The 7 Worst Money Trends (By AGE!)

Join the community built to help you master your money, stay accountable, and reach financial freedom. 👉 Join Master Money Academy today! In this episode of The Personal Finance Podcast, Andrew breaks down the seven worst money trends destroying wealth in every decade,from sports betting and Buy Now Pay Later debt in your 20s, to becoming house poor and delaying investing in your 30s, lifestyle inflation and ignoring tax planning in your 40s, and carrying debt into retirement in your 50s, revealing the data-backed mistakes sabotaging financial progress at every age. Listen to The Business Show here. Join The Master Money Newsletter where you will become smarter with your money in 5 minutes or less per week Here! Partner Deals Indeed: Start hiring NOW with a SEVENTY-FIVE DOLLAR SPONSORED JOB CREDIT to upgrade your job post at Indeed.com/personalfinance Get 50% Off Monarch, the all-in-one financial tool at www.monarch.com/PFP Chime: Start your credit journey with Chime. Sign-up takes only two minutes and doesn’t affect your credit score. Get started at chime.com/ Policy Genius: Go to policygenius.com to get your free life insurance quote. Shopify: Shopify makes it so easy to sell. Sign up for a one-dollar-per-month trial period at shopify.com/pfp Wayfair: Shop outdoor furniture, grills, lawn games, and WAY more for WAY less DeleteMe: Go to https://joindeleteme.com/PFP20/ and Use Promo Code PFP for 20% off! Resources Mentioned Here is the Total Cost of Ownership Calculator Connect With Andrew on Social Media: Instagram TikTok Twitter Master Money Website Master Money Youtube Channel The Master Money Newsletter Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Andrew Giancola?

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• 0:44Andrew Giancola?

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• 1:17Speaker 01

  Wayfair, every style, every home.

• 1:20Andrew Giancola?

  When I started the Personal Finance Podcast, I had no idea how big it could become. I just knew I had something I wanted to share, so I started putting it online. And looking back, I definitely wish I would have started a decade earlier. One of the horror parts about building something online, though, is making it look professional. A website used to mean hiring a developer, figuring out design, and potentially spending thousands of dollars. In fact, on my website, I spent tens of thousands of dollars. That's what impressed me when playing around with Hostinger's AI Website Builder. I told it what kind of website I wanted, and I built the first version in minutes. No coding, no designer or developer needed. And Hostinger doesn't stop at launch.

• 2:04Andrew Giancola?

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• 2:41Andrew Giancola?

  What's up everybody and welcome to the personal finance podcast. I'm your host Andrew, founder of mastermoney.co. And today on the personal finance podcast, we're going to be talking through the seven worst money trends by age. If you guys have any questions, make sure you join the master money newsletter by going to mastermoney.co/newsletter. And don't forget to follow us on Apple Podcasts, Spotify, YouTube, or whatever podcast player you love listening to podcasts on. And if you want to help out the show, consider leaving a five star rating and review on Apple Podcasts, Spotify, or your favorite podcast player. Now today, we're going to be diving into the seven worst money trends by age. And the goal of this

• 3:22Andrew Giancola?

  episode is for you to figure out what you should be avoiding. There are a lot of money trends out there that are not good for your long-term financial health, and we're going to dive into each and every single one. So we're going to be going through the 20s, the 30s, the 40s, and the 50s to talk through some of these money trends that you must avoid. And so I'm going to quit yap and we're going to dive right into this. So without further ado, let's get into it.

• 3:49Andrew Giancola?

  Now, number one is sports gambling as a side hustle. Now, I am seeing a rise in sports gambling across the entire country where I'm a big sports fan. I love football. I love basketball. I love watching, you know, playoff baseball. I love watching all sports. And so I will spend a lot of my Sundays watching football, watching my favorite team, the Tampa Bay Buccaneers. I'll spend Saturdays watching college football. I'll spend a lot of time watching sports. And I've been playing sports my entire life, and I have loved sports for my entire life. And so a lot of my friends also watch sports. And so A lot of people surrounding me are doing a lot more sports betting than maybe they should. And so I've seen the rise in sports betting across the entire country and across specifically a lot of young men who are out there spending a lot of their hard earned dollars on sports betting.

• 4:34Andrew Giancola?

  Now, the psychology behind this is something that is very interesting because sometimes people can get a couple of different wins and they feel really, really good, like they can actually hit it big by sports betting. In fact, one in five young men now sports bet weekly, which there is nothing wrong honestly with sports betting. If you are doing it in small increments, maybe a small portion of your income. But if you're using a large portion of your money to bet, that is where it's going to be a much bigger problem. Whereas the average better loses about seven to 15% over time. And the fascinating thing is that the typical 20 something is losing $1,200 every single year. Now, listen, I get it. You're watching a game and you want to bet $5 on the game because it makes it more entertaining or more interesting for you.

• 5:19Andrew Giancola?

