What up fam! Wouldn’t it be easier if we always learned from other people’s money mistakes so we never had to make our own? What an idyllic situation that would be. Unfortunately, we all make mistakes along our journey, and I’m no exception. I share this today with the hope it will help you avoid these money mistakes in your own life.
The Top 6 MAJOR Money Mistakes I Made (so far)
1. Not starting early.
I didn’t start investing in my retirement accounts from the beginning. I came to understand the importance of retirement savings MUCH later than I’d like. As we know, retirement funds take time to grow, and those years of minimal investing will impact how much money is available at retirement. I wish I could time travel back and explain compound interest to my younger self. I’d like to think she’d understand and kick it into a higher gear.
2. Not having a clear career plan.
Listen, I don’t think it’s necessary to have the next 10 years planned out. I do, however, think it’s helpful to have some goals and an idea of where you’d like to end up. Instead, I meandered through my first handful of working years. I did a good job, don’t get me wrong. But I wasn’t proactive in looking for new roles or researching industry salaries or thinking through future possibilities. I don’t have any regrets, but I can only guess I’d have enjoyed having a little more purpose earlier in my career.
3. Not tracking my expenses.
I only started tracking my expenses within the last 5 years. The clarity and insight I receive every month when I review my expenses is IRREPLACEABLE. I love the phrase, “if you track it, you can control it”, because not knowing where my money was going caused some major money anxiety at times.
Tracking my income and expenses allows me to understand my annual trends, and gives me a picture of where I’m spending my time and energy each month. (Vicki Robin calls it ‘life energy’.)
4. Forgetting about home maintenance cost and time.
The first home I bought was on the lower end of the price scale, thankfully. But, I didn’t take the weekly, monthly or yearly maintenance into account. I forgot to consider the monetary cost AND the time it would take to keep up the house. Even in a low cost of living area, maintenance adds up. And a bigger square footage home requires more time for upkeep. Learn from me, friends. Be reasonable in what you can manage.
5. Taking out car loans.
I always prioritized and paid off the car loans as quickly as I could, but now I realize there are better ways to handle car purchases. A suitable, reliable car can be purchased easily in cash for a few thousand dollars, and then driven for a long time. From a financial standpoint, that certainly feels better than constantly paying the bank back each month for the nice SUV.
6. Not having a financial plan or a goal.
For so many years, my goal each year was to spend less than I made. A worthy goal, but fairly short-sighted. I didn’t ever define my “why”, so I had trouble understanding why I even NEEDED another goal. I could have shaved years off my working years by being proactive with a goal. I could have saved for a rental home or invested in index funds. Instead, I took it day-by-day and missed out on some great growth years.
In some seasons, day-by-day is all we can do, and that’s fine. But in some seasons, looking ahead to the future and having a plan in place is the thing that will make the most impact.
What mistakes have you made in your financial journey?
