7 Purchases and Money Mistakes Gen Z Should Never Make Before Turning 30
It’s not uncommon to make money mistakes in your 20s. It’s the time of your life when you’re becoming an adult and learning how finances work, which can be challenging at times. So, it can be easy to make money mistakes early on, which can follow you into your 30s and beyond (if you’re not careful).
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There are a number of purchases and financial pitfalls that Gen Z should always avoid before entering their 30s to set themselves up for long-term financial success.
Here are seven purchases and money mistakes Gen Z’ers shouldn’t make before turning 30, according to Medium, Forbes and The Ascent:
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1. Buying Expensive Electronics
Technology evolves every year and there’s always a shiny new laptop or smartphone to spend money on. However, consider waiting for Black Friday or Cyber Monday sales, buy older model electronics instead, or wait until a newly released electronic becomes less expensive before making a purchase.
2. Buying Designer Accessories and Clothes
Designer accessories and clothes are beautiful no doubt. But, the cost of these luxury items can seriously break the bank. Instead, shop at discount apparel retailers such as H&M and Old Navy to save a bundle.
3. Buying Expensive Vehicles
When you’re a younger Gen Z’er, you definitely don’t need a fancy car. Remember that a car is a depreciating asset and loses value the moment you drive it off the lot. As an alternative, you can purchase a compact car with low maintenance costs and great fuel economy or buy a pre-owned vehicle.
4. Living Above Your Means
It’s never financially smart to live above your means. This means spending more than you make and leaning on credit cards to support a lifestyle that you can’t actually afford (which can land you deep in debt). Instead, find housing with a monthly payment that’s less than your means can afford, choose discount grocery stores and retailers and always hunt for the best deals. Living below your means can allow you to build an emergency fund and free up cash to save for retirement along the way.
5. Relying on Credit Cards
Credit cards can be your financial downfall if you’re not careful. Although you might have a high credit limit, it’s not okay to spend extra money that you don’t actually have in your checking account. It’s best practice to treat a credit card like a debit card: Only make purchases you can afford to pay in full when your statement comes due each month. This way, you’ll avoid high-interest credit card debt.
6. Not Setting a Budget
Budgeting is key to tracking what you’re spending your money on each month. If you’re new to budgeting, you can start by separating your spending into different categories using the good old fashioned pen and paper method. Setting strict spending limits can help keep your finances in check and help you avoid debt.
7. Not Saving for Retirement
Saving for retirement as early and as often as possible can unlock a secure financial future once you call it quits at work. Saving early allows you to take advantage of the magic of compound interest. Your money will have more time to grow over time, exponentially increasing your retirement savings.
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