7 "Silent" Money Traps to Avoid In Your 30s

Introduction:

(1) If you are in your 30s, you really want to watch this video. Hi if you are new to the channel, my name is Tae from Financial Tortoise. In this channel, I discuss personal finance, investing and all the while surviving in a multigenerational family. If these topics sound like something you like to learn more about, I would much appreciate it if you consider subscribing

(2) and also hitting that like button. And if you have yet to download your free copy of “Sandwich Generation’s Guide to Financial Security - 10 Steps to Securing Your Family’s Financial Future! ” please go to my website at financialtortoise. com and do so. I send out weekly newsletters with

(3) other great tips on mastering your money and I wouldn’t want you to miss them. Our 30s are completely different compared to our 20s. For many of us, it’s the decade in our lives when we really feel like adults. Many of us get married, have kids and take on big responsibilities at work. So given all that is going on, it is easy to fall into many “silent” money traps.

(4) Traps that silently creep into our lives, and before we know it, we are trying to dig ourselves out in our 40s. So if you want to avoid it, follow along with me with some of the most common money traps to avoid in your 30s. And to make you feel any better, I’ve fallen into many of them myself.

1 Silent Money Trap:

(1) Number one on our list is trying to “look” successful. Our twenties are oftentimes marked with the theme of “exploration. ” We are fresh out of college and are trying to find ourselves in the big wide world. We don’t necessarily have the pressure to look successful because all of us are trying new things and figuring out what we want to do with our lives. But in our 30s, that changes. For many of us, we start to feel the pressure to “look” successful. I mean when we tell

(2) someone that we are in our 30s, we don’t feel like a kid anymore. We are full-fledged adults right? We want to show everyone around us that we have made it and that we are doing well for ourselves. I remember distinctly when my son was born. I was 32 years old and for some weird reason I had an image in my mind that I needed a SUV. But not just any SUV, but a Volvo CX90. Maybe I saw it in a magazine many years before. An image of a family taking a trip in one of these cars. It symbolized

(3) not only providing a safe mode of transportation for my family, but signaled to everyone else that I was a kind of dad that could provide financially for his family. Thankfully, the better sense got a hold of me, and I restrained myself from falling into this inner pressure. I was trying to pay off my $105,000 student loan at the time, and a new car would have been ridiculous. But this is a common pressure that many people in their 30s feel often. We can carry on driving a beater in our 20s because we are still trying to find our place in the world. But the world tells us that by the time

(4) we hit our thirties, we should have found our place, and a way to signal that to the world is with nice things that make us “look” successful. It takes conscious effort to fight this social pressure. I mean how ridiculous of me to have been driving around a $70,000 car when I still have over six figures in student loans right? You don’t need to “look” successful in your thirties. Actually “be” successful by saving and investing that hard earned money. The world doesn’t care as much as we think it does. Another “silent” money trap that many of us fall into in our 30s

2 Silent Money Trap:

is still having our fun, but quite expensive friends. We all have them. The party starts when they arrive. They know just the right restaurant to go to for your 35th birthday. They are going to Miami for the weekend and you’d be crazy to miss out on this once in a lifetime opportunity.

It's not that these friends aren’t fun. The problem is that, these friends can be expensive to keep up with. And as we all know, peer pressure is real. We want to do what everyone else is doing and if that means spending money that we don’t have, then so be it, right?

But this is where we must be extra careful in our 30s. This is the time we want to get real serious with our finances. And in order to do that, we can’t spend like there is no tomorrow like some of our friends. They might have more disposable income than you do or just a more relaxed perspective of money, but that doesn’t mean you need to continually try to keep up with them. If we know who they are,

actively try to limit the amount of money and time we spend with them. If that’s just impossible, it might be time to get more frugal friends. Number 3 silent money trap to avoid in your 30s is buying

3 Silent Money Trap:

an expensive home. And this is very closely tied to the first silent money trap that we covered earlier - the desire to look successful. And nothing says success louder than home ownership. For generations, home ownership has been touted as the American dream. It symbolizes stability and wealth.

And rightly so, given it comes with several practical benefits such as the ability to build home equity and location stability for the family. However, we can take this reasoning too far to justify purchasing homes that might be way over our comfortable budget. When you are shopping for a home, you will have to work with many individuals ranging from the bank lender to a real estate agent.

