5 Money Mistakes You’ll Never Make Again

Want to know what are some common money mistakes? You need to know exactly what are the biggest financial mistakes people make, so you can come ahead financially!

Getting your finances in order can be pretty darn exciting! And if you are anything like me, you are doing all the research you possibly can to make sure you don’t make any more costly money mistakes.

I’m sure you’ve made some pretty bad financial mistakes too, but hey! You’re not alone. You are going to learn all about the biggest financial mistakes people make and how you can run away from them.

After learning all about these financial mistakes, I can promise you that you are going to be extra careful when handling your finances and you’ll save SO much more.

This post is all about the worst money mistakes that everyone trying to be a better adult should know about.

Worst Money Mistakes

1. Not Paying Yourself First

This is a super common money mistake that you’re probably doing without realizing it. You see, most people never themselves first. They usually pay everyone one else like their bills, rent, car payment, groceries, etc, and if there’s anything else left in the budget, then they’ll spend it too.

You need to set aside a percentage of your paycheck and pay yourself first automatically. For example, you can set up automatic contributions from your paycheck to go directly into your retirement account.

Let’s say you decide today to increase your 401k contributions to 10%, after 30 years of contributing to your retirement account, you would have close to 1 million dollars.

The sad part about it is that hardly anyone does it, they just figured they’ll just rely on social security and don’t worry about ever paying themselves first.

Or others just contribute about 3% or 6% of their income just to get the employee match and that’s it. What they don’t know is that they’ll never be able to build wealth by just contributing so little.

Don’t make the same money mistake and decide today to increase your contributions to at least 10%-15% into your retirement account. And watch your nest egg grow while you sleep!

Do this: Commit to saving/investing 10%-15% of your paycheck automatically!

{CHECK OUT: How To Pay Yourself First in 1 Easy Step}

2. Not Having an Emergency Fund

This is a must! If you want to get out of debt and stay debt-free, you have to build a little cushion between you and any catastrophic event.

Don’t rely on credit cards for an emergency. You need to have a solid rainy day fund, so you can avoid going further into debt.

Even if you are still paying debt, you can still build your emergency fund. You can always pay the minimum payments on all of your debts. And then throw any extra money from your paycheck towards your emergency fund account.

You should keep your emergency fund account separate from your daily checking account. That way you won’t accidentally use it up. (So, don’t let the extra money sit in your checking account, you should transfer it into an emergency fund savings account.)

I recommend you go to bankrate.com and learn more about High Yield savings account. High-yield savings account earn way more interest than the average account.

Open a high-yield savings account so you can grow your savings faster.

Most financial gurus suggest you should have a 3-6 months emergency fund.

Always remember that an emergency will come up and you want to be prepared for it and not feel forced to go back into debt again.

Do this: Try to always save a percentage of your paycheck to fund this account until you are able to fully fund your emergency fund.

{CHECK OUT: Here’s Exactly How To Build Your Emergency Fund}

3. Not Budgeting

You can’t win with money if you have no idea where it’s going. You have to get a clear picture of what’s coming in and what’s coming out.

That’s exactly what a budget is. It tells you how much you make and how much you spend/save.

You need to stop going with your gut feeling on this one, you gotta actually look at the numbers and get a clear picture of what your budget looks like.

Don’t make the horrific money mistake of guesstimating and ignoring your budget. You’re never gonna get anywhere, save money, or get out of debt by just going with your gut feeling.

You have to get intentional! It’s your money! You want to know exactly where’s it’s going and how much you actually get to keep. And creating a budget will allow you to do just that.

{CHECK OUT: How To Budget Money} {CHECKOUT: Here’s Exactly How To Do A Zero Based Budget This Week}

4. Not Using Cash

I know it’s SO much easier to just swipe a credit card and get anything you want in an instant. I’m sure you sometimes you may feel like Ariana Grande sings in her song “I see it, I like it, I want it, I got it.”

But that’s the worst money mistake you could make. Because you’ll probably end up maxing out all your credit cards or running out of money. Which leaves you feeling stuck and living pay check to paycheck.

You see, not using cash makes you feel like you have all the money in the world to buy yourself whatever you want.

I bet you that if you use credit cards for everyday purchases, chances are you’ll probably end up overspending. But if you use cash, you’ll have a harder time letting go of your physical cash and you’ll end up saving more.

Do this: Use cash envelopes.

Try paying EVERYTHING with cash. And I bet you’ll spend less money.

There is an emotional attachment to using cash and is very painful to see it disappearing, which will force you to stay on budget. And it will make you think twice about making that impulse buy.

5. Ignoring Your Debts

Remember when you thought you could just ignore your personal finances and everything will work out? See where that got you?

Nowhere! You’re still in debt.

I’m so guilty of this too. I was overwhelmed with so much debt, that I did not want to deal with it. I’m sure you’ve felt the same way.

And hoped your debt will eventually be all paid off, so you won’t worry.

But, you have to know how much you owe and come up with some sort of debt attack plan. So you can be debt free and stay debt free and build wealth, invest and make money work for you.

Do this: Get a piece of paper and add up all your debts from smallest to largest. And decide to use the debt snowball or the avalanche method.

{CHECK OUT: How to Use The Debt Snowball And Debt Avalanche Method To Destroy Your Debt}

{CHECK OUT: 5 Personal Budgeting Tips For Anyone Who’s Ready To Be Debt Free}

Also, figure out when you debt pay off date will be. Knowing there is a light at the end of the tunnel will give you an extra motivation to keep tackling all your debt. (Hey, you might surprise yourself and realize you owe way less and are closer than you think.)

This post was all about money mistakes you can be out of debt faster.

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