We’ve all made money mistakes. I don’t think anyone has ever said “I’ve never made a money mistake in my life.” If so, I’d like to meet that person! 🙂
Even if you have made money mistakes, it’s never too late to change your life around. Below are a few money mistakes that you may be making:
Taking Out Too Much in Student Loans.
I’m guilty of this one. Luckily my student loans are now paid off, but I would have had thousands of dollars less if I wouldn’t have taken so much out when I was in college.
My problem was that I would always take the full amount out each time. With student loans, the money goes towards your tuition, but whatever is left over is just deposited into your bank account as cash.
I never really thought about how taking an extra $1,000 or $2,000 each semester would hurt me, but it did!
Thinking You’re Too Good To Save Money.
When I had my day job, I used to always bring my lunch. There were two reasons for this: a) I wanted to save money; and b) in order for me to get lunch it would have meant that I would need to get in my car and actually go somewhere (I was too lazy for that).
Occasionally, I was made fun of for some of the things I would do to save money. Some thought I couldn’t afford to eat and I even had people offer to buy me lunch.
This also applies to coupons. I know so many people who think that they will be looked down upon for using coupons. I just don’t understand that. WHO CARES IF YOU USE A COUPON?
Anyone can save money, and there should be no shame in doing so.
Not Thinking About The Full Cost.
I have seen this many times. You buy an item without thinking about the full cost of it – you only look at the sticker price. You may be able to afford the sticker price, but can you afford the whole thing?
Many things have additional costs:
- If you buy a house, other costs include home insurance, property taxes, utility bills, repairs, and so on.
- If you buy a car, other costs include car insurance, gas, maintenance, taxes for buying the car, yearly personal property taxes, and so on.
Spending More Money Than You Make.
If you are spending more money each month than you make, then you are making a money mistake. You need to figure out what is going on so that you can fix this problem.
Are you trying to keep up with the Joneses? Are you not making enough money each month to support basic life necessities? Do you have too much debt?
Whether you are spending $100 over your budget each month or $1,000, you need to fix this money mistake.
You can start fixing this money mistake by creating a budget. You need to list your income and realistic expenses and see where your problem is.
Buying Things Because You Think You Deserve It.
Don’t get me wrong, I think that money is meant to be enjoyed. However, if you are going into thousands of dollars of credit card debt because you think that you deserve to own things, then you may have a spending problem.
Something that you may want to think about is why you think you deserve things. Is it because another person can afford it so you think you should be able to as well? Or, is it because you want to buy things to cure a bad mood?
Also, does buying things actually make you happier? Or does it just lead to you buying even more things?
Related content: 6 First Time Home Buyer Mistakes
What money mistakes have you made or seen?
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Kylie Ofiu says
Marrying the wrong person and the subsequent divorce cost me $23,000 in 12 months. As such, I never plan to remarry and my new partner and I keep finances separate.
Michelle S. says
I’m sorry Kylie 🙁
DC @ Young Adult Money says
The coupon thing is a big one. It’s kind of ridiculous when people look down on others for using a coupon while simultaneously look highly of others who make additional income. It’s one in the same, in my opinion, and no one should be above saving money.
Michelle S. says
I agree DC!
Brian @ Luke1428 says
My biggest money mistake was spending more than my wife and I made. Early on we had accumulated some savings but somewhere about 6 or 7 years into marriage, I really started to lapse in discipline. We would have to withdraw money each month from our savings account to pay for the amount we spent on our credit card. That money slowly dwindled away and would have been completely evaporated had I not had a wake up moment.
Michelle S. says
We used to be really bad with money as well. I’m glad we woke up and realized it!
John @ Sprout Wealth says
I’ve been guilty of a few of these in the past, especially the student loan one. Another big one for me was putting off investing because I was working on my debt and then afterwards when I thought starting with small amounts to invest made no sense. That said, we live and learn and thankfully am more aware to mistakes now.
Michelle S. says
Yes, I agree – we live and learn.
Holly@ClubThrifty says
People used to make fun of me for bringing my lunch to work too. Like you, I was too lazy to leave for lunch and eating out is expensive.
