10 money mistakes not to make in your 30s

So, you’ve graduated from your carefree 20s into your responsible 30s. While you’ve matured over the last decade and gained some valuable experiences, you’ve still got chances to take and mistakes to make—some of them costlier than others.

You’re likely thinking about your relationships, your career, buying a home, or even starting a family. It’s an exciting time, but it’s also a critical time for money management. A new decade brings new challenges, so we’re here to spell out some financial oversights that can keep you down for the count. Here are ten money mistakes people make in their 30s and how to avoid them:

1. Not planning for retirement

Retirement seems like it’s 100 years away. You’ve started to climb the corporate ladder or have just taken the first step towards making your first million. The secret to saving for retirement is recurring contributions and compounding—small deposits that will grow over a long period. Be sure you take advantage of your company’s retirement plan and maximize the company match, or open a traditional or Roth IRA and commit to regular investments. Consider this: If you invest $1,000 at age 30, make monthly deposits of $100, and earn 7% interest over the next 35 years, you’d have more than $192,000 when you reach age 65. Amazing, right

2. Diversify your savings: don’t put all of your eggs in one basket

Your retirement account is not the only place you should invest your money. Another mistake many people make is not diversifying their savings. In your 30s, there are sure to be some big-ticket items, like paying for a wedding, buying a home, or a new car. Open a savings account or brokerage account and determine your long-term and short-term financial needs. Diversify your assets among stocks, bonds, mutual funds, and cash to reduce risk and be strategic with liquidity.

3. Doubling down on debt

Your 30s are the prime time for promotions. You’re earning more and likely spend more, too. You can afford nice things, but sometimes this can be a slippery slope. “Keeping up with the Joneses” is a real thing. Once you get caught up in that world, it’s hard to get out.

Using a credit card is an easy solution, and it can help when money is a little tight or you need to make online purchases. When you can’t pay it off at the end of the month, however, you need to reevaluate your budget and spending. Credit cards are a tool that can help establish your credit score, but when you’re paying astronomical interest on your purchases month after month, you’re creating a burden that can wreak havoc on your finances.

Consider a personal loan if you need to consolidate debt or pay for significant expenses. Personal loans offer significantly lower interest rates compared to credit cards, which will help you save big in interest in the long run. 

4. Setting yourself up to be house poor

Now that you’re making more money, you might consider buying a home. Hopefully, you’ve saved some money for a down payment and have analyzed your monthly expenses to determine how much you can realistically spend. Don’t make the mistake of not accounting for other home-related expenses, like PMI (if you put less than 20% down), property taxes, home insurance, and more. A mortgage is a long-term commitment—sitting on the floor eating ramen noodles so you can “afford” the biggest house in the best neighborhood is no way to live. How can you save for your future if all your financial efforts are spent on paying your mortgage? It’s not a purchase you can return easily, so shop smart. You’ll be happier in a home where you can live within your means.

5. Living on the uninsured edge

Insurance can feel like a waste of money, especially if you don’t have to use it. When you do, however, it pays off big time. No one wants to think about a health issue or a home disaster, but it happens. Generally, insurance in your 30s should include health, disability, life, home (or renter’s), and an umbrella policy. Insurance is largely personal, so talk with a trusted advisor to help determine your needs. Keep in mind, too, that the younger you are, the less you’ll pay for life insurance, and the healthier you are, the less expensive your health coverage will cost—buying insurance now can save you money in the long run.

6. Delaying discussions about money

When you’re dating, finances are not a fun topic, and when you’re engaged, no one wants to ruin the excitement by talking about money. Financial differences between partners can be a serious issue if it’s discussed too late in the relationship. If you’re already walking down the aisle, it’s easy to say you’ll figure it out later, but it’s the number one reason couples argue and a path that can quickly lead to divorce.

You may come from different financial backgrounds or have different ways of making financial decisions. While they don’t have to match perfectly, you should be able to decide on a mutually agreeable system to budget your household finances. Once you merge your assets, it becomes a more difficult conversation. Don’t bring it up on your first date, but start thinking about it before you fall head over heels.