  I completely understand that. That is not something I would ever say, hey, don't go out and do that. But if you start to spend or lose control and you don't have parameters set when you are sports betting, that is where the problem comes into play. So for example, I am not going to be someone who says don't sports bet when I do it myself, but I bet very small amounts of money. In fact, most of my bets are right around $5. And so when I do it, it's usually when I'm watching a game, but it's a very, very small bet. Now let me explain how I did this because I set up very specific rules so that this never ever gets out of control. And so you say to yourself, okay, the maximum amount that I will ever bet is X amount of dollars. And when you say that to yourself, you cannot break that rule. Maybe you think a bet's going to be perfect and you're going to hit it big.

• 6:04Andrew Giancola?

  Do not break the rule. Maybe you think, you know, a parlay with you and your friends is going to be absolutely amazing. No, do not break that rule because instead if you learn how to do this with very small increments, then you don't have to miss out on anything. It's the folks out there who take larger and larger bets are the ones that are going to lose money. See, the house always has the edge. And so when you understand the math behind this, you understand that you are never going to come out on top long term. Now, sure, there are Pro sports betters, they look for edges. They have entire Harvard graduate teams that are helping them trying to find these edges. But for you as the average person, it does not make sense to go out there and sports betting. If you're spending $1,200 per year, but you're not investing in your Roth IRA, my friends, that is a huge problem.

• 6:45Andrew Giancola?

  Do not bet your $1,200. Put it into something that can grow over time, that can help you retire. That is the big key overall. So if you're maxing out your accounts, if you're hitting all your financial goals, then sure, go ahead and take a very small portion of your income and put it towards some sports bets for some entertainment. Just treat it as entertainment, part of your entertainment budget. But if you are someone out there who is not hitting your retirement goals and you are still sports betting, it makes zero sense whatsoever because sports books are engineered to win. That's how they are in business. That's why every single commercial on any sports program is sports betting. And honestly, I think it's a negative decision for most people. So again, make sure you set rules. Make sure you set parameters. That's the way I would think about sports betting.

• 7:26Andrew Giancola?

  Number two is buy now, pay later. And the rise of buy now, pay later is actually astonishing for 20-somethings. Buy now, pay later is up 215% since 2020. And 43% of buy now, pay later users make their payments late. That is one of the most alarming stats. And people spend 20 to 30% more with buy now, pay later than they do with cash or credit. And so because of this, this is an alarming statistic because folks who are in their twenties, 20-somethings are using buy now, pay later at higher rates than anybody else. They're using it to buy their groceries. They are using it for DoorDash. They're using it for so many different things that it is becoming more and more alarming. When essentials go on buy now, pay later,

• 8:08Andrew Giancola?

  that is when a huge problem comes into play. Now, sure, I understand affordability is at an all time low. I get it. But at the same time, taking on buy now, pay later debt on these personal loans is not a good move. Financing lipstick or DoorDash or anything else like that is not an essential. You can cook at home. You can make your meals at home. Financing DoorDash is not something you should ever, ever, ever do. And what this does is this causes micro debt stacking where it feels like you're not taking on too much debt, but all of a sudden this starts to stack up. And when these payments... And start to come in and you have to pay off these specific loans, even if it's 0% financing, all of the sudden, if you can't make those payments, the interest kicks in, you've got yourself a world of problem.

• 8:50Andrew Giancola?

  And I think this is a snowball that is growing more and more every single day. So instead, what I would highly encourage people to do is follow these steps to make sure that you get your finances in order. Because once you get those finances in order, then we can start to make smart money decisions. So we don't have to rely on buy now, pay later. So let's say, for example, that you don't make enough money. Affordability is at an all time low. And so you don't make enough money. Well, if we get a financial plan in place, then we can make smart decisions in order to decide, okay, well, do I need to go take another job so I can increase my income? Do I need to cut back in some areas? Well, if I can't cut back anymore, then maybe I do need to go increase my income. How can I go and do that? But we have to have a plan in place. So we don't rely on things like buy now, pay later. And also, it just destroys budgeting discipline

• 9:35Andrew Giancola?

  because payments are scattered all over the place. And so avoid buy now, pay later at all costs. I don't think anybody should be using buy now, pay later. I think it's a very dangerous game to play. And so hopefully you are trying to avoid it at all costs, especially if you're a wealth builder. Number three is living a luxury lifestyle on a starter income. When I was in my twenties, my first entry level job, I made $30,000 per year. And I know how difficult it can be to try to live on $30,000 per year. And the average 20 something right now with their first job is making between 34 and $38,000 per year. And this is from the Bureau of Labor Statistics. So you may be saying to yourself, well, everybody around me is making so much money. Well, the Bureau of Labor Statistics shows that the average is 34 to $38,000 per year.

• 10:18Andrew Giancola?

