6 Financial Mistakes You Must Avoid In Your 30s

Young enough to attend concerts. Old enough to start saving for retirement. 30s can a confusing time.

5 min read

30s is a confusing time in life. A lot of us  tend to think we’re young and thus have a lot of time to our respective financial goals. However, due to the state of current world economy and the volatile state of the jobs market, it’s all the more imperative that we stay away from the 6 most common mistakes people tend to make in their 30s.

The purpose of this article is to highlight the need for financial cushioning (in the form of savings, investment etc.) while also avoiding the very lucrative but financially irresponsible traps offered by the market.


So let’s look at the 6 most common mistakes we must avoid in our 30s:

1. Not Having An Emergency Fund:

If the pandemic has taught us anything, it’s that medical emergencies or sudden job loss don’t give warnings. In the event of a calamity, like the pandemic, an emergency fund functions like an extra lung that you can breathe through when your primary source of income is hampered. In the absence of an emergency fund, we’re forced to use expensive ways to fund our lives, which in turn may lead to an increase in debt.

2. Making Minimum Debt Payments on High-Interest Debt

This is one of the most common mistakes that lead young people into debt traps. High interest debts like Credit cards are just as lucrative as they are expensive. While a credit card may seem to increase your purchasing capacity, the interest rates on credit cards usually end up inviting more payment than initially borrowed. This situation arises when we only keep making minimum required payments on debts that have high interest rates. Over time, you’ll realize that despite making numerous minimum debt payments, your principal borrowed amount is still very high. That’s because a large chunk of your payments have been satisfying the high interest the debt was offered on.

Hence, it’s imperative that more than the minimum payment should be made on debts that come with high interest rates. The sooner these debts are paid off, the less you’ll pay over and above the principal amount.


3. Buying a House/Property Way Beyond Your Budget

Buying a house can be a tricky affair, considering the variables involved in the process. From differing interest rates to lender propositions to your own budget’s planning, buying a house is one of the longer commitments we make in our lifetimes.

Since we tend to attach emotional value to buying a house, we sometimes tend to select a house/property that’s way above our budget, even if minimally. If the cost of buying a house or its EMIs exceed your budget, even by a small margin, over time it will compound into a big debt that’ll force you to take more debt at a higher interest rate to pay off the previous extra debt.

Hence, thorough financial investigation and a good reliable lender will lead you to a deal that falls within your budget.


4. Not Saving For Retirement

The single greatest financial mistake you can commit in your 30s is not starting a retirement fund. You may think that you have plenty of time to start saving for your retirement, even if you plan to retire by 60. Plus, you have way more responsibilities in your 30s than you did in your 20s. Hence, a retirement fund may not be at the top of your priority list but delaying a retirement plan by even 5 years will have a significant impact on the quality of life in your post-retirement years.

According to a recent study by Indian Retirement Index Study (IRIS), more than 80% urban Indians fear running out of money in their retirement. This means most retired people will have to rely on their families and friends during their golden years. To remedy this situation, it’s imperative to start saving for a retirement fund in your 30s.


5. Saving For Kids Before Saving For Self

A lot of people in their 30s are also new parents, which means they are now laden with the responsibility of saving up for their child’s future as well. While it’s paramount to be forward looking and save for your child’s secure future, this shouldn’t come at the cost of not saving up for your own self. Most new parents end up making this mistake where they only save for their children and not for themselves. When difficult situation arises, they have no option left but to dip into their children’s savings.

Hence, it’s paramount to save for yourself and your future first and then set aside a sum for the child’s future.


6. Being Uninsured

A lot of us don’t like to buy insurance of any kind since buying insurance means paying for something that we hope to never use in life. While it may seem fair to some, the consequences of not buying an insurance can be so dire that they can leave you financially scarred. One medical emergency or one big hospital bill can render our years of planning useless. Hence, the importance of a reliable insurance plan cannot be overstated, specifically for someone in their 30s.


Choosing the right insurance policy for yourself and your family is just as important as insuring your family.

The HDFC Life Click 2 Protect Super life insurance policy analyses your current situation and provides benefits in future in accordance to your changing lifestyle. This non-linked, non-participating, individual savings term plan will protect you and your family regardless of the nature of financial crisis you may encounter.


Some of the key features of this policy are:

- Get back all premiums paid on survival till maturity with the Return of Premium option.

- Accelerate death benefit on diagnosis of specifi­ed terminal illnesses till 80-years-old.

- Choose increasing death benefit up to 200% under Life option

- Vary your death benefit according to your need under the Life Goal option.


Additionally, you can choose a suitable plan from the following three options:

Life Option: It covers the policyholder for death benefi­t during the policy term which can be accelerated in the case of diagnosis of a terminal illness.

Life Plus Option: Under this option, the policyholder is covered for death benefi­t which can be accelerated in the case of diagnosis of a terminal illness. But an additional amount will also be payable in case of accidental death during the policy term.

Life Goal Option: Under this option, the sum assured payable on death would vary with the policy year, in accordance with the ‘Level Cover Period’ and ‘Amortisation Rate’ as chosen by the policyholder.

It is time you looked at your account statement and started investing smartly to grow your money tree.

Visit here to learn more about HDFC Life Click 2 Protect Super insurance plan.

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Topics:  Insurance   Savings   debt