Their incentives will be to sell you as much house as possible because it means a bigger piece of the pie for them. And it's hard to see the scale of the financial obligation we are getting into with homes because most often we are financing it with long-term 15 to 30 year loans. I have seen too many young families buying a home because they feel emotionally connected to it without really comprehending that they will be stuck with a hefty

mortgage debt for the next 3 decades of their lives. Home buying will likely be the biggest financial purchase that any of us will make in our lives, so we should really think hard about the financial consequences before jumping into it. Number 4 silent money trap to avoid in our

4 Silent Money Trap:

(1) thirties is to continuously ignoring financial literacy. It might be somewhat forgivable to not invest in our financial literacy in our twenties. I mean, we are busy meeting new people, seeing new places and experiencing new things right? And because we don’t have much money to begin with, the consequences of our lack of financial literacy are usually limited. However, if we don’t invest in developing a sound base of financial literacy in our thirties, they can have dire consequences that will echo through the rest of our lives.

(2) Like having a basic understanding of credit score and its impact on interest rates and debt. Imagine you are about to get a bank loan for a home mortgage but you didn’t invest the time to understand your credit score, so instead of getting a 3% loan, you get a 4% loan instead. You might dismiss it as, oh well, how much would 1% hurt right? And you just sign the dotted line for that home mortgage. Well, how about $100,000.

(3) Would that wake you up? Some surveys report that nearly two-thirds of Americans can’t pass a basic financial literacy test. We don’t know how to improve our credit score. We don’t know how to budget. We don’t know the fundamentals of investing. Thirties are a busy time. You are getting promoted in your career. You are building a family. You have heavy responsibilities.

(4) But don’t let that be an excuse to not invest in your financial literacy. If you are watching videos like this, you are already ahead of the curve. So great job. Take it steps further by picking up personal finance books, so that you can harness the power of financial literacy and not get taken advantage of by the financial industry. I’ll have a link to a few of my favorite personal finance books below in the description for your reference.

5 Silent Money Trap:

(1) Number 5 silent money trap is a real dangerous one if you really want to build wealth. And that is not investing in the market. Investing sounds and feels complicated. It conjures up images of complex mathematical formulas and really serious looking people evaluating fancy charts on a computer screen. But it only sounds and feels complicated because the financial industry is working hard to make you feel that way.

(2) It’s the ultimate financial marketing machine at work. And what happens to many of us is that we get so overwhelmed and never pull the trigger to investing in the market. And this can be detrimental to our wealth. If you are in your 30s and you have yet to invest any money in the market, you are not being very generous to your future self. I guarantee you that when you are in your 60 or 70, you will regret not having

(3) invested in the market sooner because you were scared. Having cash is good. But it will not build substantial wealth. It loses its value overtime due to inflation. Thus you want the market to work for you to compound your money over time. And the sooner you begin the better.

(4) And this doesn’t mean you go out and start buying all Tesla stocks. No, you want to purchase low cost index funds like VTSAX or other similar funds. I won’t go into all the details here, but please check out my video here to learn more. Number six silent money trap to avoid in your 30s is not investing.

6 Silent Money Trap:

(1) in your career. And what I mean by this is really investing and developing your career capital. 20s are a great time to explore your career options. You want to throw things against the wall to see what sticks. Meet new people and explore what the world has to offer. However, as you get into your thirties, you want to start doubling down in your career field so you can start growing your income potential.

(2) I’ve seen too many people who are approaching their careers in their 30s in the same way as in their 20s. They are still trying out this job and that without really sticking to one. Giving it enough time and persistence to maximize its income potential. I know people who have tried 5 different career paths, spending money in education, but still not having made much traction in any of them in their mid thirties. And without a strong career path, your income potential is limited. And this limits your ability to save and invest more towards building wealth.

(3) I also know of many other individuals who persisted in investing their career path throughout their 30s and have sometimes doubled or tripled their income because they were able to build a solid foundation of career capital. Cal Newport, the author of “So Good They Can’t Ignore You. ” defines career capital as - “Career capital are the skills you have that are both rare and valuable and that can be used as leverage in defining your career. ” — Cal Newport This could look like being an accredited, well established accountant with solid experience at a reputable accounting firm.

(4) You have the potential to leverage your career capital to negotiate for a higher salary or even go part-time to spend more time with the family. It could also look like a specialized registered nurse who has solid experience in bed-side nursing at a large well established hospital. You have the ability to leverage your career capital at any other similar hospitals for better pay or better hours. But not investing in your careers in your 30s means you don’t have this career capital. And without strong career capital, it will be hard to have that wealth momentum through your 40s