Money Mistakes By Decade

Money Mistakes By Decade

Money Mistakes By Decade

Hello $wanigans! As always, thanks for stopping by The Green Swan. I’ve been a big fan of podcasts in the last year or so and follow a number of good ones. Just a few weeks ago I was listening to one from the Wall Street Journal titled Biggest Money Mistakes We Make, By Decades. This podcast was actually just a discussion about an article that was recently published on the WSJ online which does go into a little more detail than the podcast if you were interested in checking it out.

This podcast and article are actually very timely as I was in the process of writing a blog post anyway on my biggest money mistakes and regrets. So I thought it would be interesting to share with everyone an overview of the WSJ findings along with my commentary and then also share a follow up post on Monday detailing my money mistakes and regrets. As always, I hope you jump in and share your thoughts and money mistakes (if you’ve ever made any 😉 ) in the comments below.

So without further ado, let’s talk about the biggest money mistakes folks make in each decade of life!

The 20s

Folks in their 20s today are largely dominated by the millennial generation. For the record, I too am a millennial even though I’ve now eclipsed into the 30s category as Lucy kindly pointed out recently.

What the WSJ found in this life stage is that folks are generally playing it too safe. After being scarred by 9/11 in their early years and the 2008 financial crisis when in high school or college, people in this age group are timid with making risky bets with their investments. Investment portfolios have been constructed so safe by this cohort that they align more with the suggested portfolio of someone who is already retired!

This is in stark contrast with the general recommendation that this is the age to actually take more risk with the portfolio given the long investment time horizon before retiring. Shame on folks in their 20s! But if you’ve been an active reader of The Green Swan in the last few months, you knew this already given my post on millennials investing

Another finding, which is scary, is that this cohort is not very financial literate as compared to the past. Yikes! The author wasn’t holding any punches! But this too we already knew since I let everyone know that financial literacy is my cash cow.

So in conclusion, folks in their 20s aren’t financially literate and have a hard time making independent decisions because they fear mistakes. This, therefore, has led to apprehension with retirement saving.

The 30s

Ah the 30s! Home to yours truly as well as my wife. While she is 7 months younger than me and loves to remind me of this fact, at least she is now in her 30s as well and we can commiserate together!

This generation has the feeling of becoming “real” adults…uh thank you very much…but with kids in the picture more as well as investing in real estate and buying a home, they become cash strapped. This is in spite of earning more at work.

This cohort lives in the fantasy of their parents’ lifestyle back when they were just leaving their household. Expecting that quality of life for themselves, even though they are a couple decades behind their parents at that stage, they are looking for the large home and fancy vacations for themselves. As a result, they miss out on saving enough and instead rack-up a lot of debt.

The 40s

Are you over the hill? If you are in your 40s, you are part of the “sandwich” generation which has become more prevalent than first thought. For those unaware of this concept like myself prior to listening to the podcast, this means folks in their 40s are sandwiched with the costs associate with kids (i.e. education and other costs) as well as older parents (i.e. medical care).

The mistake made for these folks is not having a plan for retirement and, more stunningly, taking withdrawals from retirement accounts early to cover “sandwich” costs.

Another common mistake is mishandling of mortgage debt, buying too much house and becoming “house poor” since they are caught up with the materialistic suburban lifestyle.

Side note here from the Swan…get over the lifestyle people, please. I’m tired of hearing of this bullshit excuse for not saving. Wake up and smell the coffee already…Do some soul searching, find out what you want and need in this life and develop a plan. Materialism is overrated. If you haven’t already, you should check out my recent post on my move toward a more minimalistic lifestyle.

The 50s

Into your 50s? This group’s biggest mistake is waking up and realizing they don’t have enough to get through the rest of their life and having difficulty catching up. To me, this cohort’s mistakes are maybe the biggest because they don’t have much time left before traditional retirement age. They can find themselves in a big hole without a rope ladder to climb their way out.

This mistake is in part due to the demographic changes where folks are living longer these days than in generations past, meaning they need more invested to get them through.

