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Mistakes. They happen. But the basic premise behind finance is, your money compounds over time. So, unfortunately, if you make financial mistakes, they can have bigger consequences down the road. With a little insight, some of the most common mistakes can be avoided. Based on a piece in The Wall Street Journal1, here’s a look at the top financial missteps we make decade by decade, and how to avoid them.

Mistakes to avoid in your 20s:

• Little financial knowledge
• Not tackling debt
• Investing too cautiously

It’s hard for 20-somethings, there’s very little education about finances in school. As a result, they often don’t know how to invest, and hence make common mistakes (putting too much in cash, etc.). There’s also the issue of debt/loans to contend with.

Don’t let a limited knowledge hold you back — get financial advice. Your goal is to tackle debt, and if possible, prioritize retirement savings before lifestyle expenses start to add up.

Mistakes to avoid in your 30s:

● Living with high expectations
● Too many expenses
● Overwhelming debt

There’s a lot going on in your thirties, often people are getting married and buying a home all at once. In the past, some of these financial responsibilities were tackled in the latter twenties. Nowadays these big life moments are all piling up within a short time of each other resulting in too many bills tugging at the budget.

Aim to reduce your living expenses so your lifestyle matches what you need and nothing more. Living with high expectations can lead to financial problems, such as overwhelming debt or even bankruptcy. Streamline your expenses so you can enjoy life more now, and in future decades.

Mistakes to avoid in your 40’s:

• Taking on a big mortgage
• Saving too much for kid’s college
• Overly supporting aging parent costs

During your forties, the two big factors that can tip the scales against you are: a big mortgage and saving too much for your children’s college education. A third factor for some can be costs related to aging parents.

First, be careful about buying too much house — try to avoid a hefty 30-year mortgage that will last well into retirement. Look to a 15-year mortgage as an option. Regarding college savings and parental costs, have a talk with both parties to let them know that you cannot be the sole provider of their financial needs.

Mistakes to avoid in your 50s:

● Being too risky
● Retiring too early
● Lifestyle cost creep

Unlike twenty-somethings, individuals in their 50s often take on too much risk trying to achieve certain money goals. Now’s the time to evaluate your current trajectory and reduce any unnecessary risk. Consider downsizing to a smaller home or cutting lifestyle costs that have crept up over the years.

Your fifties are a time for making decisions that are a sure thing. It’s best to avoid added risk such as starting a new business or withdrawing funds out of retirement accounts before the appropriate time.

Mistakes to avoid in your 60s and beyond:

● Lack of proper financial management
● Lack of communication
● Afraid to delegate

As we move onto the final phases of our lives, the lack of proper financial management can become a real problem — not only for you but for your dependents. Consider adjusting your investment style as you’ll want to assume less risk. Your health and life expectancy also come into play now, as you’ll want to get an idea of how long your money needs to last. There are various calculators like this one that can give you a general idea, but they are vague at best. Overall, don’t wait to talk to the appropriate financial professionals about your affairs. Starting sooner than later can help make your transition into retirement much smoother.

The takeaway

While our mistakes can vary for each decade, the overall theme is the same — live within your means. Whether you’re just starting your career or are preparing for the sunset years, the more you can keep tabs on your finances, the more successful you’ll be in the future.