Michelle S. says
Glad I’m not alone 🙂
kammi says
That “not thinking about the full cost” thing is something I still get caught in. In many countries, the VAT (value added tax) is in the cost already. So if something says $4.99, it IS $4.99! Everyone has certainly made a money mistake also, because it’s common when you travel anywhere (to a foreign country, etc) that you’ll not know the real cost and overspend (being a tourist/out of ignorance, etc). I was overcharged once (years and years ago; I didn’t know any better) because I thought a University was in NYC and took a NYC cab, only to find out the university was actually in Long Island. Needless to say the taxi driver was pissed and I was overcharged. I learned from that mistake, and now I would probably WALK from NYC to Long Island to save the money 😛
Michelle S. says
Aww that stinks about the taxi ride!
kammi says
It was a learning experience for me. My mom is just visiting me and the money is different from the one she is used to (which is a lot more colourful; we always joke that all the money in the US looks the same). She bought a pack of cashews for literally $10 because the lady in the airport didn’t give her the correct change (the price was $3; yes, even overpriced there, too), and my mom had problems sorting through the money. Once she asked me and realized she’d been robbed, she never forgot that, though 🙂
Michelle S. says
Aww that stinks about the cashews! And, I wish money was more colorful in the US 🙂
Michelle S. says
With my first job out of college, I didn’t negotiate. Whenever I look back I realize that I should have!
Amanda says
I’m guilty of taking out too much in student loans and buying things (a car, in my case) because I thought I deserved it.
When I was in school, I almost always got the maximum student loan amount, and would suddenly find $4,000 sitting in my bank account – after my tuition was paid. It was nice to have this security, but I worked a very sweet part time job all by my first year in school. I was easily making more than enough money to cover all of my expenses without this extra money – but I took it anyways. For a while my savings account was hovering around the $10,000 mark – but instead of using that money to knock down 25% of my overall student loan debt, I just spent it… I was unemployed for about a year before I went to grad school and spent all this money in that time. And because I had this “buffer” I wasn’t overly motivated to find a job instead. Not smart! I wish I had done that differently!
As for the car, I don’t regret getting it, but I do wish I would have waited a few more months to save up for a bigger down-payment and thus reduce my overall interest charges. I easily could have managed without a car for another 5-6 months, but I wanted it “now” and therefore am paying extra for that instant gratification.
Michelle S. says
Yeah, that’s how I felt about student loans when I was in school too. I was working full-time, but the money I was making was not great!
Whitney @ EHFAR says
I’ve made some stupid mistakes… spending more money than I had and putting it on credit cards, eating out 2-3 times a day everyday, and while in grad school taking out the full loan amount (instead of just what I actually needed).
For the past year or so, I’ve not bought things because I want them. If something costs more than $20, I won’t buy it. I wouldn’t say that I’m on a budget, because I don’t track purchases (we just prefer not to, because we only buy necessities and that’s all). I’m more conscious of everything, and I don’t run out and buy something just because I can. Some people just don’t understand that I don’t want to spend money on certain things. I’m trying to get rid of my credit card debt finally, and I want to be able to save for high dollar items (i.e. a upgrade to full frame camera for my photography business, certain lenses, studio equipment, more extravagant vacations, etc). All of those little purchases here and now.. add up. Sometimes it makes me feel bad, because I just don’t spend money… people probably think I’m cheap or don’t have any.. I just am focused on being financially responsible. Plus, I also like to spend my money on different things.. not shopping at the mall or fancy dinners every night.
Michelle S. says
We used to eat out way too often. I’m glad that changed!
Stefanie @ The Broke and Beautiful Life says
These are all big mistakes and ones I have admittedly struggled with, especially the “I deserve this” spending. Emotional spending can also be a big problem for people.
Michelle S. says
Yes, I used to emotionally spend all the time when I had my day job. It was my way of coping.
Jason B says
The biggest money mistake that I have made was not getting serious about paying loans back a few years ago. If I did my debt would be much smaller. No reason for me to be mad though, you live and you learn.
Michelle S. says
Yep, you live and learn 🙂
Joe @ Budget Breakaway says
Car maintenance is a big one! I’ve paid more to maintain my car in the last 6 months than it cost to buy it!
This is especially true if you commute long distances.
