I’ve seen the phrase ‘life begins in your thirties’ or 'Dirty Thirties’ been thrown round a lot. Apparently, some say your thirties are better than your twenties. At Fempire Finance, we cannot comment because we are all in our twenties (hello 90s babies) but we can agree that in your 30s there may be some life-changing events taking place. We've consulted i.e. annoyed A LOT of people in their thirties to get their take on the 4 money mistakes to avoid in your thirties. And we know the question you are asking is okay ‘how do I make the most of out my thirties financially? What do I do and what do I not do? Well...
DO NOT cash out on your retirement savings when you switch jobs
Compared to parents and older generations, those in their thirties and younger are much more likely to switch jobs at a higher frequency. Whilst switching jobs every couple of years is not frowned upon anymore, do you know what is? Cashing out on your pension pot every time you do.
When you leave a job, you have a number of options:
1) carry on making contributions to your old pension
2) combine the pensions by transferring the value of its benefits to another scheme (this is called a ‘cash sum transfer’)
3) If you worked at your job for less than 2 years before you left and if you were in a defined benefit pension scheme for less than those 2 years, you might be able to either; get a refund on what you contributed (this is what we refer to when we say 'cashing out')
Moving jobs frequently can already costs us in terms of having to make a pay check stretch longer or having to retrain. But remember compound interest is our friend in all of this. Compound interest on a pension means that your money grows exponentially the longer you leave it invested in a retirement fund. So under all circumstances preserve your pension rather than withdraw it for a quick couple of thousands.
DO NOT spend too much money on a wedding
The average age to get married in the UK is 37.9 years old for men and 35.5 years old for women. As the stats show, this is an activity that might be very possible whilst in your thirties.
So, you’re getting married (congratulations by the way). You're having open conversations with your partner (duh) and now you’re planning the wedding. The current average cost of a wedding in the U.K is now £16,005, compared to 2019s average cost of £15,171. Pricey isn’t it? Weddings can be a MASSIVE cause of debt for some couples.
So how can we help this expensive activity in life? Plan! If you know you are getting married, it may be worth delaying the wedding to give you some time to save. It should also be remembered that weddings are a massive cause of stress, usually coming from the view that a wedding has to satisfy everyone and this can lead to spending more money. Well, breaking news, it doesn’t have to satisfy everyone. Just you and your partner. So you shouldn’t feel forced to spend additional money to make it the most elaborate occasion of the century (of course, if you want it to be, it can)
DO NOT spend a lot of money on your first child
We’re coming at you with the stats again but the average age to have a baby is late twenties meaning a child is likely to be in their infant years whilst your in your mid thirties. And what does every person want to do with children in their infant years? Shower them in gifts. Well, we’d just like to say. NO. BABY. NEEDS. DESIGNER. CLOTHES. Babies are already expensive (medical expenses, food, cribs, bottles, toys, nappies) It’s all very exciting but it should be remembered that it is most likely that your offsprings expenses will rack up when they are much older (education , housing etc.). So focusing on the long-term and not getting distracted by the tiny Gucci shoes is something we recommend.
And hey, second born children need some love too!
DO NOT use your mortgage as if it’s an ATM.
Around a third of all home loans made in the UK are actually remortgages. Remortgaging is where you take out a new mortgage on a property you already own — either to replace your existing mortgage, or to borrow money against your property. Whilst it can save you THOUSANDS this service can be abused if done wrongly (but in the most cases banks and providers should step in and stop it from going completely downhill) But the truth is, you can end up redrawing too often or you end up getting a loan against the property’s increasing equity.