7. Splurging on your firstborn

Everyone parent wants their child to have the best of everything, but too many times that translates to a house full of toys, clothes, accessories, and top-of-the-line items. We get it—with all the excitement and lack of sleep, it’s hard to make smart financial decisions. But, if you don’t take the time to check your spending and your savings, your sanity will be gone before you know it.

Do you need the elaborate carriage-style stroller or the designer footie pajamas? Should you order the custom bedding? Think about the necessities, how long you’ll use them, and what your budget can handle. Your little bundle of joy will be loved no matter how much you spend.

8. Giving into the need for a new car

Years ago, people used to keep their cars until they ran them into the ground. Now, many make the huge money mistake of buying a new one every two or three years. While you can rationalize it all you want, it’s still a depreciating asset, and making a purchase every few years leaves you with a never-ending car payment. Today’s experts recommend spacing your new cars ten years apart. Buy a new car, pay it off in five years, and for the next five years, start saving for your next car’s down payment. If you take good care of it, you may even get a few bucks when you trade it in.

Given the frequent turnover rate of cars today, you might also consider a used or “pre-owned” car (if that makes you feel better). It’s already depreciated at someone else’s expense, and if you buy from a reputable dealer, you could save some serious cash. Before you head out for a test drive, check Kelley Blue Book to get an idea of how much you should pay.

9. Looking at your career in the short-term

You probably have more than ten years of work experience by now. If you don’t love your job or there’s no long-term growth opportunities, now is the time to switch gears. With your knowledge and experience, it’s the opportune time to update your resume and see what else is available. Chance are you’ll be more valuable to the competition and should be able to negotiate a higher salary and more responsibility.

This is the time to position yourself for your peak earning years. With new job offers, consider the company’s benefits, like health insurance, life insurance, a dental plan, and a 401(k) plan. Do they offer telecommuting, a flexible schedule, or a car allowance? While your salary is important, your entire compensation package, which includes your benefits, should be the real measure.

10. Not having an emergency fund

People lose their jobs, homes need expensive repairs, and family members get sick. No one expects those things to happen, but they do. You need to be financially prepared for emergencies. A few hundred dollars won’t cut it these days, so make sure you have a plan. Experts say that you should have at least six months’ worth of living expenses tucked away in a place where you aren’t tempted to withdraw unnecessarily.

Everything you’ve worked for could easily be swept away during a crisis, and recovering financially may not be easy. If you haven’t been saving for something like this, start now. It may be the most important thing you do to protect yourself and your family—and could help avoid a costly mistake.

The time to get serious is in your 30s. You’re getting ready for a lot of life changes, and you need to set yourself up well. Surround yourself with people you trust who can advise you and keep you accountable. Avoid the pitfalls by keeping your finances in order and focus on the future.

Student loan forgiveness: what you need to know

Student loan forgiveness is a hot-button topic right now. With the Biden administration’s latest announcement on their forgiveness plan, nearly 8 million borrowers are eligible for automatic loan forgiveness. Even more borrowers are likely eligible but will have to complete the forgiveness application to submit their income. We have the latest info on student loan forgiveness, how it affects you, and what you need to do next:

Know your loan

Before we begin with the current events of student loans, let’s take a minute to address those considering their first or newest student loans. It’s critical that you know what your loan means for you. You need to know the terms, the interest, how often payments need to be made, and other details that will make a financial difference to you later in life. Be familiar with your loans to avoid any surprises down the line. If you’re unsure what type of loans you’ve received, or if you’re unsure you’ve received any grants, including Pell Grants, you can log in to your account at studentaid.gov.

Research the differences

There are two types of student loans—federal and private. It may seem like an elementary concept, but too many students don’t realize which loan they have until they are already locked in. If you’re unsure, it’s okay—find someone at your school or a trusted colleague who can help you walk through the process. “Better late than never” definitely applies when it comes to learning about your loan—even though we think knowing the information ahead of time is even better than being late.

What is loan forgiveness?

The current administration has extended the student loan payment pause for a final time through December 31, 2022 and announced one-time student loan debt forgiveness. While not everyone qualifies, many of those in student loan debt may find their budget loosening as a result. The current loan forgiveness plan allows federal borrowers to receive up to $10,000 in forgiveness and Pell Grant recipients to receive up to $20,000 in forgiveness. This relief is limited to borrowers who make less than $125,000 per year or married couples (or heads of households) who make less than $250,000 per year. 

