The 5 Biggest Financial Mistakes People Regret In Their 30s And 40s
Money missteps that may not seem huge in the moment, but they're the ones people most often regret.
Kaboompics.com | Canva I’ve been watching people’s stories of financial struggles on YouTube. I see these videos pop up with titles like “I’m 47 and broke,” and I can’t help myself. I have to know what happened.
Sometimes, I find out that they had a string of bad circumstances, like getting let go from a job and not being able to find a replacement quickly, or getting a divorce that left both parties financially devastated. But most of the time, and research from The American Psychological Association supports this, it’s a series of bad money decisions.
Here are the five biggest financial mistakes people regret in their thirties and forties:
1. Quitting a steady job
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I have seen plenty of people mention how they were let go (especially the tech workers), and I feel for them. That’s not something they could control.
However, I’ve seen many more talk about quitting a steady job to pursue their dream of being a YouTuber, TikTokker, horse farm owner, or whatever.
This is something I think about with my 17-year-old daughter. She’s a fantastic artist and writer; I always tell her to pursue those things. But my husband and I also encourage her to get a job after college with a steady income.
It’s great to pursue your dreams, but it’s not always easy to make a living from them. Most people don’t think about all the things that need to be done behind the scenes:
- Editing and graphic design for YouTube & TikTok
- Consistently thinking of ideas that will sell
- Learning legal mumbo jumbo
- Accounting and business
- Marketing & promotion
It’s better to try out your dream job on the side and see if you can make it work without giving up your steady paycheck.
I always think about Scott Adams, creator of the Dilbert comic. He says he worked at his corporate 9–5 job every day, then went home and worked on Dilbert.
He did this for years until his cartoon got syndicated, and he was able to make enough to replace his income. (Plus, going to work gave him tons of ideas for Dilbert.)
Chase your dreams, but do it in a smart way. Otherwise, you may end up like the woman in the video I watched today. She’s 57, broke, and thinking of living in her car. All because she gave up her job to chase her dream of being an actress.
2. Getting a giant car loan
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I watched a TikTok of a girl in her 20s trying to get out of over $125,000 in debt.
She’s a content creator and was making bucketloads of money, sometimes up to $50,000 a month. She said she spent all of it on good furniture, designer clothes, and … a brand new car. A $55,000 Ford Bronco.
That would have been fine if she could afford it, but her influencer money dried up, and she was left with nothing but a giant mound of car debt. If you live in America, there’s a 99% chance you need a car. But you probably don’t need an overpriced car that’s solely “a status symbol,” as this woman admitted.
Pile that on with student loans and credit cards, and now you’re left with $125,000 of soul-sucking debt. Ouch.
3. Taking out money from a 401k
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For people who are broke and desperate, raiding their 401k can start to look like their only way out. To do this, they pay a huge penalty and capital gains taxes.
It’s a bad situation that turns out even worse because now they have to start over with their retirement. I’m going to tell you a secret about myself that I’ve never told another soul.
I did this. I drained my 401k. It was many years ago when I was laid off from my job. I wanted to stay home with my kids, but it was a mistake because it was a huge financial burden. I still feel so guilty about this. But I also felt guilty dropping my kids off at daycare every day.
We ended up taking all the money out of my 401k so we could survive. It was so stressful, and I would never recommend doing this.
We’re still a little behind with retirement because of it, but we’re catching up quickly, thankfully. Learn from my mistake and avoid doing this at all costs.
4. Getting into endless credit card debt
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While we were struggling financially, we got ourselves into a boatload of credit card debt, so I understand how it happens. You don’t have enough money in your checking account to pay for everything, so what do you do?
You pull the credit cards out. (I feel stressed writing about this because it brings me back to that time.)
A recent survey conducted by Clever Real Estate shows that 61% of Americans are in credit card debt, owing an average of $5,875.
Here are some other fascinating stats from the article:
- 6% of people believe they’ll never pay off their credit card debt
- 48% of Americans depend on credit cards for essential living expenses
- Americans spend over $1,500 on their credit cards every month on average
- 43% of credit card users say they spend more than they earn
- 29% of surveyors say they max out their credit cards every month
Credit card debt is so damaging because of the high interest rates. If you can’t pay for something now and have to go into debt for it, how will you pay it off when it’ll cost you even more money? (Credit cards have an average interest rate of 21.47%, according to this Lending Tree article.)
If you can’t pay for something now in cash, try to avoid putting it on a credit card. It’s hard. I know. But you’ll be so much better off not having the burden of debt keeping you awake at night.
5. Being house-poor
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It’s always touted as the American dream: Buy a nice house, surround it with a white picket fence, and fill it with 2.5 children and a dog.
But how much will that dream cost you? Finance experts advise not to spend more than 30% of your income on housing, but according to this news report, most Americans are spending at least 50% of their income.
“Perhaps the most troubling statistic — nearly 10% of women are spending 100% of their salary on housing.”
And if you’re spending all your money on housing, what happens? You get into debilitating credit card debt just so you can survive.
Because housing costs have gone up so much (more than 50x since the 1950s), it feels almost impossible to buy a house for a reasonable price.
My husband and I bought our townhouse in 2004, and it’s now worth more than 2x what we paid for it. All the townhouses in my neighborhood and the surrounding area are in the $500,000 — $1,000,000 range.
And that’s just a townhouse! Many of the single-family homes are even worse. It’s mind-boggling.
So, I feel deeply for people who are trying to afford housing. My in-laws bought their house in cash in the 1980s for about $60,000. If they were to buy it today, it would cost them over $700k. Who has $700k lying around?
But many people decide this is what they need for their families, and they buy a house with a payment beyond their means. Their mortgage costs are through the roof, and then they struggle to pay for everything else they need.
Speaking of roofs, you’ll probably need a new one while you’re in your home. They’re pricey. So are all the other costs that will come up along the way. (Ask me how I know.)
Home ownership is tough even with the best financial circumstances. I sometimes dream of being a renter…
I like to listen to people’s stories and their struggles to understand what’s happening in the world beyond my little bubble.
It’s heartbreaking to see people in their 30s, 40s, 50s, and beyond struggling financially. This is the time to start thinking about retirement, not trying to pay off credit card and car debt.
Starting from financial scratch at that age seems insurmountable. The good news is that the people I listen to all have a positive outlook on life and come up with plans for what to do.
If you’re in this boat, I recommend making a budget as your first step. Sometimes, that’s all you need. (I’m no expert, but that’s what I did to help us get out of debt.) And if you need more help, talk to a financial advisor so you can get a better idea of how to get yourself back on track.
Christina Piccoli is a mom, writer, serial side hustler, Hustling Housewife, and contributor to YourTango. She frequently writes on Substack and Medium and has written several ebooks.
