Money Mistakes

ways to save money

I need help in understanding something. How is it that people keep making money mistakes? Are people slow learners?

I mean there is a wealth of information out there on how to make a budget, how to save money, how to not spend money, and so on.

So how is it that so many people get themselves into personal financial difficulties?

I can’t help but think that we start out from a young age not really understanding how money works. We don’t know how to save for purchases let alone save for retirement. A lot of us follow the example that is set by our parents.

One of the best things a parent can do for their kids is show them your paycheck. Show them the gross income and the net income. Explain where all the money goes.

Do you want your kids making some of the same money mistakes you have made? No, of course not.

Don’t Believe the Bank

One of the other reasons people make money mistakes is that they listen to their banker when it comes to borrowing money for large purchases such as buying a home.

The bank loves to lend money. This is how they make money. They will tell you that you can afford a more expensive house than is probably true. They are not taking into account all the extra expenses that seem to appear with buying a house such as a new furnace, rising utility costs and the new fridge you all of a sudden need.

So maybe we should aim for spending about 25% of our income on housing, not the 30 to 33% the bank says is okay.

High Interest Car Loans

And if you still have a high interest loan on a vehicle that is 5 years old or older what the hell are you thinking??

But this is the only way I can afford it, you cry. No, not really. You are probably paying a high interest rate on a used car that now has no warranty left on it. It makes no sense.

You may be better off using a line of credit with a lower interest rate to pay it off or better yet don’t have a car loan at all!!

We really should know better than to make these really silly money mistakes.

What money mistakes have you made?

Have you learned from them?

Please share this post and share your thoughts and tips in the comments.

Thanks and have an awesome day.

Live simply.


24 thoughts on “Money Mistakes

  1. Gosh, I really love your posts! I agree with you about the lack in education. I also think that our society has a “more is better” mentality that has not been combated on a large scale. What happened to the days of darning socks?

    I made many money mistakes but the big ones were: Maxing out both my husband’s and my consumer credit cards, not paying back my student loans as I was taking classes, starting an emergency fund.

    We realized there was a fork in our future and had to choose the best for us. We banished consumer debt, are going to have no student loans in 3 years, have established savings, retirement funds and an emergency fund. I’m pretty proud of our team work in this endeavour and managing larger amounts of money is simpler as we save more.

    I wish your readers the best in their money journeys. 🙂


  2. I agree with you that many of our money mistakes are entirely preventable, but I squirm a bit with the tone in this post – people in financial trouble are already pretty defensive, I don’t know that this tactic would really help matters.

    That aside, I’ve noticed a recurring problem with schools/advisers/laymen telling people coming out of college that if we can’t find a job we should just take out loans and go back to school. No. Just… no. That’s not responsible and is setting us all up for failure.

    Once I expanded out of my hippie minimalist broke people social circle, I realized that there really is all of this pressure to have a full wardrobe, a nice car, a good, clean, and fully furnished home. But no one talks about savings or retirement or how awesome they’re doing staying on budget because these aren’t the things that seem cool or admirable to most people.

    1. Thanks for the reality check. I have a tendency to take a “tell it like it is” approach. I need to be a bit more forgiving and less preachy. I get on a roll sometimes and just go where the words take me.

      Thanks for the heads up and for the excellent comment.

  3. If you don’t have enough money there are only two things you can do. Find a way to make more, or cut your expenses. In this day when jobs are difficult to find,the first option might not be available. And the cutting of expenses seems alien to so many. Friends whine and moan about their financial situation, but still go to out to fancy dinners and buy outrageous items because they “deserve” it. Some how they’ve missed the message of how peaceful it is to be financially responsible. Enjoy your column. Thanks.

  4. We are a bit gullible aren’t we? We can be convinced we need many things in order to have a fulfilling life. I think most of us try really hard to resist, and some of us are better at it than others.
    I often feel that marketing has become a lot more devious in their advertising too. Telling people they can save so many dollars by spending so many dollars, I cite energy efficiency products with pay backs over a period of time and similar situations. Not to say that these things cant result in money in your pocket over the long term, but many people do not do the research first to find out. Again the lack of education as you mentioned.
    As for myself, I am guilty of buying the car. Thankfully I have 0% Financing, and I purchased an extended warranty which means I will still have the warranty while paying the car off. My disappointment and regret comes from the fact that today I am still paying off a car which is worth less than I still owe.

    1. Well at least it is 0%. If you plan on keeping the car then it is okay. Don’t over think it. What’s done is done.

      Ah yes the “spend 25$ and save 5” or BOGO’s. How about we just don’t spend at all.

  5. I love your comment about how one of the best things a parent can do for their kid is show them their paycheck. Show them where the money goes.

    It felt like a foreign concept when I read it because I was raised with the idea that how much money someone makes, including my parents, was none of my business and it was incredibly rude to ask. It would’ve been great to actually see and start learning about that as a kid.