  But the average 20 something is also renting apartment between $2,000 and $2,400 every single month. And so they spend nearly 40% of their income on housing. Now, what is our rule when it comes to housing? You need to spend 30% or less of your income on housing. So if you're spending a massive amount of money on housing, this can be a huge, huge problem. When you are overspending early on housing, this means that you were missing out on some of the prime compounding years. So we have a tool called the Wealth Builders Matrix. If you go to mastermoney.co/resources, Sources, you will find the wealth builder's matrix there. And what this does, it shows you exactly how much your dollars are worth based on your age by the time you turn age 65. So for example, if you're a 20 year old, you can look at the wealth builder's matrix and see

• 11:02Andrew Giancola?

  that, oh my goodness, every single dollar that I spend would actually be worth a hundred dollars by the time I'm age 65. And so it's a really cool tool to help you think about it this way. And so when you're spending a ton of extra money on housing, instead of going out and finding ways to reduce your housing cost, that is a huge, huge problem for your long-term wealth building ability. Because again, when you're in your twenties, these dollars are so incredibly valuable. Another thing that I'll say is that if you start with lifestyle creep in your twenties, meaning you have these high expectations, you have these higher priced apartments, you have the nice car. When that happens, your lifestyle is only going to continue to creep up in your thirties and forties. And it becomes so much harder to catch up when you have a luxury lifestyle than when you just live a modest

• 11:46Andrew Giancola?

  lifestyle. Again, I would highly encourage you to read the book, The Millionaire Next Door, which talks about real millionaires and how they actually live their lives. And typically, the average millionaire is someone who lives a modest lifestyle, especially in your twenties. I attribute a lot of my wealth building to being frugal in my twenties, meaning understanding that reducing my costs in my twenties was so incredibly important to get my dollars compounding. So I could take those extra dollars and put them towards wealth building activities. And for everybody in their twenties, that's exactly what I want for you as well. You have the power to absolutely change your financial future and you can do it right now. Number four is crypto as an entire investing plan. So a lot of folks who are in their twenties grew up with the crypto wave that has started to happen

• 12:31Andrew Giancola?

  over the course of the last decade. And so for most of them, they are familiar with crypto and how it works. In fact, 55% of Gen Z investors hold crypto more than stocks and more than index funds. So they actually hold more crypto than stocks and index funds. But only 18% of Gen Z investors actually invest in low-cost index funds. And here's the crazy thing is that crypto volatility can wipe out 50 to 80% of your net worth. Boom. In that specific day, because it is so volatile. It goes up and it goes down. Now, I am not totally against investing in crypto. In fact, I invest in Bitcoin myself, but it is a very small portion of my portfolio. In fact, it is less than 5% of my portfolio is invested in crypto.

• 13:13Andrew Giancola?

  The rest is in low-cost index funds, things like real estate and businesses. Those types of things are the ways that I am looking to grow my portfolio over time. And so for those of you who have a huge portion or a huge weight of your portfolio in crypto, sure, you may have had some fantastic gains thus far, but again, it's a very volatile asset. Whereas I like assets that have intrinsic value, meaning they have financial statements backing them. They have things that back them up over time. And so this is something where having too large of an allocation in crypto or your entire allocation in crypto can be problematic long-term. We have no idea what direction crypto is going to go in. Sure, it is getting more established. We have had episodes talking about how Bitcoin is becoming more established with institutionalization,

• 13:57Andrew Giancola?

  with the government talking more about it. And so there's a lot more great things happening for people out there in the crypto space. But at the same time, having it as a large portion of your investment portfolio or having it as part of your retirement plan is not always the best option. So make sure you do your own research, look at your own risk tolerance. But this is something that I don't think should be the main portion of your portfolio. But again, this is not advice. This is you doing your own research and try to figure out exactly what you want to do. And again, if there are a lot of altcoins, there are a lot of meme coins and additional coins out there that you should not even be interested in whatsoever. In fact, the only crypto that I think is currently stable right now or something that you should be of interest to anybody in a long-term wealth building plan is Bitcoin. There are other ones out there that maybe Ethereum could be a second place,

• 14:42Andrew Giancola?

  but there are other ones out there that a lot of people are putting a lot of dollars into, things like XRP and some of the other meme coins. And that is just not a good, sound financial plan long-term. Number five is not saving anything for retirement. So 72% of people in their twenties save zero for retirement. And this is based on a study done by T. Rowe Price. 72%. They're missing out on their prime wealth building years in their twenties and they save zero for retirement. Even investing $200 per month from age 22 to age 30 equals $470,000 by the age of 65 because compound interest kicks in and your money can work so much harder than you ever can, even if you never invest again.

• 15:23Andrew Giancola?

  Between 22 and 30, $200 per month is almost half a million dollars. And this is why we need to get our dollars invested early. We need to get them invested often. And this is really, really important over this timeframe. In fact, starting at 30 instead of 22 means that you need to save 2.5 times the monthly savings for the same exact outcome as someone who starts from age 22 to age 30. See, your twenties give you the biggest compounding advantage in life. It is one of the most important times to start investing. And the all-star later crowd are the people who usually end up regretting not starting as early as they possibly can. I don't care if it's 50. I don't care if it's a hundred bucks. I don't care if it's 200 bucks, but get as many dollars as you can working for you as early as you possibly can.

• 16:08Andrew Giancola?

