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The 7 Worst Financial Mistakes You Can Make In Your 30s
The 7 Worst Financial Mistakes You Can Make In Your 30s
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Money Management

The 7 Worst Financial Mistakes You Can Make In Your 30s

Farah Nurow
August 26, 2022

Your 30s will define the shape your finances take as you age. It's the decade to cement your foundation, take charge of your finances, and set yourself on a path to financial prosperity. Every step you make along the way has the potential to make or break your finances. This is why every move you make should be calculated and well thought out.

As you gain traction and build wealth, it is crucial that you stay alert and avoid mishaps that have the potential to set you back. This includes anything that can cause you loss of assets, prevent your career advancement and put your future in disarray.

This article will look at seven of the worst financial mistakes you can make in your 30s and explore some ways to avoid them. Read on.

Read Also: 11 Worst Money Management Mistakes to Avoid 

Take a Loan You Can't Afford

Debts have the potential to improve and ruin your finances. Knowing to differentiate between good and bad loans will help you avoid incurring debts that might slow you down. Good debts will help you increase your income or appreciate your wealth, while bad debts are a liability. Wherever debt you take, you should ensure you can afford to pay it back. 

Debts are risky, and most people try to avoid them as they possibly can. However, constantly assess your debt-to-income ratio when you decide to take one. This will help you establish how much of your income you can commit to debt repayment without straining your finances. 

Total all the costs you'll handle when taking a loan. Don't just focus on the principle and interests only. Some lenders will charge you service, application, and processing fees. Total all this and work out how you'll pay them. You can negotiate with your creditor and find a balance that will ensure you minimise the risk of default. 

You should also consider other factors that can prevent you from meeting your obligations. The main one is a loss of income. You can protect yourself when that happens by getting adequately insured and having a liquidation strategy. 

Read Also: Loan Decisions: Mistakes that Can Affect Your Wealth

Put All Your Eggs in One Basket 

Diversifying your investments is one of the best ways to reduce risks when investing and allocating your assets. The goal is to prevent total loss when one investment goes up in smoke or underperforms. You achieve this by spreading your assets in different investment vehicles. 

Diversification ensures less volatility and fluctuations in your overall net worth. When one investment instrument brings you a loss, it can be cancelled out by the profits you generate from another. 

You should consider diversifying your portfolio depending on your risk tolerance and financial goals. Aggressive investors tend to spread their investments in high-risk and long-term vehicles, while conservative ones spread theirs in low-risk investments. 

Read Also: 7 Ideas to Diversify Your Sources of Income

Co-sign on a Loan

When you co-sign on a loan, you become a guarantor, making yourself responsible for another person's debt. This means the creditor can hold you accountable when they default or delay making repayments. They might demand you make payment on their behalf. Guaranteeing a loan can affect your creditworthiness and cause you loss if the borrower defaults. 

Before you guarantee a loan and become a cosigner, you should know the borrower's financial position and health. You can independently look to see why they need you as a guarantor and if they can really afford to pay back their loans. Instead of giving them the benefit of the doubt, you can put it in writing and agree on how you'll handle the situation when push comes to shove. 

You should also question how they wish to spend the loan and conduct your feasibility study instead of offering to co-sign blindly. If the loan does not help them better themselves financially, you might want to think twice before you co-sign.

Read Also: Guarantor and Guarantees: Know When to Say No

Fail to Invest in Yourself 

Investing in yourself is the only way to grow professionally, become irreplaceable to your employer, and command more salary. The greatest ROI you can realise will come from doing this. You'll become more competitive, and even when you lose your job, you can easily find a replacement.

In your 30s, you are approaching your prime earning years and want to be well prepared for it. And that will involve being competitive and increasing your employability status. Some ways you can invest in yourself to ensure you take full advantage when opportunities present themselves include:

  1. Going back to university and getting a postgraduate or master's degree
  2. Getting independently certified as an expert in your field
  3. Building your brand by establishing yourself as an expert online and within your networks
  4. Developing a network of like-minded individuals 
  5. Getting a mentor in your field, you can look up to

Investing in yourself can be expensive and time-consuming. But it's the only way to guarantee your career advancements, gain knowledge to increase your income, and achieve your financial goals.

Read Also: 8 Questions You Must Ask About Your Finances Today

Don't Prioritise Retirement 

With so many things going on in your 30s, you should avoid the mistake of ignoring retirement planning. You should strive to commit a portion of your income to saving and investing for your golden years. Making retirement part of your future financial planning will ensure you can generate passive when you leave the workforce and you are self-dependent. 

Prioritising retirement planning will also require that you keep your hands off your pension funds. You might be tempted to dig into your retirement account when facing a financial fix. While it might seem like a good idea, it can come to haunt you later.

To ensure your retirement nest egg is safe, you should separate them from your entire finances. Have dedicated savings and investments strictly for that. You can also look into pension schemes that make it hard for you to liquidate your retirement savings until you are a certain age.

Read Also: 7 Reasons Why Retirement Planning is Important 

Over Depend on one Source of Income

In this age of uncertainties, you should question whether relying on one source of income is suitable for your financial future. As you get more comfortable in your career in the 30s, you should also start exploring ways to generate passive income to supplement your salary. 

Multiple sources of income will help you achieve your goals faster, give you a sense of financial security by lowering the effects a job loss can present, and generally increase your wealth. 

You don't necessarily have to take a second job or start a business to diversify your source of income. You can choose to invest in dividend-paying instruments, buy assets that ensure capital appreciation, sell your skills online as a freelancer, or try out other online gigs that require little to no start-up costs like affiliate marketing.

Read Also: 7 Ideas to Diversify Your Sources of Income

Overspend on Liabilities

Overspending on Liabilities involves using your assets and incomes on things that lower your wealth. This can come in different forms and include 

  1. Using your savings to pay off debt 
  2. Using assets to secure loans
  3. Buying depreciating assets 
  4. Not taking advantage of tax breaks
  5. Delaying debt repayment and end up paying more
  6. Taking high-interest loans to buy consumer goods
  7. Blowing up your budgets 

In your 30s, you should strive to create a system that ensures your account for all your incomes and they go towards building your wealth. 

You can avoid spending much of your money on liabilities by setting and concentrating on your financial goals, keeping track of all your spending, getting insurance, and prioritising paying off all your debts.


While you still have time to recover from financial blunders in your 30s, you should not use that as an excuse to take more risks than you can handle. Some mistakes might seem small, but their repercussions won't be felt until it's too late. 

Take delaying retirement planning as an example. While you can catch up in your 40s or 50s, you'd have missed out on the benefits of compound interest. You'll also have to save and invest more aggressively to catch up.

As you take extra steps to solidify your finances, you should avoid the abovementioned mistakes and create strategies to save yourself when they occur. Acquiring more financial knowledge, taking advice from experts, and controlling your risk appetite can be a good start.

Read Also: 11 Money Mistakes to Stop Making by End of the Year

Farah Nurow is an experienced Content Writer who enjoys writing creative and educative articles meant to provoke readers' thoughts. He loves sunny weather and thick books. You can connect with him on LinkedIn.

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