Common money mistakes happen to everyone, but the good news is that there may be a fix.
For the most part, simple money mistakes such as paying more for a product than you should is a lesson.
Other money mistakes include knowingly using a credit card to book a holiday when you can’t afford it.
Create a personal list of money mistakes that you’ve made and evaluate whether there is a fix or if it was a lesson.
Either way, lessons are all about life, but sometimes one lesson can take a long time to fix.
Recently our friend was engaged to marry the love of her life, and they decided to move in together.
She sold her house, and they decided to renovate his house with the money she earned from the sale.
Things happened, and they broke off the engagement before you know it, and she moved out.
It sounds pretty standard; however, she put over $250,000 into renovating and expanding the home.
He’s not interested in paying her back the money as he would have to sell the house, and now she’s taking him to court.
Where she once had a hefty bank account to catch up on debt repayment or invest in retirement, the bank account is empty.
These common money mistakes cost a fortune, stress and depression for the person left out in the dust.
Don’t be foolish or fooled; think smart about the what if’s before handing over your money.
Today, I’ve created two lists that we can discuss in the comment section.
One is common money mistakes, and the second is ways to fix them, although there are no promises.
Once you’ve finished reading this post, I’d like you to leave me a comment sharing a mistake and how you went about fixing it.
Not All Money Mistakes Can Be Fixed
As you read the common money mistakes below, be aware that everyone has a financial situation that differs from yours.
For example, grandma might help her grandson by giving him $5000 to pay off a student loan without wanting the money back.
Some younger folks may have parents with money that helps them out of their debt situation.
Whatever comes to mind when you read the money mistakes and fixes below, think about your situation.
Jealousy about money is a lousy path and will only push you deeper down the black hole.
One last thing, if you believe in yourself, you can do anything.
How Sharing Turned Into Income
I started this blog in 2012 and now earn thousands of dollars each month, but it fluctuates.
When I began, I did not build blog income into my plans, but as I went along, I realized that helping people through our experiences produced income.
Related: How I earned my first $1000 Blogging
Many of you emailed me and thanked me for chatting or answering questions. It made me realize the importance of helping people I don’t know.
I’ve also used part of the money I’ve earned from this blog to donate to charities.
Although I have blog bills to pay from what I earn and pay taxes, it was never about the money; it was about becoming financially literate.
I learn from many of you just as you learn from our journey, and we’re thrilled to have you here with us.
So, forget about anything else when you continue reading below.
Take a few minutes to write down what money mistakes you need to tackle in a budget journal or on a piece of paper.
If you have any questions feel free to email me through the contact form on this blog, and let’s chat.
Common Money Mistakes To Avoid
- Stop Paying For Friends so that They Hang Out With You
- Buying Without Thinking About The Financial Consequences
- Failure To Use A Simple Monthly Budget
- Credit Cards Are Not Free Money
- Excuses Don’t Pay The Bills
- Avoid Secret Spending And Hiding Purchases
- Stop Building Your Debt Portfolio
- Eating Out, Dining In, Meal Kits, Uber Eats Delivery, and Drive-Thru Purchases Costs Too Much
- Back Off On Vacations That You Haven’t Saved For
- Think Ahead About Expenses You’ll Have To Pay During The Year
- Stop Leaving Money On The Table
- Buying Brand New Before Searching For Gently Used
- Abandon Bank Fees That Eat Up Your Money
- Buying A House With The Minimal Downpayment
- Keep From Being House Poor
- Not Investing In An RRSP, TFSA or Employee Investment Matching Plans
- Curb Showing Off When You Are Broke
- Not Investing In Your Child’s Future Education Fund
- Avoid Hanging Around People Who Have No Intentions Of Moving Up
- Steer Clear Of Investing Your Money Into A Relationship Or Lending It
- Eliminate Buying Items You Already Have At Home
- Not Paying Into Life Insurance, Critical Illness Insurance
- Forgetting To Buy Tenant’s Insurance
- Hoarding Stuff Never Used Or Lightly Used
Money mistakes we’ve made, we learned from them and vowed never to let them happen again.
For example, not paying our property taxes on time and getting an interest charge slapped on the bill.
I know that might seem petty to some of you, but it was a big deal.
We don’t pay interest and never have, apart from mortgages from homes we’ve owned.
Mrs. CBB had a small OSAP loan that took her forever to pay because she paid the minimum each month.
Sadly, she says she had the money to pay more of the loan off but never did out of fear of being broke.
When she bought her brand spanking new vehicle, the payments were 0% interest for five years.
I paid cash for my used vehicles, which came with an excellent price, thanks to Mrs. CBB’s negotiation skills.
Let me be clear before I go on that we were never given money from anyone to help us.
Everything we have saved or invested has come from working and living a frugal life.
