Do you find yourself watching your money do a disappearing act each month? Do you find that no matter how much money you make, it’s just NOT enough to cover your expenses? Do you think that you SHOULD be able to afford a comfortable lifestyle but find that it just doesn’t happen? Well maybe it’s time to take a step back and reevaluate your money habits and here’s a pretty good place to start! These are some of the most common money mistakes that will make you poor! Do you do any of these?
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I shudder when I think back on the times when I made many money mistakes. These mistakes left me broke, poor, stressed out and overwhelmed.
Money came and money went. The thing is I had no idea where it was going. I lived extravagantly – my social media showed it and my wallet felt it. It was only when I got pregnant and my husband had lost his job that we had no other choice but to survive on a bare bones budget. It was only then that I got my financial act in order!
Being pregnant and living on one income was beyond scary. But it was actually the start of mature financial planning and learning how to take control of our finances.
Do you know that your money habits can make you or break you?! It seriously makes all the difference. Sometimes a few simple changes can turn your finances around.
Switching off the light as you leave a room, making your own coffee at home or meal planning and sticking to simple, frugal dinners are super easy ways to get started! Believe it or not, these little changes can help you save hundreds (or even thousands) of dollars each month!
10 Money Mistakes that are Keeping you Broke
1. Not Budgeting
Budgeting can be the single one thing that can turn your finances around, mainly because it’s the start of you taking control of your finances.
It makes you aware of how much income you are earning and exactly how much you are spending. It tells you what your monthly expenses are, lets you know if you are spending more than you earn and shows you areas which can be cut to lower your expenses.
Creating a budget alone will not actually help though. You need to stick to it to make and see a difference.
Needless to say, it’s a HUGE money mistake to neglect budgeting. Start with this crucial step and you’ll see how easily other good money habits will follow after.
Not sure where to start? How about taking a look at this concise guide on How to Make a Budget in 7 Simple Steps.
2. Spending More than you Earn
I know what you’re probably thinking – “Well DUHH, Captain Obvious.” But this one has to be said.
Believe it or not, millions of people worldwide are in debt. Why? Because many people spend more than they earn. In fact, according to The Balance, in January 2019, US Consumer debt rose 5.1% to $4.035 TRILLION.
A closer look might reveal that some of these were investments such as a student loan or ‘good’ debt like a house mortgage. But still, credit card debt totaled $1.058 trillion, a 2.9% increase. That is $1.058 trillion dollars owed because of people spending more than they earned.
Spending more than you earn is a terrible money habit that can keep you in a financial bind for years and years to come. Instead, analyze your expenses, adjust your spending habits so that you can always afford what you buy, and ensure that you have an emergency savings so that you never have to be forced to charge it to your card.
We get it. Sh*t happens. Just make sure you have an emergency fund to dip into when this happens.
This third money habit is linked to the previous point – spending more than you earn. Essentially, when you spend more than you earn, it means that you are borrowing money.
Whether it’s the bank, your credit card (aka the bank with higher interest fees), mommy, aunty or friend, borrowing is what leads to being in debt. It increases your monthly expenses since you now have to repay what you owe with added interest.
Other than student loans or a mortgage, I strongly suggest saving up for whatever item you wish to purchase. Instead of paying back monthly instalments, save this money and purchase the item cash (which means you get it for way cheaper this way!).
4. Wasting Money on Unnecessary Items
Another bad money habit is spending money on unnecessary items. Unnecessary means something that you do not need.
Do you really NEED a tenth handbag? Or do you NEED a 85236714th bottle of nail polish?
Mastering this habit requires you to separate your wants from your needs. For example, you may need a new work shoe if your current one is burst beyond repair. But getting an iPhone X (or upgrading any electronic device, really) is a WANT and not a NEED.
This habit also requires you to spend wisely. What I mean is that you should make informed, educated investments and stay away from bad habits like gambling.
When you can distinguish between both, you’ll be in the perfect position to decide what you need and lower your expenses by ditching the rest!
5. Paying Late Fees
Paying late fees is yet another bad money habit to take note of. It is such an unnecessary waste of money. Who likes putting their hard earned money into someone else’s pocket for no reason?
Add up late fees for a few different bills and you can end up spending hundreds in late fees per month – definitely a huge mistake if you’re trying to improve your money habits.
Paying late fees comes as a result of being disorganized and and not being in complete control of your finances.
To avoid late fees and save money, set up a calendar and write down the due dates of your various bills and payments. Then ensure that you pay these in full before the due date.
Stick to this and say bye bye to late fees for good!
