Stories. We all have them. Have you made some of these money mistakes? The answer might surprise you.
We’ve all done dumb things with money, myself included. This week I am going to share with you nine money mistakes you should avoid. In fact, my pain will be your gain, so let's take a look.
Two-thirds of Americans don’t have $1,000 set aside for an emergency when that simple $1,000 would be enough to keep you safe from 90% of what Murphy’s law will throw your way. If you don’t have an emergency fund now, go on a spending freeze until you set it aside because you need to have this important security in place.
For more information on this topic, watch my previous Savvy Saturday video, “The Essentials of an Emergency Fund!”
I spent almost ten years drifting between different day jobs before I woke up and started pursuing this passion of coaching and I wouldn’t trade it for the world. Are you stuck in the 9 to 5 and just going in circles? Whether it’s a side hustle that turns into a business or a separate gig that helps you pursue your passions, you owe it to yourself not to miss out. The cost of living continues to rise and job security is becoming a thing of the past, so don’t look back at your life in regret, wondering what could have been. Take action now! To dig deeper and learn more about ways to make extra money, check out my video, “20 Side Hustles to Attack and Profit From Right Now.”
Whether you are working a dead-end job or one with no opportunity for growth, don’t settle. Life is more than money, let alone money mistakes, and countless people have turned their passion into profit.
If your job is ultimately holding you back, set a goal and start hustling because life is too short. And, while the average raise is 3%, changing your job could boost your income as much as 10 to 20%.
People ask me all the time what I see is the number one problem people have with money. The answer: Not paying attention! We live in a culture that is way too busy, short-term minded and filled with distraction, but one of the best ways to combat that and take charge of your money is to start writing your expenses down. Don’t make a report at the end of the day. Write down what you spend immediately after you spend it. Don’t drive away or walk away from an expense without doing so. Bought a cup of coffee? Write it down. Paid a bill? Write it down. Writing things down restores a long lost relationship between your brain and your actions. You can move to a more sophisticated system later on. In the meantime, rebuild that awareness muscle. Start right now!
This is a big one! If you aren’t thinking holistically with certain expenses, it can backfire. For example, if you want to go on a trip, you need to buy a plane ticket, book a rental car, reserve lodging and have money for food. Because plane tickets are so volatile, people jump at a good price without taking into consideration the entirety of the trip's cost, which leaves them locked in with non-refundable tickets. This typically leads to overspending on the rest of the trip because they have to make it happen and don’t spend enough time planning ahead.
Instead, book refundable lodging as well as a rental car that provides a refund with 24 hours advance notice before moving on to the other expenses. Likewise, if you are not looking at your spending long-term, you may end up buy something in one category or from a few different categories and forget that at one point you will need that money for something else. Boom–budget busted!
Keeping credit cards around for emergencies, because they are sentimental, or simply thinking they are necessary to win financially is a huge mistake. Think of it this way. If a snake bit you and you survived the snake bite, would you keep it as a pet in a tank in your house? No, of course not! Keeping credit cards around is keeping risk and temptation around, so give yourself the gift of free plastic surgery and destroy them! Once they have a zero balance, close them because if you continue to play with fire, you will continue to get burned.
Man cannot live on bread alone, but you certainly can’t live on grilled cheese, ramen and hot dogs either. In the absence of a home economics course, you’ll have to teach yourself how to cook but take heart! In the age of YouTube, there are no excuses when it comes to learning to cook the basics–healthy options included. Call up mom, download some recipes, share with friends and get started.
Don’t be afraid to make mistakes! For more information on expanding your palette without shrinking your wallet when out on the town, check out one of my past videos, “How to Keep Your Wallet and Stomach Full When Eating Out!”
Goals are essential. No one is motivated to do the smart, financial stuff just because it is the wise thing to do. What are your values? What does wealth mean to you? What’s the most important thing in your life? Dig deep and ask yourself these tough, yet important, questions. You can have a strong ship to sail but without a rudder, you will spend your life wandering.
Whether it is that daily coffee habit or visits to the golf range, there are dozens of little decisions you make that become costly when added up. The next time you prepare to make a big decision twice, ask yourself if you can afford it long-term. If not, choose to say “no" and if “yes,” make a solid plan to compensate for it in your monthly budget without detracting from your other goals. I challenge you to replace the fear of missing out with the joy of missing out by letting every decision be filtered through your purpose! Avoid making these nine money mistakes and as a result you will find more money to fund your dreams!
Be sure to also check out my free e-book to help you on your journey. Question: Have you made one or all of these money mistakes? Let me know in the comments. Are there a few that didn't make the list? Stop sabotaging your future and step up! It's not too late to learn how. Contact me today!
I hope you found this information helpful. Feel free to join my FREE Facebook community, The “Strong Together Money Community.” Post pictures or share some of your side hustles that help fund your dreams.