  It'll absolutely change your life and you will never regret it. I have never met someone who said, you know, I wish I just didn't invest that money in my twenties. That was a really bad decision. I really wish I would have taken that money and gone out and bought a new Louis Vuitton bag instead. No, every single person is always so thankful that they got started investing early and often. So even those small contributions when you're in your twenties, that's the beautiful thing about being in your twenties, will grow to massive results. Number six is credit card debt. And living off credit cards, in fact, the Gen Z credit card debt has grown 50% since 2021. And the average 20-something carries a $3,000 revolving balance, according to Experian. The most common reasons are dining out, travel and entertainment. So what are dining out, travel and entertainment?

• 16:53Andrew Giancola?

  What are those three things? Those are expenses that are not part of your baseline expenses. So those are discretionary expenses that do not have to be made. But for most folks who go into debt, a lot of times those discretionary expenses are starting to creep up more and more and more. And so we want to make sure that we are understanding where every single dollar is going. Because once you have an understanding of where your money is going, then you can make sound financial decisions. And so a couple of things I would say is number one is do not ever use a credit card unless you have enough cash in the bank to pay off that card at any given time. That's rule number one. Number two is never carry a credit card balance. If you have credit card debt right now, let's go ahead and cut up those cards and let's pay off that credit card debt as fast as we possibly can.

• 17:38Andrew Giancola?

  Credit card debt is the absolute worst thing for your long-term financial health. And so we want to make sure that we get rid of that credit card debt as fast as we can. And then number three, for some people out there, they use their credit card as their emergency fund instead of building one up. So making sure you build up an emergency fund so that when emergencies happen, you have cash on hand and you can remove stress and anxiety from your financial life, those are going to be huge deals for you long-term. And then number seven is constant upgrades. And so 20-somethings upgrade their phone every one to two years on average. And the average 20-something spends $1,500 a year on electronics and $1,800 a year on apparel. Now, this is all from the Bureau of Labor Statistics. And then small purchases can reduce savings rates if you don't have a high savings rate thus far.

• 18:23Andrew Giancola?

  And so this is the death by a thousand cuts method. Now, listen to me, I want you to spend as much as you possibly can on things that you actually value. That is our entire goal here at the Personal Finance Podcast and at Master Money is we want to teach you how to spend properly. But if you spend on things frivolously that you do not care about, it will remove all of the financial backing that you have to be able to go out and buy items that you actually want. And so making sure that you're intentional with the way that you spend your money is one of the most important things. And if you can establish this habit in your twenties, it will carry with you in your thirties and your forties and your fifties. Because let me tell you, in your twenties, if you feel like you're spending too much, it gets a lot harder in your thirties.

• 19:07Andrew Giancola?

  Maybe you're getting married, maybe you're having kids and a lot more things are going to be happening. And so you want to make sure that you Have those sound financial habits in your twenties so that it does not spiral out of control later on in life because if you do not get it fixed right now, this is the time where you can really make a huge dent on your long-term retirement plan because you have so much time for compound interest to work. So these are some of the worst money trends for folks in their twenties and there are a number of different things that you can do to fix them. But overall, if you are doing some of these things, I would try to avoid it at all costs going forward. Now let's jump into the thirties.

• 19:43Andrew Giancola?

  All right. So folks who are in their thirties, let's dive into some of the worst money trends for you all in your thirties. Number one is becoming house poor. More than 38% of Americans in their thirties spent above recommended affordability levels, according to Redfin. Now, this is due to housing affordability being at an all time low, but housing costs have grown nearly 30% faster than wages over the course of the last decade. And the average homeowner under 40 puts less than 5% down when they go and buy a house. Now, one thing I want you to know is buying a home for the maximum amount that you qualify for is not a strategy whatsoever. In fact, if you are buying a house with the maximum amount that you qualify for, you are likely overspending on a home. So we want you spending less than 30% of your income

• 20:26Andrew Giancola?

  on all housing costs put together. So that goes for your rent or mortgage, that goes for any repairs associated with it, any maintenance, all of those different things. We want you spending 30% or less on housing costs. Now, if you've never run total cost of ownership of housing costs, I highly recommend that you check out our total cost of ownership calculator. That is where you can go and compare, A, all the costs associated with owning a house, but B, you can also compare buy versus rent in your area. So it is a great tool to help you think through and run the numbers on buying a house. See, most people go their entire life without running numbers on the biggest purchase that they make, which is their home. And so this tool is free. It's going to allow you to go and find a house utilizing the total cost of

• 21:10Andrew Giancola?

  ownership calculator. So I highly recommend that you check that out because overspending on a home means that you can become house poor if you're spending more than 30% of your income on a home. And that can become a very big problem long-term because it's so much harder to build wealth when you spend more than 30% of your income on a home. So instead, finding ways to reduce those housing costs can be really, really important because it's going to cause financial stress, it's going to cause financial anxiety, and we don't want that for anyone out there. So number two is keeping up with your friends' highlight reels. So 48% of millennials say that social media actually causes them to overspend, according to a study done by Bankrate. So falling into this comparison trap is one of the worst things that you can do. You need to stay in your own lane.

• 21:51Andrew Giancola?

