I’ve made my mistakes with money. And I’ve watched as others have made the same scary money mistakes (or even bigger ones). It is heartbreaking, and I wish more people would avoid making them.
Scary Money Mistake: Not saving enough money.
One of the scariest mistakes you can make when it comes to money is not saving enough money. A properly funded emergency fund will make sure you can weather unexpected expenses, illnesses, or unemployment. Setting aside a portion of your income in a retirement fund will allow you to live comfortably when you’re too old to work any longer. You can save money even when you think you can’t. And you need to start today. The money you save now is money you won’t have to borrow later.
Scary money mistake: Carrying a lot of debt.
Credit card debt, student loans, car loans, mortgages, and other debt suck the life out of your future. With every debt you carry, you’re spending thousands of dollars extra in interest. The payments you’re making prevent you from saving money and positioning yourself for comfort in retirement. If you were in a sinking boat, would you add water to it? No. So stop taking on more debt and start bailing yourself out.
Scary money mistake: Keeping up appearances.
One of the saddest things I have seen is people who spend money to keep up appearances. They have to wear the latest fashions. They need to take elaborate vacations. They always drive new cars Their homes are huge and expensively furnished. They give over-the-top gifts for every occasion. And most of those folks are broker than broke, and they’re just desperately trying to belong in a consumer-driven world. It’s a losing game to spend more than you make trying to keep up appearances and jealousy can really cost you. Be honest about who you are and what you can afford. And find people who appreciate you for those things. You will be so much happier and save so much money.
Scary money mistake: Skimping on insurance.
When you’re trying to trim your household expenses, cutting back on insurance can seem like an easy place to cut, especially if you rarely make claims. Ignoring potential risks to your family, health, home, and vehicles is a huge financial mistake. A cancer diagnosis, a house fire, a sudden death in the family, or a car accident can be financially and emotionally devastating. Instead of skimping on insurance coverage, shop around for the best rates and buy the best coverage you can afford.
Scary money mistake: Failing to pay attention to finances.
I’ve said it before, and I’ll say it again: No one cares about your money as much as you do. That means that you need to stop putting blind faith in financial advisers, banks, and even your spouse. Talk with others about finances, seek their advice, but ultimately, make sure you have the knowledge to take responsibility for your own finances. Learn as much as you can about how much money you make, how you spend it, how you save it, and how you invest it. You’ll be better positioned to make smart financial decisions in the future when you know as much as you can about your money.
We all make mistakes. But let’s stop making the mistakes that cost us money and cause so much stress.