14 Money Mistakes to Avoid To Secure A Better Financial Future

By Kristie Gilmore

My dad worked in a steel mill.  There were times when money was really good and other times when he would go on strike or get laid off from work.  One time, he was laid off for 8 months.  My parents had to budget and save their money for times when his work wasn’t as good.

So it was only natural they taught me to be good with money.  It’s also good that when I would get money, I would hold onto it.

Yet, sometimes life would throw me a curve ball or I wouldn’t be as diligent about my money and I would get in a little of trouble.

While I have had just about every kind of debt out there (credit card, student loan, car loan), I have paid it off in half the time I was supposed to by being frugal with my money and paying more than the minimum payment.

Being in debt, has taught me to be better and diligent with my money.

I have a blog called Enjoying Simple Luxuries to share my tips and tricks about getting out of debt, saving money and investing for the future.

I wouldn’t have been able to create and grow this blog without the Billionaire Blog Club. We now have other 300 members, including Jasmine Golden, the owner of this great blog.  Our mentor Paul Scrivens, is a No BS blogger who is always available in Slack for any help and guidance.  Check out his free 12-Day Blogging Bootcamp.

Let’s Make Sure You Don’t Make These Mistakes

Ever wonder where your money goes?  It especially seems to vanish quickly at the end of the year with the holidays.  In today’s world, it is way too easy to spend money.  Afterall, we don’t even need to carry cash anymore.  We can practically purchase anything with a simple swipe of our credit card.

However, learning to balance your short and long term financial goals is an important skill.  For most of us, a new year means a fresh financial start.  It’s not only crucial to set goals but also know what not to do during this next year.  In avoiding the following mistakes, you will set yourself up for financial success.

So let’s dig right in and here’s what you are NOT to do…

No Emergency Fund

There’s no excuse for not having an emergency fund.  The longer you go without your safety net, the more you put your financial future at risk.  You should have 3-6 months’ worth of living expenses stashed away into your savings.  You can even setup an automatic withdrawal to go into this account every paycheck.

Then, don’t spend this fund.  It is only meant for if you have an unexpected bill, like you have to replace a flat tire, your water heater or your furnace stops working.

If you pull any money out for an emergency, then make sure you put it back.

By having an emergency fund, you will not have to resort to using your credit cards or taking out a loan, thus putting you in debt.  Otherwise, you set the stage for a bad financial year.

Over Subscribing

Too many times people want to save money but they are oversubscribing.

For instance, do you have a gym membership?  Are you subscribed to Netflix, Hulu and a cable/satellite TV service?  In today’s world, you can exercise at home and stream TV while saving you $50-$100+ dollars a month.

These costs add up quickly.  There are cheaper alternatives to any of these types of things so don’t fall prey to oversubscribing.

Not Asking For Discounts

Many of your bills can be negotiated at lower rates, even with your big companies that offer you loans and insurance.  You just have to ask.  What can it hurt?

Keeping Too Much Money In Checking

It’s always a good idea to keep $500-$1000 dollars cushion in your checking account, but this isn’t your savings account.  So don’t treat it like it is.

With a decent savings account, you can earn a little interest off the money you saved so put your money into this type of account.

Spending All Your Money

Do you spend money on things that really don’t matter or things you don’t need?  Ever wonder where your money goes after payday?

The secret to achieving your financial goals is saving money.  Yet, you can’t save money if you spend all of it.

Use your dreams as your motivation to save money. What do you want in life?   For instance, do you want to be able to send your child off to college without any student loans, or buy a house?  Then, these should take priority as your financial goals.

You may think you will not be able to save enough money for your financial goals or dreams.  However, you can find more ways to save money by cutting back on what you spend.

For instance, do you really need to stop at Starbucks’ every morning to get your coffee before you head to work?  Instead, make coffee at home, put it in a thermos, and take it with you.

You’ll not only save money on the gas it takes to get there but also save money on your morning coffee.  Now, this may not seem like a lot but when you are saving money, every little bit helps.

You Think You Don’t Need A Budget

If you want to get on top of your finances, you need to know what money you have coming in, what bills you have, and how you are going to pay them.

A good way to save money or get out of debt is to create a budget.  This is a MUST HAVE!!!  However, it needs to be a budget that works for you.

The 50/20/30 rule works great for most people. Here’s how you break it down:

  • 50% to Essential Expenses (things you need to live and get to work)
  • 20% to Financial Priorities (savings, debt, retirement)
  • 30% to Lifestyle Choices (basically, your “fun” money)

Mobile alerts can help you pay your bills on time.  Using online tools or making spreadsheets can help you stay on top of your finances.

Once you create a budget, then just track your spending to make sure you are not overspending.

Not Contributing to Retirement

Putting off saving for retirement is a common problem.  People don’t save for a couple of reasons.  First, it feels like it’s a long time off from now.  However, before you know it, it’s here.

Second, people don’t start contributing to their retirement fund is that they have just enough money to live on and feel they can’t save any money for investment.

It’s a rare thing to have a company pay a pension to you these days.  If you do, it’s so small that it isn’t really much to live on.