  You need to make your own path and you need to worry about your own financial situation and not what someone else is doing. Just because someone else went on an amazing European trip doesn't mean that you need to go out there, that you're falling behind because you didn't get to go on that. You don't know their financial situation. You don't know what they're going through. They could be $100,000 in debt for all you know. And so when you compare yourself to other people, a lot of times that gets you in sticky situations. Also, the average parent spends over $3,000 per year on child activities.

• 22:23Andrew Giancola?

  I'll tell you what, I probably spend over $500 per year just on Kona Ices alone, let alone child activities that are out there. It is expensive to have extracurricular activities for your kids. And so because this, for parents in their 30s, this is a huge cost center for you. In addition, there's things like daycare, your grocery bills are going to go up. I don't even know what it's like to have a teenager and have to have a grocery bill like that yet. And so this is the type of thing where a lot of folks are spending and/or, some of you may be overspending on child activities. And so making sure that you think about that is really important. Also, Americans in their 30s take more discretionary trips per year than any other decade of their life. Now, one thing I want you to note is that if you have young kids or if you have kids in your life, you only get so much time with them.

• 23:05Andrew Giancola?

  And so I have no problem with you, you know, spending money on vacations and things that you value just like that. But making sure you also hit your retirement goals at the same time is very, very important. And so you gotta hit your retirement goals, then you could do whatever you want after that. That is the key component here, making sure that we are first hitting those retirement goals, especially in our 30s when the time is now ticking. Number three, and this is a disturbing trend that I am seeing across the board, is delaying investing until things calm down. Now, this is something where 2/3 of people in their 30s actually aren't on track for retirement, according to Charles Schwab. And so, we want to make sure that we help change this metric and help change this number. If you wait until age 35 to start, instead of starting at age 30,

• 23:49Andrew Giancola?

  this can cost you over a half a million dollars if you are investing over that timeframe. And 45% of people who are in their 30s say that life is just too busy, and that is the reason why they haven't started investing. And so, there's a number of different things to say on this. But number one, the biggest key component overall is to make sure that you are investing. Then, once you do that, automating your investing means that you don't have to worry about investing whatsoever. And so, when you learn to automate your money, you don't have to spend a ton of time investing. It's just going to automatically happen every single month. You don't want to have any more delays. You've got to buckle down and get started today because the longer you wait, the harder it gets. And so, I want every single person to get started investing as soon as they possibly can. So, number four is not protecting your income.

• 24:32Andrew Giancola?

  So, a lot of folks in their 30s, they have more people who depend on them. Maybe you are married, maybe you have kids. And if you don't protect your income, that is one of the most important things that you can do. 1 in 4 people will suffer a disability lasting longer than 90 days. Yet, only 14% of millennials actually have disability insurance. And nearly 60% of families with kids have no life insurance or little to no coverage. And so, this is something where you need to learn how to protect yourself. If your family would go through a hardship if they lost your income, then disability insurance is something that you need to look into, and you need to do some additional research. Now, making sure you do your research and understanding how this works is very, very important. One accident or illness could derail your entire financial life. So, you have two options.

• 25:16Andrew Giancola?

  You can have disability insurance and pair that with an emergency fund, and/or you can have a larger emergency fund without having to pay for disability insurance. But both of those are really, really important to think through. Insurance is not exciting, but it is one of those things we have to talk about. Secondly is life insurance. So, going out and getting term life insurance is by far the cheapest option. You can get up to a million bucks policy for right around 35, 40 bucks with Policy Genius. And so that is a great way to just make sure you are protected. If somebody depends on your income, you need to have term life insurance. And the way the term life insurance works is that it works for a specific term. So let's say you're 35 and you want to buy a policy from 35 to 59. Well, if you wanted to do that, you would have that policy for those 24 years over that timeframe.

• 26:00Andrew Giancola?

  And then after that, the goal is to make sure that you have enough in retirement. So you don't need that term life insurance policy anymore. So that's why it's so cheap because it only lasts for a certain term. And it gives you coverage if anything were to happen to you. My wife and I just increased our life insurance policies. This year, it was one of the big things that we wanted to do because we had another child. And so we made the adjustment to increase those life insurance policies through Policy Genius. This is something that you must do, especially if you have people who depend on your income. Number five is letting kids' costs explode without any boundaries whatsoever. So the cost to raise a child has gone up to $20,000 per year, according to Bankrate. And youth sports alone, as we have talked about, are ranging on average from $3,000 per year. But there are some folks out there who are spending $10,000 plus on youth sports.

• 26:45Andrew Giancola?

