💸The 5 Worst Unexpected Money Mistakes You Can Easily Make

It’s much easier to spend money than to make it so when it comes to mistakes, most people can’t even identify if they did something wrong or right. It is all dependent on your habits. The secret sauce to getting better at anything and performing at a level where you impress yourself is to stay consistent, patient, and hands-off. Pretending you didn’t get that bonus is better than getting that bonus. Stay away, calm down and look at what you already have couldn’t be said enough.

Think back to the time you first became intrigued about money. We all had that moment, maybe it was back in elementary school when you when up to the register by yourself, bought that ice cream without mommy by your side and delivered the change back into her pocket or made your own un-sturdy duct tape wallet that let go of all that change. If you didn’t have a moment of being mesmerized by money, well, that means you aren’t human becuase deep down no matter how good of a liar you are, we all love it and that’s okay.

Money is our first addiction as species besides human attraction because it has a set value behind it. We believe that this value will provide us certain traits and experiences that can only exist once we acquire that dirty amount. Whether or not you are a finance nerd or an artist, you probably don’t have as a great relationship with money as you would like to.

If you asked anyone on the street right now how they feel about their financial situation or what their portfolio is up to, unless you bump into an egotistical selfish entrepreneur Crypto guy that loves to play video games and day trade all day, which happens more often than not to me in the financial industry, I guarantee you someone honest will say they are iffy and unconfident about it.

So why does everyone feel this way despite having the internet at their fingertips, advice one call away, and fast cable interest powering their lives 24/7 to become the best managers they can be?

Finance is personalized and there is no immediate result to the changes you make today. Even if you bought BitCoin today, you’ll have to wait a few years for it to hit 100k (if it gets there) like the Winklevoss Twins to make your millions. If you aren’t in it for the long game, might as well not play.

You know you should be saving $5 on that coffee each day and instead make it at home to save over $2k per year but why is it so hard to commit to?

We are wired to obtain immediate results. As humans, we want to stay comfortable and cannot see too far into the future.

That brings me to the first money mistake that you have to drop ASAP.

1. Following A Budget

I get it, people have different quirky methods for organizing their life and getting things situated. My friend Seth loves planners and using the wealth management app, Mint(not sponsored) to keep him organized while I use Personal Capital (not sponsored) to plan out my goals with a calendar, no fancy highlighters or stashes of receipts staring at me on my desk all day.

With finance, unless you can identify and prove why something is working, it usually shouldn’t exist. I’ve wasted countless dollars, time in Staples, finding fancy erasers and highlighters, getting frustrated about writing something in permanent ink, and tallying up all my expenses before I buy a sandwich for fuel each day to end up wasting my time on saving a few dollars when that time could have been used to earn thousands or even millions.

I’ll pay you a lot to save my time so when it comes to budgeting, does it save you money?

A budget is only recommended for those who start out with earning and spending money. After that, it is expected and logical that one who has accumulated wealth can retire from the budget. I spend a decent time with wealthy people from college to NYC socialites, socially distanced of course and whenever we go out to eat or shopping, they have self-control to tell them what is worth it or not.

Your perception of money changes when you understand how much work goes into what you’ve earned and how tangibles don’t equate to anything more than a place to store them.

Do yourself a favor. Be more diligent the next time you go to the store. Ask yourself if you can live without that purchase, wait 24–72 hours before the decision and then come back and realize how you’ve become your own mental budget with no pen and paper. I believe you can do it. It isn’t as hard as you think plus for those non-math nerds out there, you save a heck of a lot of thinking and more living. The way life should be.

2. Expenses Leveled To Your Income

When you make more, it is common to want to spend more. This is called lifestyle inflation. But how far can you possibly go? Do you want to continue buying Gucci and Rolls Royces forever? You better work for the rest of your life then. If not, buy what you need, snoop those luxuries occasionally or follow my preference, not at all, and live a happier and more comfortable existence at the same time!

The more stuff you have, the more hassle you have. You ask yourself where are you going to sell it, will it get dusty or will someone steal it. It’s truly not worth it for a short term boost of dopamine. If you are concerned about not proving yourself or having the wrong image, it’s an internal, self-esteem problem you have made within yourself. Trust me, fix yourself becuase luxuries will never fix them.

In order to make an income, you need to spend less than you earn. Simple but hard for most until it is routine. Millionaires save on average 80% of their income and reinvest that money back into the market, fix that fixer upper, buy that valuable course to make them more money through education, and let the money stay invincible, never entering their minds that they can spend it. If you get a chance to meet or spend time with millionaires, happy to chat, you will realize and I hope you have from my posts that we are the most frugal people you will find. I will never spend more than someone with less than me and wear the same clothes each day becuase I have better things to worry about. Spending money should only be a sliver of your income. Keep them separate and you might even be able to ditch that job you always hated as well.

