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Look, we all make mistakes, especially when it comes to money. Whether it's not saving enough, buying something you really couldn't afford, or going halfsies with your girlfriend on a bunny rabbit. Yeah, I did that. And it was a mistake for sure. Hope you're doing well, Nigel. But I've grown since then, like as a person internally, not so much physically.
I'm in my 30s now, and I make a lot less money mistakes than I used to. But I see a lot of people out there who are my age and still making some pretty poor financial decisions. So in today's video, we're going to take a look at some of the biggest money mistakes people make in their 30s so you can avoid these financial faux pas and have more wealth and less regret. Speaking of things you won't regret, go ahead and hit those like and subscribe buttons. And while you're at it, share this with your friends who have shared custody of a rabbit.
They need hope. And probably a reminder to refresh that bedding. - Whoa, God, what's that smell? - All right, the first big money mistake on our list is not having an emergency fund. If you're in your 30s, you should have this by now. But a lot of people don't. And it's not just 30-somethings. Ramsey Solutions did a research study that showed one third of Americans
have no savings at all. At all. That's a problem because life is full of surprises, as some of those surprises cost a lot of money. Like when your car breaks down, when your AC goes out at the house, or when you take your French bulldog to the vet and they send you a bill for $2,000 because it took 23 x-rays to determine your dog is just obese.
Also a true story. Now, I recommend having three to six months worth of living expenses tucked away somewhere you can easily access it like a high yield savings account. That emergency fund will be a solid safety net between you and whatever costly catastrophe life throws your way. All right, the next big money mistake people make in their 30s, not saving for retirement. According to research from Ramsey Solutions, nearly half of Americans aren't saving at all for retirement and those who do save aren't saving enough.
Now look, I know when you're in your 30s, retirement may seem like a lifetime away. But as the great Ferris Bueller once said, life moves pretty fast. Before you know it, your kids will be grown, you'll be eating dinner at Cracker Barrel at 4 p.m., and you'll have Band-Aids on the back of your hands. Why?
Who knows? It's just a thing that you do when you're old. Now, if you start in your 30s, you have plenty of time for compound interest to do its thing. Here's what I mean. Let's say you have $0 saved for retirement, but you start investing $600 a month at age 35 and continue until you retire at age 65.
Well, you'd likely end up with over a million dollars in your nest egg, even starting at 35. And it's pretty simple to do this. I recommend investing 15% of your income in tax-advantaged retirement accounts like your company's 401k or a Roth IRA. And if you want more deets on this stuff, check out my video called Investing for Beginners. I will link it below to make it easy on you. Now, quick caveat here, only start investing for retirement when you're financially ready.
When is that? Well, it's when you have a fully funded emergency fund, like we talked about earlier, and you're debt-free. You have paid off all your consumer debt. All right, that brings us to our next big money mistake people make in their 30s, not paying off debt.
According to the Federal Reserve Bank of New York, Americans' credit card debt is at a record high of over $1 trillion. But it's not just credit card debt I'm talking about here. Student loans, car loans, HELOCs, all these things are taking money from your paycheck every month. And that's money that you could be using to invest in
and build wealth and enjoy your life. Look, debt is not a tool to be leveraged, despite what you heard from social media and your broke friend Steve, who raises lizards. I'm gonna be honest, I just don't trust lizard people, whether they own lizards or they are lizards, untrustworthy.
What? What? You see, debt robs your future by demanding that you pay for the past. Debt is a thief. And until you believe that and you act like it, you're never going to build wealth. And I know saving up and paying cash for big purchases, it's going to take some time and it's going to take some discipline. But it is way more peaceful and way smarter in the long run. The next mistake people make in their 30s, I will get to as soon as I talk about today's sponsor.
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Thanks. Okay, the next big money mistake people make in their 30s, buying too much house. You might have an image in your mind of what your perfect home looks like. The front porch, the white picket fence, the neighbors who are friendly but not so friendly that you have to plant a 15-foot privacy hedge along the entire property line. And all that's fine, but don't buy that house before you can actually afford it. Or that dream home might become a financial nightmare, especially right now with home prices and interest rates being sky high.
Now, I recommend buying a house with a monthly payment that's no more than 25% of your after-tax monthly income on a 15-year fixed-rate conventional mortgage. And if that sounds like it's hard to do right now, you're not wrong. Okay, the median home price in America is over 400 grand now. But remember, that's the median.
the middle. There are still homes available that are priced lower than that. So if you're a first-time homeowner, you might need to adjust your expectations on size or location or save up a bigger down payment. Now we've got a free mortgage calculator that you can use to help you figure out how much house you can afford right now. I will link that below to help you take the next step. Next mistake people make in their 30s, not having the right insurance.
I know, it's not the most exciting thing to talk about, but insurance is super important. Not having insurance or even being underinsured can leave you financially up a creek if something goes wrong. But there's a lot of types out there. So what kind of insurance do you actually need? Well, it depends on your situation, but here are types of insurance coverage you have to consider when you're in your 30s. Auto insurance, health insurance, life insurance if someone relies on your income,
homeowners or renters insurance, long-term disability insurance, identity theft protection, and an umbrella policy if you have a net worth of over half a million dollars. Now, if you already have these in place, take some time to review your policies and make sure you have the right amount of coverage and that you're getting the best price. Next mistake on the list,
living beyond your means. This is buying stuff you can't afford, and this can really creep up when you're in your 30s. And one big reason is comparison, aka keeping up with the Joneses. Check out the new car. How many pesos does that set you back? You see your co-worker's new Porsche, and suddenly your perfectly good car seems like a POS.
Pretty old Scion. So what do you do? Well, you spend money you don't have to impress people you don't even like. But guess what? The Joneses are probably broke. And according to a recent study, 51% of Americans said they were having difficulty paying their bills in the past three months, and 42% said the same thing about affording food.
That's a lot of people. And odds are, some of them have the last name Jones. So if you can learn to live on less than you make and resist the urge to splurge, it will really help you reach your financial goals. And let me tell you, this principle, living on less than you make, this goes for any age, not just for those of you in your 30s. If you can harness the superpower early, you will build so much wealth with so much peace. All right, the last mistake on our list is...
I did right!
And listen, this doesn't have to be a big complicated thing. I'm just talking about having a plan for the next step you want to take. Maybe you want to save up for a down payment on a house. Maybe you want to travel the world when you retire. Maybe you want to go to law school so you can help people navigate those tricky rabbit custody battles. Whatever it is, having clear goals will help you stay focused and motivated. And make sure these goals are specific,
They're measurable. They have a deadline so that you can periodically check in with yourself and see how you're doing. It can't be loosey goosey. It can't just be, I want to get out of debt sometime. It's got to be, I'm getting out of $12,000 in debt in the next 18 months by doing these things. And hey, if you're still in your 30s, you can still set some pretty ambitious money goals and expect to reach them. So take some time to sit down and figure out exactly what you want to achieve financially in your 30s and beyond. Your future self will be glad you did.
So those are some of the money mistakes people make in their 30s. And I found it's easier to learn from other people's mistakes than from your own. So hopefully this video will help you avoid these money-related mess-ups. And if you wanna learn more about the traps in this toxic financial system and how to avoid them, I unpack all of it in my new book called "Breaking Free From Broke." And you can get your copy with the link in the description below. As always, don't forget to like this video, subscribe to the channel, and share this video with all of your friends who have a hard time resisting the urge to splurge.
Thanks for watching. We'll see you next time.