  And it's gotten completely out of control. And 72% of parents say they overspend on child activities. And that is the reason why they're not saving for retirement. So let me give you a couple of examples here. Number one is you need to make sure that your retirement comes before some of these child activities. And so if you're overspending, if you're one of those folks who are spending $10,000 per year, but you're not saving for retirement, you have your priorities all completely mixed up. Because as time goes on, the memories of those child sports activities are going to fade. But what's going to happen is you're not going to have any money in retirement and your kids are going to have to take care of you. That is not a situation that you want to be in whatsoever. And so understanding how to make some of these adjustments is very, very important. So if it is discretionary spending, things outside of daycare and stuff like that,

• 27:30Andrew Giancola?

  if it's discretionary spending, just make sure you have it under control. You know how much you're spending every single year. Because if you do overspend in these categories, but you don't save for retirement, which I know way too many people that do this, it is going to be a long-term problem. Number six, and this is a big one, staying in underpaid jobs instead of growing your income. So your peak Earning growth years are your 30s and 40s and you want to make sure that you can earn as much as you possibly can and switching jobs typically on average results in an 8% to 13% increase in your wages and often most people who stay in the same exact job usually get anywhere between a 2 to 4% raise and so being loyal to your company doesn't always pay off. You've got to make sure that you are thinking about your income if you are at the right income

• 28:14Andrew Giancola?

  for your specific job. Now millennials stay in jobs longer than Gen Z. I think Gen Z is more used to switching jobs where millennials stay a little more loyal than Gen Z does and people who change companies every two to three years earn 50% more per decade on average. Think about that for a second. So loyalty is not helping you whatsoever and people who change every two to three years earn 50% more per decade. That is a massive, massive number because your earning power is one of the most important levers that you have to pull. And when you look at this, you're going to see a dramatic impact on your long-term wealth building depending on how much money you make. Think about this for a second. If you make $50,000 per year and then over the course of the next decade, now you make $75,000 per year, but you still live on that $50,000 per

• 28:59Andrew Giancola?

  year, you have $25,000 per year that you could put towards investments and wealth building. Now, this is very powerful and is going to allow you long-term to absolutely change your financial trajectory. And so I really want you to understand that your income is the catalyst to help you build wealth. You can only cut back so much, but you can grow your income exponentially. And so when you do this, this is going to help you reach all of your financial goals. So focus on your income, focus on growing your income. That is the key. Don't stay loyal to companies if they're not willing to pay you more. Now, if they are willing to pay you more, that's fantastic, but if they're not, make sure that you are looking for other options. And the number seven is overspending on the big three. So a lot of folks in their 30s, they're overspending on homes, they're overspending on cars, and they're overspending on food. And those are the three

• 29:44Andrew Giancola?

  areas eating out those types of things. And those are the three areas that if you can control those three expenses and you can control housing, transportation, and food, that will be the big, big difference maker for most people. Because once you do that, if you control those three, you'll be able to spend a lot more in other areas. So folks in your 30s, make sure you're focusing on these. I know it is very difficult in your 30s. You've got a lot of things pulling you in a lot of different directions, but learning to have a plan in place, learning how to build wealth is one of the most important things that you can do.

• 30:16Andrew Giancola?

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• 30:59Andrew Giancola?

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• 31:42Andrew Giancola?

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• 32:25Andrew Giancola?

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• 33:10Andrew Giancola?

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• 33:47Andrew Giancola?

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• 34:31Andrew Giancola?

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• 35:14Andrew Giancola?

  Indeed on this podcast. Indeed.com/podcast. Terms and conditions apply. Need to hire? This is a job for Indeed sponsored jobs. If you want to finally master your money and build wealth with confidence, then you're going to love Master Money Academy. This is the membership that I created to give you a step-by-step roadmap to get your financial life completely organized and working for you. So inside Master Money Academy, you're going to get the full roadmap that takes you from zero to financial independence, plus video lessons, worksheets, calculators, deep dive trainings, in addition to weekly coaching calls with me. You're going to learn how to automate your money, invest long-term, negotiate your salary with no guesswork or overwhelm. And you'll get access to our private community of wealth builders where you can ask questions,

• 35:57Andrew Giancola?

  get clarity, and surround yourself with other people who are building wealth. One of my favorite parts about Master Money Academy is we have these things called Master Money Masterminds, where it's people who get together who are working on a common goal, and they help support each other, and they help learn from each other. So if you've been wanting a simple system, a clear plan, and support from a community that actually cares, join us inside Master Money Academy. Click the link below to get started at Master Money Academy, and I can't wait to meet you inside.

• 36:27Andrew Giancola?

  All right, so let's look at the trends for your 40s. Number one is massive lifestyle inflation. So household spending actually peaks between age 45 to 54. And people in their 40s increased their spending about 20 to 40% than they did in their 30s. And this can be a number of different reasons, but only 44% of Americans in their 40s say they could cover a $1,000 emergency fund. And so higher income levels often leads to higher inflation costs. So as your income rises, a lot of people are also increasing how much they are spending every single year. And so because of this, this is called lifestyle inflation. And so what you want to do is try to control this lifestyle inflation and be very conscious when you go and think about increasing spending.

• 37:09Andrew Giancola?

  If you get a raise or a bonus, make sure you're using the 50/50 rule, meaning spending 50% on things that you actually value and then saving 50%. This is going to help reduce lifestyle inflation and make sure you have extra dollars going towards wealth building. Number two is not catching up on retirement savings. So the median retirement balance for people in their 40s is $89,000. Now, this is according to Fidelity, and that is not even remotely close enough to where you need to be in your 40s. But by 40, most experts suggest you should have two to three times your salary saved. And so starting to catch up at 45 requires two to three times the monthly investment compared to at age 32. And so for most people in their 40s, I want you to understand this right now. It is never too late to get started investing, but you have to get started right now.