Is my loan canceled?

Not necessarily—if you owe more than $10,000 (or more than $20,000 as a Pell Grant recipient), you are responsible for any additional amount you owe after the initial amount forgiven. The forgiveness plan provides some relief for the mounting student loan debt plus negates some effects of the pandemic, as many people found themselves unexpectedly without a job at some point over the last two years.

Does everyone get loan forgiveness?

Most federal loans are eligible for forgiveness. However, this does not mean that all hope is lost. If you struggle to make your private student loan payments, reach out to the company that provided your loan. Many offer programs or options that can give you some financial slack for a little while. Don’t get yourself into even more debt, though—be sure to verify the terms of your private loan options just like you would for the loan itself. If your monthly payments are too high, you can refinance or consolidate your private loans to lower your payment or have one manageable loan. 

What about student loan relief?

Student loan relief is extended to December 31, 2022. After that, payments will resume. You have a few months to work things out, so take a look at your budget and determine how you can make those payments again as soon as the relief period ends.

How do I get loan forgiveness?

The application to receive student loan forgiveness will be ready by early October—you can sign up to receive updates on the form’s status. Be sure to have your information prepared before the application opens. Check that your income and loans qualify, and gather any records that might support your request. Federal student loan borrowers should aim to apply no later than November 15th. It will take around six weeks to get cancellation after applying for forgiveness, and you’ll want your balance to be eliminated or reduced before December 31st (when the payment pause expires).

If you’re not eligible for student loan forgiveness, or if you still owe a significant amount of money after part of your loans are forgiven, Georgia’s Own is here to help you gain control of your financial freedom. We offer the option to refinance or consolidate your federal and private loans into one monthly loan, giving you one manageable payment and excellent rates—and a quicker route to becoming debt free. Click here to get started today. 

Why should you update your software?

As your trusted financial institution, we believe it’s crucial to ensure our members know how they can protect their financial information. One of the easiest ways to keep your information secure is to keep your phone or computer software and apps updated. It’s necessary to update your software regularly to ensure hackers can’t access private information, like your Social Security number or bank account numbers. Below are four best practices for updating your software:

Update often

Always keep your software updated when updates become available and don’t delay. These updates fix general software problems and provide new security patches where criminals might get in. Hackers are always looking for new ways to get to your data through software, so updating your software is an easy way to stay a step ahead.

It’s better to install software updates as soon as they’re available. If you can’t, a good rule of thumb is to check for significant software updates weekly. You should also regularly back up your data to protect it from accidental loss.

Get it from the source

When downloading a software update, only get it from the company that created it. Never use a hacked, pirated, or unlicensed version—even if your friend gave it to you. These often contain malware and cause more problems than they solve.

Using unlicensed or pirated software can have severe consequences. Not only does your personal information become vulnerable to cybercriminals, but it’s also illegal. Using or distributing pirated software violates copyright law, and you could face up to $150,000 in penalties. You can even face up to five years in prison.

Make it automatic

Legitimate software usually provides an option to update your software automatically. Automatic updates allow you to get the latest security fixes as quickly as possible without doing anything. You can let your device do all the work when newer software or app versions are available.

There are some reasons to disable automatic updates. If you like knowing what changes or improvements are coming to apps or software, you can turn off automatic updates to keep yourself informed. Turning off automatic updates also allows you to control when they happen. But, some app or software updates involve critical security fixes that hackers actively seek. If you disable automatic updates, stay tuned to any announcements the developer may have about security updates to keep data secure.

Watch for fake software updates

Maybe you’ve seen pop-up windows when visiting a website or opening software that urgently asks you to download something or fill out a form. These are always fake and should not be followed. A browser will only warn you not to move forward or stay on a specific web address because it might not be secure or could contain malware.

Some phony software updates are more distinguishable than others. Pop-ups informing you that your device is infected with a virus or malware play on fear—and if you click on that pop-up, you’ll unknowingly install a virus or malware. Legitimate anti-virus software developers don’t use pop-up ads.

One of the most devious methods is receiving a notification via email that you need to update your software. You’ve provided your email address to the software company, and it’s reasonable to expect email communication about updates. Pay attention to the sender’s email address if you suspect something is off.

