The 3 Worst Money Moves You Can Make in Your 30s

Every decade of your life is important. But as far as your finances are concerned, your 30s are crucial. You still have enough time to fix any mistakes you've made so far and to establish good financial habits, including saving, investing, and staying out of credit card debt.

You don't exactly have a ton of time, though. Your 40s are just around the corner (it's a terrifying thought, I know). The older you get, the harder it is to radically change your financial situation.

There are a few bad money moves that are particularly common for people in their 30s. Here's what you need to watch out for.

1. Taking on too many big expenses

Getting older isn't all bad. One of the perks is that you may be making more money than you were before. Research by The Motley Fool Ascent on the average U.S. income found that earnings peak between 45 and 64 years old.

People often see some big pay increases starting in their late 20s or during their 30s. This is great news, but it can also lead to overspending if you're not careful.

There's nothing wrong with spending more as your income goes up. The point of making money is using it to live the life you want. Just be careful not to overdo it. Some people decide a higher salary is a good reason to upgrade practically everything. They get an expensive mortgage. They go shopping for luxury cars. And if they really want to deplete their savings account, they buy a boat.

Ideally, your fixed monthly bills won't take up more than 60% of your income. If you can stay at or under that amount, you'll have plenty of discretionary income.

2. Getting too career-obsessed

As you progress in your career, you could find yourself devoting more time to work. Working more hours is one of the simplest ways to increase your income if you have a job where you can work overtime or if you're a freelancer.

This is one of those problems that can slide under the radar, because it seems like you're doing everything right. Working long hours to be more successful is normally considered a good thing. Just read any puff piece about a CEO who gets up at 5 a.m. and works 16 hours a day.

Ambition is an admirable trait, but it's still important to have a work-life balance. If you work too much, it can lead to burnout. You'll also miss out on spending time with family and friends, which is something you can't get back later.

If your work-life balance has tilted too far in the work direction, start scheduling more personal time for yourself. Make sure you have plenty of time each day for non-work activities, and commit to taking at least one vacation every year. You'll likely find that recharging your batteries does you well.

3. Not saving for retirement

Everyone needs to save for retirement, and the earlier you start, the better. If you didn't do so in your 20s, that's normal. The median retirement savings for Americans under 35 was $18,880, the lowest of any age group, in 2022.

You can still catch up -- but the clock is ticking. The reason so many experts recommend starting early is because your money will have more time to grow. When you have 30 or 40 years until retirement, that gives compound interest plenty of time to do its work. When you're down to 10 or 20 years, your money won't have time to grow nearly as much.

For example, let's say you start contributing $1,000 per month to your retirement when you turn 35. You get an 8% annual return, in line with the stock market's long-term average. After 30 years, you'll have contributed $360,000, but you'll have $1.47 million.

Now let's say you start at 45. You contribute even more: $1,500 per month. You also get the same 8% annual return. After 20 years, you'll have contributed the same total of $360,000, but you'll have $889,613. Waiting 10 years costs you just over $580,000.

With any luck, you'll be much more comfortable financially in your 30s. If you spent your 20s on a tight budget, this will be a breath of fresh air. But this period of your life isn't without its challenges. Be careful not to start overspending or spending every waking hour on work, and make sure you're saving for retirement every month.