• 37:54Andrew Giancola?

  Even if you've fallen somewhat behind, you can still catch up. Your 40s are a prime time to set up the runway for retirement so that you can get to your 50s, save aggressively, and then retire in your 50s or 60s. And so if you are someone in your 40s, it is never too late. You can increase your savings rate, but you have to be intentional about where you're spending your dollars and you have to increase that savings rate over that timeframe. Number three is ignoring tax planning. So, less than 20% of people in their 40s use HSAs or health savings accounts, despite them being the most tax-efficient account in America. So, obviously, some people can't utilize them because they don't have a high deductible health plan, but they are really great retirement accounts. And only 3% of eligible households attempt Roth conversions.

• 38:37Andrew Giancola?

  Plus, the average investor pays $1,700 a year more in taxes than necessary, simply due to poor account selection. And so, understanding the role of retirement accounts when it comes to tax planning is really, really important, because once you choose the right accounts, that will absolutely change your long-term trajectory and your tax situation. So, in understanding those accounts and understanding which ones to invest in is really, really important, especially in your 40s. Now, number four is ignoring health until it becomes a financial crisis. Now, this is something where health problems begin to rise at age 45. And so, we want to make sure we are taking care of our health as early as possible. Why? Healthcare costs are a massive, massive thing that are going to be rising every single year.

• 39:19Andrew Giancola?

  In fact, the average inflation rate in healthcare has been 7% over the course of the last five years. And so, we want to make sure that we are taking care of our health, because this is going to be a huge cost down the line. Poor health can become expensive fast. So, making sure you're getting your exercise in every single week, making sure your diet is dialing in, those are all very important to make sure that you're optimizing your health strategy. Number five is funding kids over funding retirement. So, here at the Personal Finance Podcast, we want you to follow the oxygen mask method, meaning you take care of your own retirement first, and then you can help others. So, when a plane is going down, you put on your own oxygen mask first, then you can help other people. Well, the same goes for your money. But most people do the opposite, and I get it. You want to help out your kids as early as possible.

• 40:01Andrew Giancola?

  But 63% of parents say they would go into debt for children's activities. That is one big thing that we have talked about this entire episode as a big no-no. We do not want you going into debt for child activities. And 70% say they are saving for their kid's college is more important than saving for retirement. Absolutely not. And I get that most people think they need to prioritize that first. You want to put your kids first, but you need to make sure you're taking care of your retirement first. There are no loans for retirement. And your kids are going to be taking care of you if you don't take care of your own retirement. That's the last thing that you want to do. Yet only 25% of kids actually graduate college debt free. And so this is something where we have poor spending habits coming into play and we do not plan accordingly.

• 40:43Andrew Giancola?

  So making sure that you put your retirement over child activities, especially college savings is very, very important. Number six is holding too much cash for too little growth. So the amount of cash that we want you to hold typically is about six months of expenses in a high yield savings account. And for people in their 40s, they hold three times more cash than recommended by most people. And so when they held all this cash, it means they don't get the maximum amount of growth over that timeframe. And so just having a cash management plan can be really, really important. And then number seven, and this is a big one that I think more people need to have conversations about, but they have no plan for aging parents. In fact, 53% of adults in their 40s are part of the sandwich generation, meaning they're supporting their kids and they're supporting aging parents at the same time.

• 41:25Andrew Giancola?

  And nearly 62% of caregivers give financial support to their parents. Now that is a heavy burden to hold where you have to take care of your kids, but you also have to give financial support to your parents. This is what I'm talking about where you need to start investing now so you don't become the parent that needs that financial support. And the average out of pocket cost for those who are helping their aging parents is between $7,000 to $10,000 per year. And so without planning, elder care can become a sudden and big financial burden. And long-term planning should definitely begin before this crisis mode. This is one of the most underestimated risks in financial midlife is understanding this risk. And so starting to have these conversations, if you're listening in your 30s with your parents now, asking them what their plan is

• 42:07Andrew Giancola?

  and actually opening up with your aging parents is really, really important. And then once you hit your 40s, then you guys have a plan in place and know what you're going to do. So those are some of the trends for your 40s. Now let's jump into the 50s.

• 42:22Andrew Giancola?

  All right, folks in your 50s, here are these seven worst trends of folks in their 50s and some things that we need to make sure that we are fixing. Number one is not taking retirement seriously until it's urgent. So if you are in your 50s and you don't have a retirement plan in place, now is the time we need to get a pants-on-fire emergency going and we need to take retirement seriously. The median retirement balance for folks in their 50s, according to Fidelity, is $189,000. And so we need to make sure instead that we are trying to aim for five to seven times our salary at least saved up in our 50s. And so 45% of people in their 50s have no retirement savings whatsoever. And so your 50s are the last big decade that you have available to you to get the ball rolling and get saving for retirement. Now, you have the ability to have catch-up contributions in your retirement accounts. There's a huge benefit.

