Handling the finances appropriately is essential for all age groups. However, the financial decisions one make during their 30s make the most impact. So, it is important that one makes the right financial decisions and plans to attain their goals and live the life they want.

What makes the 30s more impactful is that one is young and have pretty much settled in their jobs. This gives them ample time to channelize their steady flow of income in the right direction and earn high returns. Moreover, during the 30s, one has gained a fair amount of experience, which makes them capable enough to define their financial goal and create a blueprint of their desires and wants.

However, the 30s is also a vulnerable time as one may not realize the importance of financial planning and may deplete their resources and time. Additionally, it has been seen that people in their 30s make some mistakes which should have been made. Here we present the top 7 money mistakes that people in their 30s make.

Not understanding the difference between saving and investment

It is extremely important to understand the difference between savings and investments. This is because, it is a very common mistake that people make, irrespective of their age. Savings are portions of income that are saved. Now, some people prefer to save after all their  expenditures are met. But, it is wiser to make it a habit of chunking the income to include savings as a head along with the expenditure categories. It is a habit building exercise, which will surely bear fruits in the future. Now, investments are made out of those savings with the motive of earning returns. These monetary decisions are mostly time bound and based on one's risk appetite, they can invest in high risk-high return, medium risk-medium return, or low risk-low returns investment instruments. It is also important that one makes understands all the clauses before going ahead with the investment to make an informed decision.

Doing self-financial planning

Often people think that they are well-versed with dealing with finances and they make investment decisions on their own, which may not be correct. It should be considered that financial planning is a complex process that requires expertise. Investment is not as simple as putting money in the savings account. A lot of factors like risk-appetite, future value of money, individual needs and many other aspects need assessed. So, rather than making incorrect financial decisions, it is best to take the help of an expert who will help to recognize the financial goals, gauze the risk appetite and then make financial decisions.

Not setting appropriate financial goals

By the 30s, one is mature enough to recognize what they want in life. So, it is easy to make future decisions and set appropriate financial goals. Be it higher education, marriage, world tour or retirement planning, it is essential to set financial goals as early as possible to make attainment of these goals easier and smoother.

Not planning for retirement

The 30s is the right time to plan for retirement as it will give ample time to accumulate funds. The longer duration will help the funds to grow appropriately and will ensure that by retirement an ample amount is accumulated to take care of expenses post retirement.

Not considering inflation

Along with the other factors of investment, inflation is another important factor which needs to be considered while setting financial goals. The value of money is never stagnant so it is important to factor inflation while making investment decisions. The investments made today will have a future value but inflationary pressures needs to be considered. So, it is best to consider inflation and factor it while calculating the financial goal and the amount required to meet that goal.  

Taking loans and debts

The usage of credit cards is on the rise, and it is mostly people in their 30s who opt to use their credit cards to make purchases. If used correctly and payments made on time, a credit card can be optimally used. However, any default can lead to huge losses as credit card interest adds up to a good amount. Additionally, 30s is also the time when one opts to take loans to make big purchases like a car or a house. But, rather than opting for loans, one should plan and set a financial goal to accumulate an optimal amount to make that big purchase and opt for a loan only for the difference amount. The 30s is the times when one should spend on things that they need and not spend mindlessly.

Ignoring health and life insurance

During the 30s, one thing that takes a backseat is insurance. Due to young age health issues are something which does not require serious attention so it is mostly ignore. However, health insurance and life insurance are important financial covers, which should be planned and implemented early. Life insurance helps to secure the family's future in case of accidents and unforeseen circumstances. On the other hand, health insurance provides cover for life-threatening diseases. Additionally, opting for these insurance policies early will ensure lower premium amounts and much better coverage. And, opting for these policies later in life will not just increase the premium amount but there might be lesser coverage too.

So, it is essential to recognize the advantages of planning early during the 30s to make the most of everything!