The solution this group sometimes tries to reach for, which can just ultimately end up backfiring, is making more risky investment decisions to catch up quickly.

This group is also defined by the getting the entrepreneurial bug which has become more common than historically. The idea is that the business will be able to bring in more cash and last through retirement.

Although I’m in my 30s, I find myself relating to this in some sense. I too am on the doorstep of retirement (really early retirement obviously) and recently invested a good chunk of change into a small business venture with my brothers which I’ve referred to in the past as [The Green Condor] and you can find my latest updated on [clearing growth hurdles]. Part of the reason I made this investment is the anticipated higher returns that investing in small businesses can offer. Granted, for me, if it backfires I still have plenty of time to earn more money and still retire early.

One of the suggestions from the podcast was to delay withdrawals from social security if you feel cash crunched at this stage in your life. Waiting to withdraw until you reach age 70 rather than 62 can result in benefits that are 76% higher.

The 60s and Beyond

The primary issue impacting this cohort is not beginning to delegate responsibilities related to savings and other realms of finance. Per the article, peak financial decision making age is 53 and it declines 1% per year after that. Therefore, it is important to begin delegating these decisions earlier rather than later.

This issue wasn’t necessarily on my radar, although obviously I still have a couple decades to worry about this. But it definitely is something to think about when entering the 50s.


I thought this podcast and related article were very interesting. As I reflect on the various issues though, I find one thing that permeated throughout. And that’s the thought that if you get it right early, in your 20s or early 30s, it can help alleviate most all the other problems folks experience decade after decade.

If you get it right in your 20s, invest early, develop good personal finance habits and take prudent risks, it’ll provide you the platform to manage finances the rest of your life and maintain a solid investment portfolio. It’ll make the 30s easier when you start having kids and buy a home, it’ll make the 40s easier when handling education costs for your kids and will help keep you grounded when tempted by our materialistic culture, you’ll have no problem in your 50s as your nest egg has had plenty of time to compound already, and you’ll be setup in your 60s to begin retirement comfortably.

Wow, huh? If your personal finances aren’t in order, what better motivation to get it right early and fix the problem ASAP? It’s always better to learn from someone else’s mistakes and avoid them for yourself!

Your thoughts?

Where do you fit in to the above categorization and have you made any of these common mistakes? I know I can relate…but more to come on that in the follow-up post.

Thanks for taking a look!

The Green Swan









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  1. I’m in the 30’s group (although mid-30’s rather than early 30’s like you), and fortunately I haven’t made those money mistakes. I do have kids and a house, and we go on vacations, but we have no debt except the mortgage and substantial savings/investments. I prefer to “live like no one else so you can live like no one else.” I got this house 10 years ago and we only go on vacations we can pay for in full. But then again I became a “real” adult in my 20’s – I bought a condo, got married, and started having kids in my early 20’s. So I’ve had plenty of time to adjust.

    1. Sounds like you’ve been doing it right, CMO. I think vacations are great but borderline reckless if they are finance. We too only take vacations we can afford. Thanks so much for sharing!

  2. Great post – and coming from someone who is “older” than many of you, a lot of it is true. I “got it right” in my 20’s somewhat by accident but also by modeling from my parents and older brother. I got a good job with great benefits a month after graduating from college and started saving for retirement (unfortunately with very high costs…) But it set a good path. I bought a foreclosure and rented it out – and just bought “enough” house in a great neighborhood. We’ll sell that next summer – and pay down a small apartment complex mortgage to really grow our wealth when we downsize into that original foreclosure. It’s all come full circle from good decisions made young. Now to get my son on board with doing college with no loans…

    1. It makes a world of difference making a couple key decisions right when young and developing those positive habits. I can see how that would really help you folks as you’ve retired early. Thanks for sharing, Vicki!

  3. I too fall into the 30s group and the mid 30s at that. That being said in my case I already have the life of my parents in many ways materially and live frugally. Sadly my parents were poor with money and with the exception of the saving grace of pensions and social securtity never succeeded in building on their successes. This comes back to your point of building from the start. If your behind when leaving your 20s then not only do you have to be frugal in your thirties to stay on track but you have to do even more to make up for the missed 20s. The need goes up the more you wait due to compounding. My parents were behind entering their 30s. I was and still am way ahead, and thanks to compounding it gets easier the more ahead I am.

