Top 9 Not So Smart Money Moves and What You Should Do Instead

Let’s face it, we have all made stupid mistakes regarding money and wealth, even you. I’m sure you didn’t do them on purpose. In fact, I believe that if you knew better, you would actually do better.

So let me clue you in to a few of the mistakes you may be making without even knowing it…

  1. Not having clear financial goals

    If you do not know where you are going, you may never get there. It is so important to have your goals laid out and to tell them to someone. If you are married, being on the same page with your spouse regarding your goals is important as well, even if your goals are not the same as your partners. If you are not used to setting goals regarding your finances, then start small. You can set a goal for a week, a month, or a quarter and track your progress regularly (daily is best!). Once you get used to setting and hitting small short-term goals, you will not be afraid to go for the huge goals that will get you huge financial results.

  1. Not having a spending plan

    A spending plan is another way to say budget. Some people stay very far away from that word, budget, because they think it limits their ability to get things they want or take vacations. However in reality, if you do not have a spending plan, you run the risk of spending more than you actually make and that spells disaster for your finances. Put together a plan that includes your regular living expenses, recurring payments, money you plan to save, and you can even build in entertainment, vacations, and rewards for yourself. You will be amazed on how simple it is to actually follow a plan.

  1. Buying “stuff” to feel good about you

    If you do get some of your self-esteem from what you have or what you drive, that thinking is probably not really your fault. Sometimes parents instill in their children that if they are “good” then they will get a gift or reward. If that was you, then your self-esteem is probably tied to the type of car you drive, brand of clothes you wear, and how much your jewelry or watch is worth. While it is nice to live the good life, having your self-esteem connected to your possessions means you will consistently have to buy more and more stuff just to feel good about you.

  1. Starting to save large and late vs. small and soon

    One of my favorite quotes is “The best time to plant a tree is 20 years ago. The second best time is today!” It’s funny how building wealth and planting trees is so similar. If you are young and reading this, start now! You can take more risk with your investments and see higher returns over time. If you are “not young”, start now. Seek the advice and help of a professional who can guide you towards making a great plan to get the best interest rates. And remember that you can start small. You do not have to have an investment portfolio; you can literally start with a savings account.


  1. Buying things on credit that depreciate in value

    I am talking about cars, clothes, furniture, or anything that you charge to your credit card and then don’t pay off at the end of the month. I have a friend who never buys a new car. This gets covered below. It’s not that she cannot afford to purchase a new car, but honestly she hates knowing that once she drives it off the lot, it automatically goes down in value. For her, that is enough to keep her shopping for the best used car she can find. And she typically drives nice cars; they have just been owned and well-taken care of by someone else before she gets it. Buying something used is one way to buy things that drop in value and not over pay. Another is to save the money first. If you paid cash for what you want, you would never have to worry about interest payments and how they really skew the price you pay for those items.

  1. Not taking advantage of free money

    Cash back on credit cards, instant rebates, coupons, etc.….these are all ways to use free money. But what about your employer match on a 401K account? So many people do not take advantage of opportunities like this because they don’t want to put their own money towards it or they don’t want to be bothered with the paperwork however if your employer is matching your contributions at all, you definitely want to take advantage of this perk. You can later roll that money into a self-directed IRA account and really have that money work hard for you.

  1. Buying a new car

    Obviously I already mentioned this above in #6 on this list, but it was worth a mention all on its own. New cars lose value as soon as you drive them off the lot! Please remember that. It is simpler these days than ever to actually get a very good, certified, well running, gently used, well-loved, pre-owned vehicle. Do your research and you will find your dream car even used and it will not cost you an arm and a leg, you will pay it off sooner, or you may even get such a great price that you can buy it with all the money you will have saved up by following these suggestions.

  1. Buying more house than you need or can afford

    Live within your means – it’s as simple as that when it comes to your home! Bigger is not always better or nicer if you can’t afford to live life, or if you become a “slave” to your house payment. Smaller or more modest homes are just as nice, and sometimes nicer, than huge houses. Plus, the bigger the house the more you have to clean, pay for electricity, pay higher property tax, etc. Assess what you and your family really need to be comfortable in your home and how much you can really afford and stick with that. You will thank me later!

  1. Not protecting your good credit

    Although I advocate saving money and purchasing things for cash most of the time, you really cannot purchase a home or do other things in life without a good credit rating, and a GREAT credit rating is even better. Take care of your credit early in life and do whatever it takes to keep it maintained. Pay attention to it, sign up for a free credit monitoring service and take a look at it regularly. Take classes, read books, or look into websites that teach about credit. If your score is low or not where you want it to be, find out how to increase it. You will be surprised that it is really not that hard to increase your credit score little by little, and over a short period of time you will have improved your credit rating once you understand your current situation. A great credit score can literally save you hundreds of thousands of dollars over a lifetime.

I also love this quote by Maya Angelou, and it really fits here.

“Once you know better, do better.

Now that I have clued you in to some of the mistakes you may be making and how to remedy them, you now know better. You can’t turn back now! What action steps can you take today to correct these mistakes? If you are already doing the things I mentioned above, then congratulations. You are well ahead of the curve of wealthy building and set for a positive financial future.

~Renee Cermak

“World peace rocks, and so does being rich.” Mike Dooley

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