    If I ever have kids, I want to start teaching them about that at a young age.

    1. I have shown my son and explained it all to him. He is 14 and seems to get most of it. My parents seemed to be the same way but they were really good with money. Paid their house off early and back in the 80’s the interest rates were at 18%!!!! And that was with one income. My mom was a stay at homer

      Now people can’t afford their houses with 2 or 3% mortgages with 2 incomes.

  6. I agree with most of what you said, but I would add giving children a chance to have their own money and budget it when young. I gave my boys $5 per month when they were only 2 years old. If they wanted to buy something I reminded them that the cost plus tax would equal this much and would leave them with X amount left. Then ask them if they wanted it. It helped them to make decisions, while little decisions, from an early age. Although my youngest would try to save his money by asking me to buy it so he could save his money for something he might want more. Never worked by the way, so his most common behavior was to hold his money all month until he received next months money then he would spend the first $5 holding the new $5 for the next month. He never wanted to be broke.

  7. Thank you for this post! I think you wrote it for me. I’m one of those who keeps making the same mistakes over and over again! I’m so tired of the roller coaster: getting in debt, paying the debt, getting in debt… Fortunately, I think I’ve arrived at a point in my life where I realize that I need to get off (the debt roller coaster) and if I am smart about it, I know I can.

    1. Well you are not alone and the first part of finding a solution is realizing that there are improvements that can be made.

      Start be keeping track of your spending and just making small changes. You can do it.

  8. Love it! You know it’s amazing but not that long ago people did have a grip on their finances and in only a generation or two we’ve totally lost sight of how things should work. My great aunt and uncle (who was a WW2 vet) never borrowed money, never had a credit card, never had debt, in fact never even used a debit card – I think my mom said he was hesitant to even write a cheque! Now that exact lifestyle might not be totally realistic now but the principle is, they never bought anything they couldn’t afford – if they wanted something they saved up for it and paid cash. Now the exception might be a car (although one could argue you COULD save up for one of those, many do) and housing – although real estate is grossly over priced right now, in my neighborhood a condo goes for at least $300k, and that’s just a condo! They say houses in Vancouver are going down to $600k from $700k.. I can think of a lot of things I would rather do with that much money – and as nice and ideal as home ownership might be I just can’t fathom how a building could possibly be worth that much, because in reality it isn’t. The greed of the market drove the price of housing up all over, but that doesn’t make the actual physical buildings worth their price tags in reality – renting doesn’t seem so bad when you consider the freedom of that having extra disposable income offers. You are a lot more free to manage your budget wisely when you are not encumbered by an over priced property.

    1. So true. Here on the east coast the price of property is more reasonable but that is a relative term. The incomes are not as high here as other places. The house prices in Halifax are going up and in a few other areas as well.

      I was with my best friend today and his wife called and said the hot water tank gave up and there was a flood etc etc etc. I was thinking to myself thank goodness I rent. I have owned houses but only ones I could afford.

      And you are so right about just a generation or two ago. It is just too easy to get credit and to go into debt. Hell college students are given credit cards when they open a new account. Not a great way to begin life on your own; going into more debt than just student loans.

      1. On the west coast of the U.S., housing right now is cheap enough that if my husband and I can put 10% down (which we should be able to do next year), we will actually be paying $100 to $200 less per month on the mortgage than we are on rent right now. I’m sure there will be other expenses that will take that money, but at least when we are done living there, we can sell it and get some of the money back.

        It’s definitely too easy to get into debt now. I have hefty student loans to pay off (that I’m ahead on, but not by enough to pay them off soon). I have a credit card with a $500 limit that I haven’t used in months. Someone told me while we were out to dinner together that I should be putting my meal on a credit card (to avoid potential fraud) and looked aghast when I told her that my husband doesn’t even have a credit card. Thanks for the great reminder!

  9. I love this post. And what a coincidence that I was at the bank re-negotiating my mortgage. They were trying hard to get me to re-finance in a way that would put me in more debt!! I said no thank you!

  10. Oh yes, have I made money mistakes! I remember the day I got my first credit card. I was young… I went to the store to buy makeup that I didn’t need just to see what it felt like to use a credit card. That was my first mistake! That is where it all went wrong! Later on in life, I had so much credit card debt because I lived beyond my means. I dug myself out. I didn’t learn though and I got into debt again. Dug myself out. And yes, that wasn’t enough. I got into debt one more time! I know! Crazy! It took 3 times for me to learn. You know how it is – you want what you want when you want it. Some of us have to learn the hard way…

  11. The “secret” to guaranteed and lasting wealth: spend less than you earn and save/invest the difference. Ten words to solve the entire world’s financial problems.

    It certainly is not rocket science, but unfortunately it is wholly incompatible with our global culture of self-destructive consumerism…

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