• 43:07Andrew Giancola?

  And the earlier you adjust, the less drastic you have to be as you approach retirement age. And so really important to make sure that you get all of this set up. Because once you're five years out of retirement, that's where I want you to have your retirement plan set in stone and buckle down so you know exactly what you're going to be doing. So go through everything. How much cash are we going to have? How much do we need to save? How much social security are we going to get? You need to be thinking through these questions and having a plan in place. Number two is staying in high-fee financial products. So 1% advisor fees can consume up to 28% of your entire portfolio. And so a 1% fee may not sound like a lot, but it actually is a huge, huge portion of your portfolio if you have those high-fee products.

• 43:47Andrew Giancola?

  And actively managed mutual funds can carry a 0.75% to a 1.25% fee as well. And so you have the advisor fee, you have the mutual fund fees. And so these are really, really high. And in fact, things like annuities can charge 3% per year. So all of these are really, really important to make sure that you understand how impactful high fees are. Now, we've done entire episodes on fees and we have some new ones coming out. So make sure you subscribe to this podcast because we have some big ones coming out for next year as well. Talking about the major impact of fees, but being in high-fee products is something you definitely want to avoid in your 50s because it eats away at the dollars that you could have in retirement. Number three is avoiding hard financial conversations. And so 52% of couples have not discussed how much they need

• 44:31Andrew Giancola?

  To save to retire 52% when they are in their 50s. And so this is something where making sure you sit down with your spouse, start having money conversations, even if they're uncomfortable at first is really important. 45% have not discussed where they want to live. Are we staying here? Are we moving somewhere else with a lower cost of living? Are we moving closer to the kids? What are some of the things that we're going to be doing? And couples who regularly discuss money are two times more likely to feel confident about retirement. And so this is something that is very, very important for most people out there is they need to make sure that they are having constant conversations. If you're in a relationship, having conversations about money is one of the most important things that you can do. Number four is carrying debt into retirement. Adults over the age of 50 have $9,000 in credit card debt on average.

• 45:15Andrew Giancola?

  And mortgage balances for people in their 50s have doubled since the year 2000. So as you approach retirement age, one of the big things that I want you to do is try to get rid of all of your debt. So that when you reach retirement age, you don't have to worry about debt anymore. You don't have to worry about those extra payments, including your home. This is something where most people out there, if they start to get the ball rolling on this, they can have their debt paid off by retirement age, and that just reduces their stress and anxiety in retirement. The last thing I want you to have in retirement is financial stress or anxiety. Instead, I want you to enjoy retirement, enjoy the time that you have. But if you don't think about these things or try to put a plan into action, you're going to get to retirement age and regret not having done this. Number five is having no healthcare strategy whatsoever. The average couple will spend $315,000 in healthcare in retirement.

• 45:59Andrew Giancola?

  And 70% of adults aged 65 plus will need long-term care. 70%! Long-term care can cost anywhere from $60,000 to $120,000 per year. And so healthcare becomes one of the biggest cost items in retirement over that timeframe. And so we need to make sure that we are planning early to avoid any surprises whatsoever. And the risk of needing long-term care grows dramatically in your 50s and 60s. And so making sure you have a plan in place, having conversations with your children so they know what you want to be doing when it comes to healthcare is very, very important. But also having cash set aside so that you could pay for that healthcare is also very important. Number six is overestimating your ability to work forever. More than 50% of retirees leave work earlier than planned.

• 46:41Andrew Giancola?

  And most are due to health or job loss. So more than 50% actually leave work earlier. And only 6% retire later than expected. Those numbers are astounding, meaning 50% leave earlier, 6% retire later than they expected. So folks who say things like, "I'll just work longer," is not a retirement plan. You've got to make sure that you are thinking about your plan, putting your plan into place as early as possible in your 50s, so that you don't get to retirement wondering what you should have done. Number seven is taking on big financial burdens later in life. So 36% of parents in their 50s support adult children financially. And cosigning loans is becoming increasingly common. And many people who go out and buy their dream home in their 50s are taking on a huge portion of debt really late in life.

• 47:26Andrew Giancola?

  And so this is something you want to avoid at all costs, because if you start to take on a massive amount of debt in your 50s, that means that you're not going to be able to become debt-free by the time you hit retirement age. And so we want to make sure that we enter retirement completely debt-free. And so thank you guys so much for being here today. Those are the seven worst money trends by age. I truly appreciate every single one of you. Again, if you want help from us directly, please consider joining Master Money Academy. That is where I help people every single week master their money, where we have all of our courses in there, we have a community in there, I do weekly coaching calls. So all of those are included inside Master Money Academy. So I'd highly encourage you to check it out. We'll have it linked up down in the show notes below as well. Thank you guys so much for being here on this episode.

• 48:09Andrew Giancola?

  Our goal is to bring you as much value as possible on this podcast. And so would love for you to subscribe and be a part of this journey. We have a ton of great content coming out for you in the next couple of weeks. So really, really excited for that. Again, thank you guys so much for being here and we'll see you on the next episode.