Today, Generation Xers, Millennials and younger age groups will most likely not have access to Social Security.

For this reason, you have to start putting more away into your retirement fund.  If your work doesn’t offer you a 401k or retirement plan, then you still need to find a retirement plan to invest your money.

The sooner you start the less you have to save because of the compound interest.  In other words, you invest money, it earns interest, you then invest that additional money.

Keep this up over numerous years and you will not have to save as much as someone who is 40 and just starting to save for retirement.

You will want to save at least 15% of your income each year for your retirement.  If you can’t make that full amount at first, that’s okay.  Something is better than nothing.

Most employers will match a portion of your investment.  Take full advantage of these types of offers.

For instance, my employer will pay 10% of my income so I only have to invest another 5% a year.  Every time I get a raise, I take half of it and apply the percentage to investing more into my plan.

Investing Too Conservatively For Retirement

It’s good you are investing for retirement.  It’s a good start but you are not done yet.  If you are not investing it wisely, you are actually hurting yourself, especially in the end.  Moreover, if you invest too conservatively, you will not have enough money to live through your golden years.

I’m not saying you have to invest very aggressively.  However, since you will be investing for retirement for 30-50 years then it’s going to pay to be more aggressive.

This means you can’t be afraid and shy away from stocks.  While they are risky, they outperform any other kind of investment—by a long run.

If you don’t invest in stocks, you will need to save much more money for retirement if you invest too conservatively.  In doing so, this means you have less money in your budget to do other things.

You do want to find the right balance to your portfolio.  Depending on your age, you should always invest your money in stocks, bonds, IRAs and so on to help balance out the risks.

Just remember markets fluctuate so if you have a month or year that doesn’t do as well, don’t pull all your money out.  To see a return in investing, you have to stay in for the long haul.

No Plan For Getting Out of Debt

You need a plan to get out of debt.  Don’t think you can just wing it and miraculously be debt-free.  It doesn’t work that way.

First, you need to create your monthly budget.  Then the next few steps for actually creating a plan to get out of debt are as follows:

  • Don’t spend more than you earn
  • Decide how much money you are putting towards debt each month
  • Figure your debt-free deadline—the day or month you can have that debt paid off

It’s good to set a deadline because you give yourself a goal and when you accomplish it, then you will not only be better off financially but also feel great yourself.  As long as you stick with it, you should be able to meet your debt-free deadline in time.

Carrying A Balance On Credit Cards

It’s all too easy to rack up credit card debt.  A dinner here, shopping, vacation, or going out with friends a few times a month adds up.  Before you know it, the minimum payment is a good part of your paycheck.  On top of that, the interest charges take even more money from you.  Therefore, you are not able to save toward any other financial goals.

Having credit card debt wreaks havoc on your finances.  If you want to come out ahead or get a control of your budget, then STOP using your credit cards.

Pay your credit cards on time and pay more than the minimum monthly payment.  Once you have a good amount paid off, then call up the credit company and try to negotiate a lower interest rate.  If they see, you’ve been doing well paying them back, they just may lower it for you, but you have to ask first.

If you find yourself relying on your credit cards for everyday living expenses, then it’s time to take a harder look at what you are spending.  Then, you will want to cut purchasing some items and put this extra money towards your credit card balance.

Not Understanding Your Credit Score

Your credit score lets lenders know how responsible you are in paying back previous debt.  You can see your credit score by getting your credit report yearly.

These two items will determine whether you’ll be eligible to get loans and low interest rates that will save you thousands of dollars when you have to borrow large amounts of money in the future.

Here’s some steps to take to improve your credit score:

  • Pay your credit cards and loans on time every month
  • Use 10-30% of your available credit
  • Obtain your credit report at least once a year
  • Fix any mistakes on your credit report

Spending Too Much For A House

It’s natural to want the biggest or nicest house on the block.  However, think twice before you purchase it because you will want to make sure you can afford the mortgage payment and property taxes.

Your housing costs should never go over 30% of your net pay (or the money that is left that you take home).  Yet, you may have to go lower than 30% of your income because you will also need to save a percentage of money for when things break in the home.

If you take on too much house, you will not have any money to pay your other monthly bills or any repairs the house has in the future.

When buying a house or taking out any other kind of loan, do the math to make sure you can afford the loan when it comes due.  Afterall, you don’t want to jeopardize your financial goals.

Having No Plan in Place If You Get Sick

What happens to you and your family if you get seriously ill?  It’s always important to buy an adequate life insurance, long-term disability policies as well as making a will.

The insurance policies will help your family pay mortgage and other expenses, if something should happen to you.  Most likely, your family will need the money quickly.  Yet, not having a will, the money you intended to go to your family could be tied up for years.

By having a will, you decide who gets the things you own upon your death.  If you don’t have a will, the state determines who gets what and they don’t have to listen to your requests.

In addition, having a will, you get to determine who is your children’s guardian.  Do you really want to rely on the state for this?


Learning to balance all of your financial goals is an important goal.  Making the above money mistakes make it harder to reach those goals.  Avoid some of these mistakes to set yourself up for future financial success.

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