When you hit your thirties, you might finally feel like you’ve become a proper adult. But you already know this from your two day hangovers, new found love of wine and cheese and choosing to wake up at 6am - rather than crawling into bed at that time!

But let’s be honest, you waved goodbye to your carefree days of younger years, where you could spend all your money on beers and all you had to worry about was your monthly phone bill a long time ago.

These days, topics such as ‘index funds’ and ‘redraw facility’ may have started to enter your vocabulary and it’s time to get really serious about your finances. So without further ado, here are the 10 bad financial decisions to avoid in your thirties.

 

1. Paying high interest on credit card debt
2. Not having a savings account
3. Not having an investment portfolio
4. Spending too much on a wedding
5. Buying a brand new car
6. Not having a financial plan with your partner
7. Neglecting your plan for retirement
8. Expecting a standard of living that you can’t afford
9. Overspending on your children
10. Not caring about your finances

 

1. Paying High interest

 

So you had a wild time in your twenties and are now paying the price. But don’t let your credit card debt cripple your future finances too. A sure fire way to be trapped in a cycle of debt is to pay sky high interest rates on your credit card. One way to get around this? Organise a balance transfer to a 0% interest card that you can pay off over 12-18 months.

 

2. Not having a good savings account

 

It’s important to have different savings accounts depending on your needs; a long term savings account with a higher interest rate that you don’t touch; as well as a more short term savings account for those unexpected incidents in life where you need money fast. Too many people in their thirties are still without savings - in fact 25% of Australians are living pay cheque to pay cheque. Make sure you shop around to find the best savings rates for you.

 

3. Not having an investment portfolio

 

Although it’s important to have a savings account, it’s equally important to have knowledge of investments and the beginnings of an investment portfolio in your thirties. That’s because some interest rate is actually devaluing long term - meaning that as money decreases in value over time due to inflation , the amount you have saved becomes less significant. To overcome this, long-term investment strategies can yield a 10% return on average - beating inflation and helping keep your wealth. You don’t need to be a financial whiz, but you may wish to seek financial advice for the best plan for you.

 

4. Spending too much money on a wedding

 

Many of us in our thirties are guilty of getting wedding fever. Brides and Grooms alike want to throw an epic party to celebrate their relationship, but with the average wedding costing $30,000 is it really worth it? That amount of money can be used toward a down payment on a property and seems an absurd amount to spend if you don’t even have that in your super balance. DIY weddings are therefore becoming more popular as savvy thirty-somethings seek to have a big day without breaking the bank.

 

5. Buying a brand new car

 

This may be one of the dumbest things you can do at any age. Brand new cars lose their value as soon as you drive away from the show room and it’s an unnecessary expense when you can buy new-near for a fraction of the cost. We’re not saying you have to drive an old banger for life, but consider 6 month to 1 year old cars instead - your savings balance will be very grateful!

 

6. Not having a financial plan with your partner

 

So you have a long-term partner and are living together? Whether you plan to marry or not, in fact ESPECIALLY if you plan to marry, you need to have a financial plan together. We’re not talking about pooling all your money into a joint account, in fact we advocate for some level of financial independence; however you need to be on the same page for your financial future, how you’ll contribute to bills and future savings.

 

7. Neglecting your plan for retirement

 

Listen, we know that superannuation is probably far from your list of priorities. For most of us, you get paid by your employer and it’s a set and forget thing. For the self-employed, it’s important you’re paying yourself super - after all  who wants to work until they die?!

 

But when was the last time you checked your super balance, or how your investments are doing? Do you know how much you’re paying in fees each year? Are you surprised by that amount?

 

If you’re interested in being a property investor or want more control of your super - which many people do (it is YOUR money after all) then you may want to consider a self-managed super fund, which allows you a ton of flexibility and tax benefits for how your super is invested.

 

8. Expecting a standard of living that you can’t afford

 

Sorry to break it to you, but you’re not entitled to champagne spray and 5* luxury holidays if you haven’t got the bank balance to back it up. It’s dangerous to try keep up with the Kardashian’s if you’re not also earning a million bucks per sponsored instagram post. Living within your means also doesn’t mean going pay cheque to pay cheque - you should ideally be saving ⅓ of your income each month, not spend more than ⅓ of your income on rent and bills and allowing for ⅓ of your income to be for spending on clothes, food and extra stuff!

 

9. Overspending on your children

 

Having kids is an exciting and nerve wracking time in your life, and new parents are often overwhelmed with how much they need to buy for their new offspring. However, there is no need to splash out on everything brand new or buy designer prams and clothing for your little one that they will soon grow out of.

Remember second-hand doesn’t mean ‘second rate’ and it’s also better for the environment as well as your bank balance - win-win!

 

10. Not caring about your finances

 

Chances are if you’ve read all the way through this article then this point doesn’t apply to you, as you’re obviously interested in making some good positive financial decisions and growing your personal wealth.

 

It’s important to really take note and get involved with your finances when you hit your thirties. These are your golden years of earning money not only to support you today, but for your future. The property you buy, the retirement savings you make and all other financial decisions you take today will ultimately benefit or bite you in the future.

 

If you’re considering starting a Self-Managed Super Fund (SMSF) or want to find out more on what’s involved with a free consultation. Contact our team today for a callback.