    1. I agree, that was my big takeaway from the Podcast that getting it right in your 20s likely leads too success thereafter. Good for you on getting ahead! Thanks for sharing, FTF!

  4. We are in the second half of the 30’s, creeping up to the 40’s. Made all the classic mistakes while in our 20’s/early 30’s (big house, fancy car, motorcycle, toys, most primarily Mr. CF’s faults….). Albeit to be honest, we both studied through the first half of our 20’s (both have MSc’s degrees). So had no money at all! But since finding the path to FIRE, albeit a bit late, are on our way to get their by our early to mid 40’s. Still in time to enjoy FIRE for a long time in our lives.
    Nice write up, got some MMM badass flare to it.

    1. Good for you folks for correcting the cycle early! Impressive turnaround and still a very solid planned FIRE date in your 40s.

      Haha thanks for the comparison to MMM, he’s the man!

  5. I’m at the end of the 30’s, and this has been an excellent decade for me, financially and personally.

    My 20’s however, eeesh… I did invest in a 401k and got it up to ~$12k (I was only making $40k then) but when I left that company to go to grad school, I cashed it out. Yep, cashed it out, penalties, taxes and all… My reasoning was that I’d invested $7k, made $5k and even with penalties and taexs still came out ahead from my beginning $7k. Yes, I totally discounted the growth factor if I’d just left it alone or rolled it into an IRA. Lessons learned. That and “don’t subsidize overspending with credit” that was a rough one too. Man, do I have some great stories from that time period though. 🙂

    The 30’s were great though. When we, Mrs. SSC and I, got our O&G jobs (at 31 both starting second careers) fortunately/unfortunately, my student loans and credit card debt from my 20’s had us focused towards paying that off. While our spending increased because we could, we didn’t increase our lifestyle per se with a massive house, expensive cars, boats and more. It wasn’t from a lack of trying on my part, but fortunately Mrs. SSC kept it reigned in. 🙂

    After those loans and debts were paid off, we were used to living on less, so we/she just switched that to investments. Since then we’ve just been saving more and more and have the kids college good to go even if we stop contributing in 2-3 more years, since that’s the plan.

    Looking forward to being able to retire in the early 40’s and look for some entrepreneurial side hustle for lack of better term. 🙂

    Nice review and commentary on the podcast. I’m looking forward to reading Monday’s post!

    1. Similar to Team CF above, kudos to you and Mrs SSC for the solid turnaround. And I bet you do have some good stories! 🙂

      Quite a story, thanks so much for sharing. You’ll be putting your kids in a great spot by helping them out with college and you’ll also be able to share some of the valuable finance lessons you learned in your 20s so they don’t make similar mistakes. Don’t underestimate the value in that!

      Thanks again, Mr SSC!

  6. My biggest financial mistake in my early twenties was probably going to law school. I had managed to graduate undergrad with minimal debt, but then went straight through to an expensive law school with tuition, books, and living expenses paid entirely with loans. That said, I turned around and spent the second half of my twenties getting on track, keeping expenses down, and investing. You are definitely right that if you get it right early, then everything else becomes easier. I’m glad that I discovered the personal finance blogosphere in my twenties so that I could set myself up to avoid the pitfalls of other decades.

    1. Great work, Matt! Although would you consider law school your biggest mistake if it eventually paid for itself and helped you earn a high paying career? Going back to school for my M.B.A was a bit of a setback as well but I wouldn’t characterize it as a mistake as I partially credit it for helping to advance my career.

      Thanks for sharing, Matt!

  7. I’m in my 20s, and it’s funny that we’re characterized as being too timid! But it does make sense, since many of us don’t have capital to throw around. It does feel like financial literacy isn’t a priority with our generation, but I hope that trend will change as it becomes “cooler” to save money.

