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11 Money mistakes to avoid from your 20s to your 60s


The adage “wisdom comes with age” does not necessarily ring true when it comes to money matters. Here are the financial slip-ups to watch out for at each decade of your life. 

© Getty Images

Every one of us makes mistakes with money. We do not save enough or we spend too much on things we can live without. We may even make bad investment judgments by purchasing assets based on word of mouth or falling for a certain short-lived trend. It is likely that we would still be making money mistakes well into our 60s.

Stay on track by avoiding these common financial mistakes:

Financial mistakes in your 20s

In your 20’s, you are most probably new in the workforce, trying to work your way up. Unfortunately, this also translates to a low income but being young, socialising usually takes priority causing you to overspend and under-save.

1. Overestimating purchasing ability

You could be wanting to travel the world or buy a luxury car, but you do not earn enough to afford these things. If you cannot pay for these wants from your own pocket, you may end up incurring huge debts that hold you back for years. Get used to saving for the things you want instead of solely depending on credit.

2. Delaying retirement savings

When you are in your 20’s, retirement can seem far away. The earlier you start stashing away savings for this purpose, the more you will earn with compounding interest and the more comfortable your retirement will be. The money you save in your 20’s is potentially worth way more than anything you will set aside in your 40’s.

3. Abusing credit cards

While credit cards serve a valuable service by providing convenience, they can also tempt you into living beyond your means. At this stage, your credit card bills can seem burdensome if you are not careful. Failing to settle the full amount, you may resort to paying the minimum balance only, incurring a big sack of accumulated interest. Create a spending plan based on your income and stick to it. Use credit cards only if you can pay the balance off in full at the end of each month.

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Financial mistakes in your 30s

Smiling Asian Couple Planning Finances
© inis Tolipov | 123rf

In your third decade, you are most probably married and thinking of expanding the family, if you do not have kids already by then. More financial responsibilities are pouring in, and it will take some finesse and strategy to balance both your finances and providing the best for your family.

4. Not planning for your children’s future education needs

Holding your bundle of joy in your arms, the thought of him or her going to the university may seem light-years away. But, time flies faster than you could ever imagine. As the cost of tertiary education is set to rise in the coming years, you should start planning for your child’s university fund right from the birth of your child. If you have more than one child to fund through university, these costs can rack up quite high. By procrastinating or not having an education fund at all, you may be forced to dip into your retirement fund before your golden years.

5. Taking insurance lightly

Individuals in their 30s often neglect to protect themselves with adequate insurance. They often lose out on the chance to buy life insurance at a lower premium and delay the purchase of disability, personal accident or health insurance. Going without sufficient coverage is financially risky. When you have dependents such as spouse, children and ageing parents, it guarantees a financial safety net for your entire family if something were to happen to you.

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Financial mistakes in your 40s

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By the time 40 rolls around, you would most probably have reached the peak of your career and would be earning substantially more than you were in your 20s and 30s. However, most of you would still be busy spending money on wants which may not be necessary such as luxurious vacations, bigger cars, or new houses, and delaying your retirement savings.

6. Not reviewing your investment portfolio

Yes, it is a good thing that you have an active investment portfolio, but as you go through different stages in life, your risk tolerance changes. You may have been willing to take more risks when you were in your 30s as you still had the ability and time to earn an income.

However, as you are nearing retirement, you may want to review your portfolio to allocate more of your assets in more conservative investments, such as a ‘bread and butter’ property which could give you good rental returns. However, moving your investments to a safer avenue too early could also cause you to run short on your nest egg. You need to ensure that your savings can support you well through retirement. Balance is the key!

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7. Ignoring writing a will

Obviously it is hard to imagine being in your death bed when you are still young and active. However, writing a will should be on your must-do list when you are in your 40’s, if not earlier. A will protects your family and your assets if something happens to you. It also ensures that you have an attorney that will make financial and legal decisions on your behalf if you become incapacitated.

Financial mistakes in your 50s

© XiXinXing | Getty Images

Hello, middle age! By now, your children would probably be in university and you only have a decade left before retirement.

8. Using retirement savings to pay for child’s education

If you have children, it is not wrong to help pay for their tertiary education-related expenses, but not at the expense of your retirement savings. Too many parents sacrifice their retirement savings and withdraw from their EPF in favour of their children’s education. Put your retirement needs first and do what you can to save for both, which is why it’s important to start planning for both as early as possible.

9. Investing like you are in your 30s

As you are nearing your retirement, you become even more protective of your savings. Considering the fact that you could be living well into your 80s or 90s, you would require a substantial amount in retirement. Simply preserving capital is not a sustainable financial strategy, the money must be put to work. While making an investment is risky, it is equally risky if the money is kept under the mattress. So make sure you keep growing your nest egg well into your 50s and beyond, to combat against inflation and support yourself financially.

Financial mistakes in your 60s

In the 60s, you have finally retired, wrinkles set in, and your children have settled and have started their own families. Money becomes extremely important to you now that you no longer have an income stream. The best-case scenario would be to enjoy your golden years in relaxation and do things that you were too busy for, or didn’t get to choose before when you were climbing the corporate ladder.

10. Completely abandoning investments

You tend to build your funds until you retire, and then stop proactively building and start living off those funds. However, retirees can continue to maximise on their investments to stretch their retirement income through investments that offer monthly or quarterly distributions. Ensuring your investments deliver a steady income stream can help you better manage your budget and stretch your money further.

11. Not maintaining a medical insurance

As you grow older, your medical insurance becomes more and more expensive. Most people would cancel it, and focus their finances in other areas of their lives. However, there is a reason why the cost of medical insurance increases in tandem with your age –people are more prone to sickness as they get older and medical bills would start pouring in. That is when you will realise that you should have kept your medical insurance.

Making full use of financial opportunities at every decade of your life is important. Avoiding the financial mistakes listed above as you go along can save you a lot of stress and money, both now and in other stages of your life. More money handled appropriately means more opportunities and more financial security for you and your family.

This article was repurposed from “Financial Mistakes To Avoid For Every Decade” on | Edited by Reena Kaur Bhatt

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