We all make money mistakes. I have personally made tons of them and often write about them as a way to show other people that they aren’t alone. Most of my own money mistakes were from a lack of maturity or a lack of planning, but that doesn’t mean that they were excusable.
So, in an effort to help others, here are examples of two common money mistakes and how to avoid them.
1. Failing to Pay A Credit Card Bill on Time
I prided myself on never missing a credit card payment. I mean, my history was perfect in that respect even though I had credit card debt and even though I’d suffered through some hard times.
Then, one day, after five months of being credit card debt free, I went out to eat and forgot to bring my debit card. I had put it with my ID card in a smaller purse the day before and neglected to grab it. So, I paid for the meal with my credit card intending to pay it off right away.
However, because I was credit card debt free and completely out of the habit of paying the balance and checking my card, I forgot about it entirely. It was so unlike me, and when I realized it, I was really sick to my stomach. It wasn’t that I couldn’t pay for it. I just didn’t. I hate that I have a blip on my credit report for something so stupid, especially after all of my hard work of becoming credit card debt free.
However, an easy way to avoid it would have been for me to check my cards every single month, regardless of the fact that they had a zero balance.
2. Spending More than You Earn
This is a pretty classic money mistake that a lot of people make. For example, I had some crazy expenses in January. I went on vacation, which I saved up for ahead of time so that was fine. But then, when I got home, I had car trouble for the second month in a row, which was a nice $500 fix. You’ll notice these things always happen after you take a nice vacation thus making you never want to take a vacation again.
In the end, I spent more than I made in January for the first time in a long time. However, I had a nice savings account to back me up. So there was no going back into credit card debt and there was no major stress (just some annoyance.) All I need to do is build up my savings cushion a little bit again, and we’re back in business.
Ultimately, January was a far cry from November, where I saved a whopping 60% of my income. However, that’s why I try to save year round so that the good months of saving compensate for the bad. It’s hard to avoid unexpected expenses but because everyone has them, there’s no excuse not to have an emergency fund or a general savings account.
What are some inexcusable money mistakes that you’ve made and how do you avoid them?