    Fellow 20-somethings, please start saving for retirement! I contribute $200 a month to my IRA. I’m not maxing it out because, to be honest, I can’t afford to, but it’s better to contribute SOMETHING instead of nothing altogether.

    1. That’s a great mindset, Mrs Picky Pincher, and that’s great you are at least contributing something and getting that ball rolling. And hopefully you’ll be able to improve on your contribution level each year. Sounds like you’ve done well starting positive habits early!

      Thanks so much for sharing!

  8. We look back a decade ago and how a sizeable stock option grant from Mrs. PIE company was invested in the market only to see it crash by about 40%. No, we did not let it enjoy the ride back up. We pulled it from the market. Classic f*** up! Still we did keep on maxing out both 401k’s since we started them nearly 18 years ago. So there is always good and bad to look back on……

    1. Oh bummer! Well hindsight is always 20/20, but you live and you learn. That’s pretty solid work maxing out your 401k for 18 years though!

      Thanks for sharing, Mr Pie.

  9. As a guy still in his 20s (nearing 30 though…), my biggest mistake was taking too long to get started and being financially illiterate. I opened up a Roth IRA when I was 19 years old or so, then did absolutely nothing with it for a decade. Instead of having a decade long investing history, I instead have only been investing for the past 3 years. I’m happy with where I am, but I could’ve been much better off.

    Best advice for anyone young is to just figure out a way to take some of that money and get yourself started saving and investing.

    1. I’d look at it half glass full though, while you say on the IRA for a while at least you got back on track. Not many can say that and all while you’re still young. Sounds like one decade of mistakes will lead to the next many decades of success, so good for you.

      Thanks for sharing, Panther!

  10. I just turned 30 in July and my wife trails me a few years. I will admit that I was hesitant to invest more than 10% immediately after the 2008 drop (the same year I graduated college). My bosses told me that was the time to buy. They were right. Of course, it wasn’t all a wasted opportunity as I paid off my student loans in 3 years.

    Our only debt now is a house that will take 6 or 7 years to payoff at our current income level. We have decided we do not need a McMansion or fancy vacations. We do want to spoil our children some, but, it doesn’t mean we have to go on a Disney cruise, etc. every year to do so.

    1. Good for you folks, Josh. Sounds like you are on a great path. And I agree, kids are our number one priority to make sure they have a great childhood and an upbringing that sets them up to be successful adults.

      Thanks for sharing!

  11. Nice summary of what can go wrong and people can get wrong. Despite being in my early 40s I’m not feeling over the hill yet, haha. 🙂
    I have the same concerns about some millennials. When you’re young you should load up on high-risk-high-return assets because you got so many years to recover from potential losses in the short-term. Even for the older millennials who were working already during the 2008/9 mess, they couldn’t have lost more than a few thousand dollars in their 401(k). Amazing how that can scare some folks so much to not invest in equities again. Sounds like the “myopical” generation. Well, since we are all retiring early, someone has to make up for us and work longer, right? 😉

    1. Yeah I guess that’s one way to look at it, haha.

      I may be an outlier, but as one of the “older millennials” I can say I lost a solid five figure sum in the 2008 recession and it did take quite a bit of fortitude to stay invested. I specifically remember a few conversations with my older brother who fortunately walked me back and convinced me to stay in. But yes, most probably just lost a few grand which was easily overcome.

      Thanks for the comment, ERN!

  12. While I’m clearly not in my 20s anymore and I’m married with a kid. I still think of myself as 25 and have a hard time believing that I’m a real adult. I’m sure my wife from time to time will say I definitely don’t act it. Unfortunately I am closer to 40 than I am 25 now.

    The advantage though is that I’m much smarter than in my 20s and luckily, financially I am on the right path even based off those mistakes. I wonder if the 20 somethings are too scared of the 2007-2009 market drop and that will affect them far too long with investments.

    I guess we’ll see. Thanks for sharing!!!

    1. Haha I think your wife and mine would get along well. While we have just one kid right now, she often tells me she’s responsible for two! It’s hard for me to feel like a real adult too.

      Thanks for the comment, Mustard Seed!