Although frugal may not appeal to everyone, I’m sure you’re here reading this blog because you value your time and money.
We’ve all made money mistakes, and that’s life, but not giving up on them and finding a fix makes you stronger.
Write Down Your Money Mistakes
I sat in front of this computer for an hour, thinking about common money mistakes.
As I was typing them out, it occurred that this list could go on forever.
What is familiar to one person is normal to another, so this list is not exhausted.
Below is a list on fire, especially since Covid-19, where people lost their jobs or had their hours reduced.
Debt repayment was put on the back burner, and many of you may have had to stop paying for your retirement investments.
It hurts when you think your financial health is figured out and life falls apart again.
For that reason, not everyone creates money mistakes on purpose, somewhat out of necessity to live.
However, if you participate in any of the items listed below that are money mistakes, you need to fix them.
Ideally, you don’t want to be in this category of money mistakes, so I encourage getting ahead of future problems.
For example, stop using the card and pay it off if you want to reduce credit card debt.
Doing so means you have to consider removing and reducing things from your life to become debt-free.
Anything that costs you money that is not investing in you or your family is money you could have saved.
Our biggest goal was to quit smoking to avoid heart disease and any other complications that come with smoking.
That was twelve years ago, and although it was challenging, it may just have saved our lives.
We calculated the math one day and couldn’t believe how many thousands of dollars we saved.
Give Stuff Up To Get Ahead Financially
Find something that you can live without or that you must challenge yourself to give up to get ahead.
Another example is that we gave up our cable and home phone in 2021 and haven’t looked back.
We wondered why we were so hesitant to do so in the first place.
The extra $120 a month was put towards our increased grocery budget to get through increased prices.
When it comes to being financially savvy, it’s a mindset that you crave once you see the results.
Every year will be a challenge whether you have savings.
Just because you’re debt-free doesn’t mean you’ve won the game of life because you can drop dead or have a medical emergency anywhere.
There will always be expenses, whether living at home, in a rental or in a long-term-care facility.
If you take action now, you won’t have the burden of debt on your shoulders.
I’m not sure how you feel about wanting to leave a legacy for the future generation; however, put your heart in front of your wallet.
Money Mistakes You Can Fix
- Go Alone If Your Friends Can’t Afford To Go
- Before You Make A Purchase, Check Affordability
- Start By Budgeting To See The Big Picture
- Paying The Minimum Balance On A Credit Card Is Not Good Enough
- Be Realistic About The Money You Earn
- Communicate Spending Plans
- Pay Yourself First (Savings After Debt) And Speak With A Debt Consultant
- Budget Grocery Shop And Kibosh Eating Out Or Buying Drinks And Snacks On The Go
- Reward Yourself With A Vacation When You’re Consumer Debt Free
- Save For Future Expenses By Projecting Them
- Earn Extra Money, Rewards And Gift Cards Through Various Canadian Companies
- Consider Second-Hand, Used Or Free Items First
- Bank With A No Fee Financial Institution
- Save 20% Or More For A Downpayment On A House To Avoid CMHC Fees
- Purchase A Home On One Income If A Couple or Consider A Small Starter Home
- Speak To A Financial Advisor About Investing In Your Future Retirement
- No One Cares About Your Wealth. They Want To Know How To Be Wealthy.
- Start Saving In A Registered Education Savings Plan (RESP) For Your Child
- Be With Friends Who Have Ambitions To Be Successful At Whatever They Do
- Go In 50/50 Financially When In A Relationship
- Invest In Volunteering To Network And Help Others At The Same Time
- Take Charge Of Possibility And Buy Renter’s Insurance
- Life Insurance Is A Must And Inexpensive If You Opt For Term-Life Insurance
- Stay Organized and Declutter Your Home, Vehicle and Garage Often So You Know What You Own
- Sell What You No Longer Need If You Need Money Or Consider Donating To Not For Profit.
Mortgage Insurance Is A Waste Of Money
What is mortgage insurance?
It’s a type of insurance you want to avoid paying and instead invest in life insurance.
Opt for saving the 20% downpayment before even considering starting house hunting.
Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20% of the purchase price.
Mortgage loan insurance helps protect lenders against mortgage default, and enables consumers to purchase homes with a minimum down payment starting at 5%* — with interest rates comparable to those offered with a larger down payment.CMHA Website – See Link Above
Learn About Money And Watch Your Interest Grow
I don’t mean interest in debt repayment; I mean the value that you get from financial literacy.
You’ll find me listening to Canadian finance podcasts on Spotify or checking out other Canadian Finance Blogs and Books.
Wealth is classified as information stored up top because you’ve invested in yourself.
However, whatever you do to increase your knowledge will only benefit you if you put it to use.
On that note, thanks for reading and please leave your comments below.