Michelle S. says
Yes, car maintenance can add up quickly. Thanks for stopping by Joe! 🙂
Candice says
I always used to spend more money than I made. Thankfully I’ve wised up.
Michelle S. says
Good job Candice! 🙂
Kate@GoodnightDebt says
I agree and disagree with #1. I agree because too many people fail to see that ramifications of student loans early. I had too many friends living like kings off of student loans. I’m sure they regret that now! I disagree because I think student loans can be taken out strategically. I intentionally took out extra student loans my final year of graduate school. The market is really tight in my field and I didn’t want to take a job because I had to, I wanted to find the best fit for me. Having a financial cushion made that possible.
As for mistakes, being impulsive is an easy way to wreak havoc on your financial life. Spending more than you earn and buying what you feel you deserve both link back to the inability to say no.
Michelle S. says
I think if you strategically take out student loans, then it doesn’t apply to number 1 🙂 I agree with what you are saying!
Athena says
A mistake I made financially was moving in the middle of my degree. At the time I thought it was the best decision for me ( it was in some aspects of my life), in regards to my education it set me back an additional $10,000.
Michelle S. says
Ouch Athena!
Kasey @ Debt Perception says
I definitely took out too much in student loans. Not because I was buying things with the extra money but just from going to a for-profit school. The loans I took out paid for educational expenses only. Though I did see some people (roommates) use the money to buy flat screen tvs and other semi-expensive things.
Michelle S. says
I made the mistake of taking out extra and partially living off of it. UGH!
Jessica Moorhouse (@MoMoneyMoHouses) says
Definitely agree with the student loan one. I think some people think they need a student loan when they really don’t. University is expensive but I am proof that you don’t need to get a loan to pay for it. There are scholarships, grants, bursaries out there for the taking, plus there’s also getting a part-time job too.
Michelle S. says
Yes, I agree Jessica!
Jeff @Project Ikonz says
My money mistake was not putting more money in my mutual fund during the global financial crisis. Mistakes is one of the great teachers in life. Without it, I will not learn much. How to retire a millionaire without the ability to learn from ones mistakes and to have discipline. How to minimize impulse buying?
Michelle S. says
Yes, without mistakes it would be hard to learn much!
Jack @ Enwealthen says
I love my money mistakes! As long as they’re new ones which I can learn from, and not repeating the same mistakes over and over again.
Paying our taxes this year underscored several money mistakes we made in the last year. But given the circumstances, I’m not upset about making them, even though I knew better. Sometimes you have to make the same mistake twice for the lesson to really sink in.
Michelle S. says
Haha that’s great Jack! 🙂
@WilliamLipovsky, First Quarter Finance says
Pet ownership! More people need to remember that when you buy a pet you are making a serious investment. They demand food, supplies, vet visits, and your time. If dog-related activities take 4 hours of each week and the dog lives to be 10 and you earn $35/hr at work, that’s $72,800 in opportunity cost alone!!!!!!! Don’t get me wrong, I love dogs (my family has 2 goldens) but just be aware.
Michelle S. says
Yes, so many people do not realize the amount of time and work required to have a pet!
Lisa E. @ Lisa vs. the Loans says
I would add – think you don’t make enough to save for retirement. It’s been difficult to convince my friends to do so! You don’t have to max out, just contributing $10/month can make a difference.
Michelle S. says
I agree! A little bit can go a long way.
Ashton @ CreditsPoint.com says
One of the major lessons I had to learn is that a loan or debt costs way more money than any savings account offers in terms of interest. So pay off those debts ASAP even before you think about saving money. About 30% of monthly payments to a modest credit card debt that I had, went straight to the company. I nearly emptied my savings account (that was ‘making’ the same amount on interest every year that my debt cost me every month!) to pay off the debt in one go. Never felt better.
Victoria says
I tend to buy shoes that I either never wear at all or only wear once. I know what I’m doing too. It seems. I have big feet you see: 42 /8 and the shoes that I like tend to be red or pink with soft petals and in size 39/6. I’ve started breaking that habit by buying strappy sandals instead: gold, silver and black. They go with everything!
DNN says
I am guilty of buying things up and taking too long to pay the balance off. I just accrued over $1,000 on one credit account in interest and fees. But it’s been over a year’s time and I am paying that off very soon! 🙂