  13. I just read the WSJ article today and thought it would make for a good blog post. I found it interesting about the millennials in their 20s being too conservative, and one of the main reasons being they don’t know anything about investing or personal finance. It’s a shame we don’t teach them this in school. We make sure they learn about the Spanish Inquisition, but we don’t teach them how to be an adult and handle money. This is something that should really be added to the curriculum in high school and should be a required gen ed in college.

    1. I completely agree and think those are great ideas. People need to be prepared for the real world and a few additions to our education system would be well served. Thanks for the comment!

  14. Nice post! I think the WSJ assessment of the 20’s category is pretty accurate haha. I know a lot of people who aren’t financially literate and have never owned a stock or index/ETF before. I think that’s crazy! The earlier you start investing and becoming financially responsible, the more benefits you’ll reap. Unfortunately, I fall within the 20’s category haha, but I consider myself to be financially literate.

    1. Good for you, Andrew. I’d consider myself pretty financially literate when I was in my 20s too. Personal finance has always been a topic of interest for me.

      Thanks for sharing!

  15. No one makes it through life without any financial mistakes. The best thing anyone can do is evaluate their own situation and create a plan with whatever that is that works for them best.

    One huge advantage the younger generations have (that we all benefit from) is open communication. Not long ago finances was very personal, very private. So it was hard to learn from others. Even reading through these comments, there are so many millenials exchanging thoughts and ideas. Hopefully all of this sharing and learning is making these issues less severe and widespread so we can all feel more confident facing whatever comes in our future

    1. Yes it is and I know I could have made better decisions too. Just like everything in life, we must live and learn and try our best to make the best and well educated decisions we can.

      And you’re right on about access to info these days. That’s the power of the internet, huh!? Good point and hopefully we can all take advantage of the shared knowledge.

      Thanks for the great comment, Penny!

  16. I’m in the “over the hill” category. 🙂 At this point I’m not sandwiched, as both sets of parents are independent and financially sound. That could all change over the coming decade or so, though.

    We made a ton of mistakes in our 20s and 30s but, thankfully, we did start investing some money into the 401k in our 20s. We also had student and auto loans for several years and bought a house too soon. In hindsight, we should have done some things differently, but I’m grateful we figured it out and never got in over our heads.

  17. That tip about financial literacy in your 20’s is (to me) by far the most important. Learning what to do with money and how to handle it for the rest of your life is an investment that pays dividends forever.

  18. We’re in the 40’s and made all of the mistakes mentioned there. It took us until our early forties to wake up and smell the coffee, but we’re living proof that change can make the difference even if you start late. We’re now certain to have enough for retirement and are well on our way to debt freedom.

  19. Being in my mid 20s and reading this article gives me hope. Since my financials are still not growing at a “good” pace. But time is on my side and I shall remember that. Although I feel that regardless of your age, the best time to start investing was yesterday. The 2nd best time is right now, so let’s all get started! Our mistakes only makes us wiser.

  20. Great post Green Swan! I did make a big mistake of buying an expensive vehicle in my early 30’s, when my wife and I really couldn’t afford it. On a positive note though, we’ve never spent more than $130,000 on a home, so we’ve never been house poor. Very thankful for that! I just graduated to my 40’s last year, but my wife has got a few years before joining me! 🙂

  21. Such a great post! I am in my mid 30s and only recently became motivated to retire early. I never thought early retirement was a possibility until I stumbled upon a few blogs about the subject and realized it was an option. That said, I was glad to read this list and find I haven’t made any of the mistakes yet. And now I know what they, I can avoid them in my 40’s and beyond! I’ve been lucky in that I was raised to be very frugal, so have been able to sock away a good amount of savings. I do live in a high cost of living area, so I have a larger mortgage than I would like, but it is well within what I can afford. I also plan to have it paid off in 15 years. I recently started a blog and am looking forward to seeing it blossom in the next few years (with a ton of hard work of course) and hopefully provide a supplement to my early retirement.

    1. That’s great, Danielle. Sounds like we have a number of similarities! I look forward to checking out your blog and wish you the best of luck.

      Thanks for stopping by and sharing!

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