freedom is just one fingertip away for you if you read this book. An interview of the book and the author can be found on http://archivisiondirectory.blogspot.be/2016/08/7-simple-steps-to-financial-freedom-by.html

Anders
Anders
3 years ago

Thank you for a good post! It seems hard for some people to plan for their retirement in their 30s, I agree. Until recently I didn’t think I had to do it either. But when I started learning more about personal finance myself, I understood that I really needed to take care of it. I understand why people aren’t so keen on getting started though, it can be a lot to take in. But I found that the important thing was to get started. About buying too much for the kids, this is something I see a lot too. It… Read more »

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