7 Money Mistakes To Avoid in Your 30s, According to George Kamel
Your 30s are a pivotal part of your life. It’s a time typically characterized by advancing in your career, becoming more independent, purchasing a home and more.
Money often plays a key role in such situations. Making financial mistakes can derail goals. Knowing how to avoid those missteps helps you grow your wealth and protect those around you.
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In a YouTube video, personal finance expert George Kamel shared seven money mistakes to avoid in your 30s to protect your wealth. Here are the seven pitfalls Kamel recommended avoiding.
1. Missing the Chance To Double Your Retirement Savings
It’s easy to think you need a lot of money to start investing for retirement. Time, not amount, is the most important factor in investing, per the The New York Times. Kamel pointed to the Rule of 72 to encourage investing, assuming a 10% annual rate of return and starting as soon as possible.
“That [Rule of 72] means that if you start investing in your 30s, your money has the chance to double at least five times before retirement age,” Kamel said. Obviously, the more you start with means it will grow larger, but the key is to start earlier rather than later.
2. Leaving Money on the Table in Your Career
Having a job you enjoy can be empowering. It may increase your motivation and happiness level. Kamel said finding fulfillment in your job can bring financial benefits. He recounted his experience: “I decided a long time ago that if I was going to work, I might as well work really hard.”
Finding a job you enjoy may take some introspection and work. It may not happen overnight, but diligence can pay off. “So, through my 20s, through my 30s, the harder I worked, the more opportunities I was given," Kamel added. Each situation is unique, but finding a job you enjoy fosters wealth creation.
3. Avoiding Life Insurance
Life insurance often seems unnecessary in your 30s. You may feel too young or believe it’s not needed. However, life insurance protects your income stream if you pass away unexpectedly.
There are multiple options for life insurance options, though Kamel recommended term life. How much should you purchase? “Ten to 12 times your current income — a 15-to-20 year policy should do the trick," Kamel explained. Buying younger also means you can get coverage more cheaply.
4. Not Starting Your Marriage With More Margin
Having an elaborate wedding can be fun, but it gets expensive. The average cost of a wedding is $34,200, per The Knot. Spending that much on a wedding can make managing your finances challenging as you start your new life together.
Kamel suggested that soon-to-be newlyweds look for ways to cut wedding costs and save the bulk of the expense for other things, such as a down payment on a home. “Would you rather have one huge party that most of the people in attendance have already forgot about or give yourselves a $30,000 head start in your marriage?,” Kamel said.
5. Repeating the Car Payment Cycle
The average monthly car payment for a new car is $777, per Edmunds. Repeating the cycle for each car, or using lifestyle inflation to drive you to purchase more expensive cars, hinders wealth creation.
“Car payments are the number one wealth killer in America,” Kamel explained. Rather than financing too much of a car, Kamel recommended buying in cash and investing spare cash to turn the car-payment predicament on its head.
6. Buying Too Much House
Spending too much on your house hinders wealth creation. Over 40 million households spend over 30% of their income on housing costs, as of 2024, per Harvard.
Kamel argued for a lower percentage. “I always recommend keeping your mortgage, including property taxes, insurance, HOA fees, to no more than 25% of your monthly income,” Kamel said. Spending less will require some compromises, but it pays in the long run.
7. Taking From Your Future
Life is meant to be enjoyed, but overspending now creates future problems. “I’m not saying don’t enjoy your life in your 30s. You should enjoy it. Enjoy it in a reasonable way while still preparing for the future,” Kamel added.
Taking the right steps in your 30s can go a long way toward getting you where you want to be later in life. Enjoy life, but don’t do it at the expense of problems in the future.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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