3. Not Opening a Roth IRA

Who want’s free money? 4 years ago I was eligible to open my first Roth IRA since I was finally making a suitable income of over 5k per year to invest into my compounding machine fund.

If you don’t have a Roth IRA and earn under the income of $125k, what are you waiting for?

There are no upfront costs besides 5 minutes of your time for endless rewards. That sounds like a deal to me. To make the process even easier, set up automatic withdraws from your salary to get those funds directly reinvested into the market so you can take advantage of the compound interest all the time. No wonder there is a cap on how much you can invest or else my whole portfolio would just be in the Roth IRA!

Starting earlier than later with almost everything, including this but except driving is always your best bet. Since 4 years ago, my balance is already 80k without doing much work just waiting. Think about how much time you spend in traffic, watching TV, scrolling through social media and the rest of the junk you feed your brain. We waist an average of 400 hours per year frying our brains that will get us backward. You can take 3% of that time and spend it on opening a Roth IRA. Will you?

The Roth is like any other account except for no penalties or fees up to a certain age when you want to withdraw. Personally, I have my money tracking the S&P 500 index ETF and I’m set until I want to withdraw in retirement or so. Nothing fancy, already complete and happy.

I’m one to always think about FOMO. What if I had started contributing to this account a few years earlier? I could easily have more than $40K, if I had enough income to support myself which in my case, earning $5k per year as a 13-year-old isn’t impossible but I’ll say is hard to do. But you know what I mean, earlier the better! What are you waiting for?

4. Saving Affects Your Lifestyle

Just like with budgeting, the more time you spend planning out and trying to question if each purchase is good or not takes away time for you to better yourself in more useful ways that can make you a lot more money in the long run. This includes: educating yourself, enjoying and appreciating what you already have, and curating long-lasting friendships that can easily skip the interview process to land that new job.

Budgeting is a trendy, fancy, and fun thing to do especially when you are young and trying to get a grasp on what it means to start spending but it can easily go overboard and be a time bomb.

It’s rare that you will find a college student who has a good relationship with spending. It’s more likely that they either have an unhealthy relationship with spending or an out of this world one addicted and with a best fake friend who is the receptionist at Louis Vuitton. Instead of trying to meticulously save, take advantage and be creative of what you already have. You don’t become wealthy by being ordinary. Find what you are good at and prioritize. The average household has $500 worth of stuff they could sell and or use each day of the year.

I’m sure you haven’t worn every piece from your closet or tried making your own cold brew. You’ll be amazed at what you can do when you take some time to think a little instead of doing complex algebra through discounts and price nagging at stores.

5. Not Waiting & Taking A Breath Before A Purchase

I learned this hard lesson from my grandpa. To this day he refuses to buy anything for me until we wait at least a week. You don’t have to be this extreme unless you want to become an ultra millionaire like he is, ironically, but to slowly build up the ranks, I suggest waiting 24–72 hours. That’s always my go-to.

If you want to become poor, buy everything you want becuase your friend is getting it. But of course, just like with budgeting and saving, it is easy to go overboard fast and cross the line of addiction than staying in the healthy zone. Obviously, necessities such as toilet paper to groceries don’t have to wait that long but at least plan on knowing what you are getting before you enter the store. Stores are all about marketing schemes, showing off, and like to fool customers but spread fake love at the same time of course. We’ve all fallen victim to buying something we don’t need becuase it’s promoted in fat shiny letters.

They display certain items on purpose and the more lucrative items there are, they get the best shelf space (real estate). Don’t be fooled by this. I’m not saying wear a blindfold that horses wear to cover the sides of their eyes in case something scares them or they notice a snake and jump, but be aware that this is done on purpose for you to spend more of your precious money that you need to keep to yourself.

Just becuase there are free samples, sales or something is gleaming in lights doesn’t mean it will serve you. It means you are more skeptical and gullible. It will only serve others for a day or so who buy it and then have to deal with what you had the guts to skip.

Bigger items such as booking a trip, car, clothes to luxuries qualify as bigger expenses becuase not only they should not be transacted daily, they are a large percentage of our income. I would suggest you dedicate at least 72 hours for. And trust me, there is never a shortage. If there is, it usually means you shouldn’t get it anyway. Don’t worry, it was probably for the better.

Finance is tricky because you want it to be and spending is something we rarely talk about because it is personalized and private. I hope these tips can help you become the best boss in your own finance journey and lead to more success in building a reputation you are proud of. You don’t need to tell anyone what you are doing or prove your worth. That’s why I’m here. It’s just a game that needs to be followed and played strategically. Follow the steps, the money will reward you.

I hope you learned something.