6. Paying Full Price
Paying full price on anything is another bad money habit to avoid if you want to grow your savings and build your wealth! Once you can get something on sale at a discounted price, wait before completing your purchase! Always see if you can access a coupon code or discount before placing your order.
If I ever need to buy anything, from groceries to school supplies, I ALWAYS check ebates before I check anywhere else. Ebates gives you immediate access to HUGE discounts on products from most retailers – Amazon, JC Penny, Kohls, Carters and hundreds of others. I mean… why pay full price when you can get these great deals through ebates, right?!
You can start saving too! I’m totally letting you in on the secret!
Sign up for ebates through this link and get a $10 Welcome Bonus as you get started!
7. Not Attempting to Increase your Income
When you don’t have a side hustle, you’re leaving money on the table.
Everyone should have a side hustle! You know… a Plan B; a backup job, one that makes you extra money but also provides a safety net in case you lose your regular 9-5.
You cannot be in the midst of financial woes and not have a side hustle. A side hustle is life changing. Start side hustling and watch your savings grow and your money problems disappear!
Choosing an appropriate side hustle will depend on how much extra time you have and what your personal likes and hobbies are. Believe it or not, you can absolutely make money doing something you love!
I actually turned my blogging hobby into a monthly income! And this is just one of the many side hustles that has made me money over the years. Check out this list of 17 Side Hustles that have Made me Over $67K!
8. Emotional Spending
Emotional spending is a huge money NO NO.
Many people turn to shopping and spending to help them deal with stress, overwhelm, anger or sadness. Heck, some people even spend when they’re happy as a form of celebration! And while nothing is wrong with this if you have budgeted for this and can actually afford it, the problem starts when your emotional spending begins to reel you into a life of debt.
When spending, do so because you need to and don’t let your emotions control your actions! Stop emotional spending and ditch this bad money habit today!
9. Not Meal Planning
Meal planning is an important part of keeping on top of my finances! If you know me at all, you’ll know that I absolutely believe that meal planning is a game changer when it comes to your finances.
Failing to meal plan will result in wasting hundreds of dollars each month. Food is one of the largest portions of our budget. That being said, it makes sense to plan how every dollar is allocated and spent to find ways to minimize our food bill.
In fact, we cut our food bill in half by following these easy tips. Meal planning was one of the tips that made a big difference for us.
If you want to know the exact steps I took that helped me save hundreds of dollars each month, grab my free ebook below. I explain how I meal plan to spend less and save more.
I know you’re probably thinking, “but Amanda, I work everyday, I barely have time to cook!” And trust me, I understand! I work a 9-5 too! And I have the kids! And I blog on the side! But the great thing about meal planning is that you can plan for takeout days if you need to, or you can make a bigger batch/portions one day and schedule a leftovers day the next. It’s your plan and it can be flexible to suit your needs.
That’s the beauty of meal planning! It doesn’t necessarily mean that you HAVE to cook every single day! It just gives you an idea of how much you will spend for the upcoming week and having a plan makes it easier to stick to this set amount. Of course this will not work if you are planning to have takeout every single day! Just try to stick in some cooking days somewhere in there.
Pssst! Meal Planning saves me thousands of dollars every year! Not sure how to get started? Grab a copy of my free Meal Planning e-guide below.
10. (Trying to) Keep up with the Jones’
Trying to keep up with the Jones’ will leave you BROKE AF and quite frankly, they are more than likely broke too!
Don’t live a life that you can’t afford just to show up your neighbor, friend, coworker or high school classmate from the Class of 2006. Don’t spend on a vacation that you can’t afford just because you want an insta account filled with pretty pics in Prague just like your cousin’s friend’s boyfriend’s sister. Don’t be forced into an expensive night out with friends if you know you’re pretty damn close to eating Ramen for the rest of the month.
You get the point. Don’t try to keep up with the Jones’!
These are just a few of the most common money mistakes that are keeping people broke. If you know you have financial goals that you want to achieve and you know that you make these mistakes, it’s time to take a look at some of the things you can do to make some changes.
It starts with a positive mindset and attitude. Start with this and everything will fall into place!
So are there any money mistakes on this list that you’re guilty of making? Do you know any other common money mistakes that should be added to the list? Share with us in the comments below! I’d love to hear from you!
***To get started on your financial journey, I’m giving you access to my FREE 5 Days Money Management Course. This will help you prepare, plan and organize your finances so that you can build up your savings and get rid of debt too! Just enter your email and you will get the course delivered straight to your email inbox!***
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Good luck! You can do it!
Until next time,
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