Money Mistakes People Make in Their 20s and 30s

Look back at who you were in your 20s and 30s. If you could have a conversation with yourself, what money mistakes would you say to avoid?

Here are a couple big money mistakes I think people in their 20s and 30s often make.

People in their 20s

Two big mistakes people in their 20s make is spending more than they earn, and not saving for retirement.

When you’re young, retirement seems like it’s a lifetime away, but that mindset can hurt you financially. If you wait until you’re near retirement to start saving, you’ll have to save a lot more, a lot faster, so it’s best to start saving sooner rather than later.

A great lesson for anyone in their 20s to learn is the importance of compounding money. The earlier you start saving, the more money you will have later, and the more comfortable your retirement will be.

People in their 30s

Many people in their 30s settle down and get married, but one of the biggest mistakes they make is not buying the insurance they need to fully protect themselves and their loved ones. When you’re shopping for insurance, it’s important to consider which policy is right for you and your new family.

Also, many people in their 30s are still paying off their student loans or credit card debt from bad purchasing decisions they made in their 20s. It’s important for people in their 20s and 30s to pay down those debts as soon as possible, because it’s hard to grow your own wealth when you’re paying interest to someone else.

I asked my listeners to call in and share some of their biggest money mistakes and they gave some great tips. To hear their answers, click the audio link below and listen to the full Ilyce Glink Show on WSB Radio, or go to iTunes and download the show to your handheld device.

WSB Radio’s Ilyce Glink Show – June 1, 2014

Download the podcast via iTunes

Thanks for listening.

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About Ilyce Glink

Author of 13 books, including the bestselling 100 Questions Every First-Time Home Buyer Should Ask. Writer of the nationally syndicated column, “Real Estate Matters.” Top-rated radio host in Atlanta. Writer for CBS Managing editor of the Equifax Personal Finance Blog.
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© Ilyce R. Glink. All rights reserved. This content may not be used, distributed, syndicated, compiled or excerpted in any medium or form without written authorization from Think Glink, Inc. For information on syndicating please contact us.

2 Responses to Money Mistakes People Make in Their 20s and 30s

  1. Joe Wilson says:

    When I was 25 I got my very first teaching contract (for the princely sum of $7100/yr!). It paid by default monthly, 9 times a year (during the school year) … or you could choose to space it out in 12 monthly checks. I of course chose the default to 9 months of pay, reasoning that I could do “something” when June came around and, meanwhile, I’d have more each month to enjoy. And I did!

    Of course when June came I had not a penny to my name. I managed to teach a course and managed a part time job at a gas station … and had the personnel folk put me on a 12 month pay schedule for the next year. Looking back, I find it hard to believe I was ever that $$ stupid.

  2. Ilyce Glink says:

    Just got this comment from a reader:

    I agree 100% — definitely not saving for retirement. I’m 28 and just opened up my Roth IRA last month. Although that may be earlier than a lot of people, I wish I had started retirement saving when I got my first job at 15 years old. Who knows where I’d be now. Oh well, better late than never, I suppose.

    One other thing that wasn’t mentioned…not establishing credit early (in the 20s section of your article). You’d be surprised at how many people I know in their 20s (usually under 25 years old), who have always just had their parent’s credit card in their wallet, but never started one of their own. I don’t know how common that is in general, but I can think of a few people that I know personally. Now they’re 22 or 23 or 24 years old or so, and with no credit history whatsoever. They need a new car. Or want to apply for an apartment, or in one case they would like to get a mortgage for a house. Mom and Dad aren’t there to help them the same way as when they were a minor. And, they’re starting their credit so late that the “history” portion of their credit score will take much longer to get in a good range.

    I’m very fortunate to have parents who taught me (pretty) well at a young age, and now at 28 years old I have an 810 FICO. I just bought a used car yesterday here in Georgia and got 2.6% on a 60 month term. Not too shabby! If I hadn’t started my credit until 5 years ago, like some people I know, it would be highly unlikely (perhaps impossible) to have that kind of a score and had gotten that kind of interest rate.

    Keep up the great work, I love your radio show and always look forward to your newsletter!

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