Following the above steps is essential to securing your personal and financial information. This is the second in a series of cybersecurity education posts to help you stay safe online. Over the next few months, we’ll share greater insight and tips on other ways to safeguard your online presence. In the meantime, we offer additional resources to brush up on your financial education with ACHIEVE for consumers and small businesses. Click here to start learning today.

What to do after becoming debt-free

When you’re focused on getting out of debt, it’s easy to get caught up in the process and not think about what happens afterward. But, it’s necessary to establish a plan once you’ve eliminated your debt, or else you’ll slip back into the cycle again. Below are crucial steps you should take after becoming debt-free:

Organize your finances

Preparing for your new financial future starts with organizing your finances. The easiest first step is to automate your finances. Put any recurring bills, like your cell phone, electricity, or credit card on auto-pay, so you don’t miss a due date. You can even automate your retirement account and emergency savings contributions.

Now’s also the time to organize any financial paperwork you may have neglected while paying off debt. Sift through papers and shred anything you no longer need, like old cable bills. Keep only the most recent copies of items, like account statements or insurance policies. However, one exception to this rule is tax returns, which you should keep for at least three to seven years.

Build a solid emergency fund

Having a solid emergency fund covering at least three to six months of expenses is crucial—and something you may have neglected to save for while paying off debt. Now that you’re debt-free, it’s time to get back on track towards saving for the unexpected.

You may need to revisit your goals and figure out how much you should have saved in case of an emergency—and if you don’t have a savings account for unexpected expenses, you should open one now. The bigger your savings are, the more equipped you’ll be to financially handle an emergency (and avoid falling back into debt).

Continue budgeting

After spending months (or even years) sticking to a strict budget to pay off debt, it can be exciting to have extra cash—it can also be tempting to stray from your budget. But, if you stop budgeting entirely, you may become neck-deep in debt again.  

With more money on hand your monthly income has changed, which means your budget should, too. Take the time to reevaluate your budget and see how you’re spending or where you can cut expenses.

Contribute to a retirement account

The sooner you start saving for retirement, the better—but it’s never too late. If you haven’t started saving for retirement, look into an employer-sponsored plan, plus additional options like a Roth IRA. If you’re self-employed, look for a SEP IRA, a Simple IRA, or an individual 401(k).

The most important thing is to be consistent with your contributions. If your employer offers matching, try to take advantage of that. Don’t touch your retirement fund until you reach retirement age, or else you’ll face tax penalties.

Start saving for major purchases

If tackling debt was a motivator to start saving for a home or a car, you’re one step closer to achieving that dream. Establish a separate savings account to reach your goal, and start contributing—you’ll get there before you know it! If you’re a first-time homebuyer or are applying for a car loan for the first time, Georgia’s Own has options to guide you through the process.

Review insurance coverage

You may have been skating by with the bare minimum insurance coverage while trying to pay off debt. Now that you have more money, you may consider increasing your insurance coverage. For example, if you don’t have life insurance coverage, you may want to look into that. Depending on your age, you may also want to consider additional coverage, like long-term care insurance if you’re in your 40s.

Refresh your financial plan

After making sure you’re covered for any future events (both good and bad), you can start refreshing your financial plan. As previously mentioned, now that your income has changed, your financial plan should change, too—your financial plan from two or three years ago may not work anymore.

Take the time to assess your financial goals and see where you should reevaluate. Start looking at your short-term goals and decide where you are with meeting them. If you’ve met them (or are close to meeting them), you may want to adjust them to your current financial circumstances.

Consider investing

Now that you’re debt-free (and if you have an established emergency fund) try diversifying your investments. You can consider financial products and other investment options with a higher risk that have higher earning potential, like stocks, bonds, or mutual funds.

If you’re new to investing, consider working with a financial planner. Georgia’s Own offers investment and retirement services to help you get on track and make the right choices when it comes to your money—and you can meet with one of our financial planners at no cost and with no obligation to discuss your options.

Treat yourself

Being debt-free is an incredible feeling, so it’s only appropriate that you celebrate! Having a healthy financial plan is knowing when to be disciplined and when it’s okay to treat yourself. Have a party or take yourself to a fancy dinner—you deserve it after putting so much work into reaching your goal of becoming debt-free.