AT 30s MISTAKE YOU SHOULDN'T MAKE ABOUT MONEY

7 money mistakes you shouldn't make in your 30s

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There’s a reason 20-somethings dread their 30s — it’s the decade when everything seems to finally get real.  Careers are established (or at least that's the plan), homes are purchased, bills stack up, and wedding invitations flood mailboxes. Friends you once saw dancing on bar tops abruptly decide to “settle down” and all of the sudden, you realize there are fewer excuses for not having your own financial house in order.

Many of the choices you make in your 30s will determine what kind of life you'll be living when you hit your 60s. To help you along, here are a few common money mistakes you should try to avoid: 

1. Getting married before you talk about the "F" word — finances.
Forget about the fact that an American wedding costs an average $30,000 today. The most expensive mistake you could make before walking down the aisle is not being open and honest with your partner about your financial affairs beforehand. Money is one of the most common causes of friction in marriages -- for good reason. By not making full disclosure about your debts or that impulsive shopping habit you picked up after college, you’re asking for trouble.

If you’re nervous about bringing up the “F” word with your partner, seek help from an objective mediator — someone like a relationship counselor, financial planner, or even a representative from your church who can referee. Prenuptial agreements aren’t just for the wealthy, either. Many attorneys recommend couples consider a prenup, especially if they are carrying assets that might be put at risk in the event of a divorce (for example, property in their name, ownership in a business, an inheritance, or children from a previous marriage). 

2. Letting your student debt take care of itself.

A record 40 million Americans have student loan debt today, with the average college graduate carrying more than $29,000. It can be shocking how quickly that six-month “grace period” ends after graduation and those bills start coming due. There’s no running away from it either. It’s nearly impossible to discharge student loan debt in bankruptcy. Even after you’ve retired, the government can still garnish your Social Security income to pay off past due student loans. But you have options to lighten your burden if need be — federal loan borrowers can apply for income-based repayment or loan forbearance. Private loan borrowers can have their debts consolidated or petition their lenders for lower interest rates. The longer you let unpaid loans linger, the worse it will be for your credit, not to mention your job prospects. Employers have been known to run background checks on job candidates and turn down applicants who appear to be fiscally challenged. 

3. Not saving for retirement.

Your 20s are over. If you haven’t started thinking about retirement yet, then you’re already behind. Saving enough money to sustain you through retirement seems daunting, but it’s not rocket science. If you have a job, put 10% (or more, if you can) into to a 401(k). Don’t ignore your company match. If your job doesn’t offer a retirement plan, then open a low-cost IRA through an investment firm like Vanguard or Charles Schwab (minimum deposits are as low as $1,000 and it takes all of 10 minutes to open one) and set up automatic contributions of at least 10% of each paycheck. Trust us, you won’t even notice that missing cash after a while. And don’t forget to ratchet up your contributions when you get a raise.

4. Using graduate school as an excuse to avoid the job markets. 

Yes, the economy is still struggling to bounce back from the recession and the job market for young adults isn’t all that great. But taking out another chunk of student loans so you can hide out in grad school while you wait for the dust to settle and jobs to grow on trees is probably not the best way to handle it. Unless that Master’s will help you get a job faster or qualify for a higher salary, it’s hard to justify the cost. A recent report found that simply staying in college an extra year or two can cost students tens of thousands of dollars of future earning potential. Consider your area of study and consult with people in your desired field before you decide that adding another degree to your resume will be worthwhile.

5. Buying a house you can’t afford. 

Ignore those people bemoaning the rise of renters in the U.S. and wagging their fingers at young adults too wary (or too broke) to get in the housing market. Buying a home is probably the biggest financial transaction you’ll ever make — don't let anyone pressure you into moving too quickly. Real estate experts recommend buying a home only if you’re willing to commit to living in it for seven to 10 years. If your credit is poor, you might benefit by waiting until it’s improved before applying for a mortgage. A lower mortgage rate can save you thousands of dollars in interest payments over the life of the loan. Take this questionnaire on Bankrate to help figure out whether you’re ready to buy or should keep renting. And if you’re not sure how much you can afford to spend on a home, check out this tool from Zillow. 

6. Neglecting your children’s education.

Congrats on the new baby! Time to open a 529 plan. College costs have risen more than 1,000% in the last three decades alone. You can start by opening a 529 college savings plan on your child’s behalf or simply opening a Roth IRA (there are pros and cons to both options) in your child’s name. The point is to put your savings in a place where that money will grow — and you can be sure your teen doesn’t blow it all at the mall.

7. Ignoring your will.

It’s hard to imagine your death bed when you barely have wrinkles, but your estate plan should be on the top of your to-do list in your 30s. And you don’t need to be Bill Gates-rich to plan for what happens when you pass. If you die without a will, the state decides who gets what regardless of your wishes or your family’s needs. In addition to a basic last will and testament, be sure you have a durable power of attorney (someone you trust to make legal decisions on your behalf if you become incapacitated), a health care power of attorney (someone you trust to handle you’re medical decisions if you’re unable to), and even a document specifying how you want your digital assets (social media profiles, digital photos, all that stuff floating in “the cloud”) to be handled. If you’re married, have children, a home, or other sizable assets in your name, it’s even more important to be sure your estate plan is kept up to date. 

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