Money Madness: Financial Mistakes You Might Be Making And What To Do Instead

What has been your biggest money mistake? If you’re anything like me, you have a few you can pull from, and that’s nothing to be ashamed of!

However, I also hope that for each mistake you’ve made, you’ve been able to use it as an opportunity to learn, and make new, smarter decisions.

My intention with this post is to help break down some of the taboo around money and talking about money; taking away the control that money often has on us.

Here are 7 financial mistakes you might be making, as told from mine or my client’s perspective, and what my advice is for approaching the situation differently.

Taking a cash advance from a credit card and only paying the minimum payment

I was about 26 years old when I got my first credit card. I was so excited! It felt like extra money and I was happy to just go out and buy the stuff I always wanted to have.

When the bills would come in each month, I would review them and would simply zero in on the “minimum payment required” line.

In retrospect, things were already out of control at that point – I didn’t know how much I was spending, how much I was making, and I didn’t have a budget.

One particular month, the minimum payment was $29 and I realized I didn’t even have $29 to make the payment, so instead, I went to the ATM and took a cash advance of $40 from my credit card to pay off the minimum.

The lessons from this mistake:

Don’t take a cash advance on your credit card and don’t just pay the minimum payment! When you take a cash advance on your credit card, your interest payments are much higher, and the interest starts incurring immediately, rather than the (approximate) 21-day grace period that is normally afforded to you.

Beyond that, if you rely on only paying the minimum payments, you are never going to be debt free. Or at least, it will be years before you are.

Recognize that you should have the money in the bank, or coming in that month, before using a credit card. It’s not free money, in fact it’s very expensive money if you cannot afford to pay the credit card bill by its due date.

Not negotiating my salary at a job

I’ve had a number of jobs over the years, it never occurred to me that I could negotiate the salary that was offered.

I would just take whatever they offered me and would be so grateful for the fact that they wanted to hire me.

A couple of years ago, I spoke to an HR executive and they mentioned that the best time to negotiate salary or benefits is actually when you’re first offered the job. You have the option to come back with a counteroffer, or at the very least to say, “is this open for negotiation? Can we talk about this?”

In fact, often, companies expect you to negotiate, and their first offer is representative of that (meaning it is lower than they are actually willing to give)!

So, if you are currently looking for a job or in the process of being hired, please take the time to consider the offer given. Ask questions like:

  • Is this really what I am worth?
  • Should I ask for more?

The lessons from this mistake:

Don’t be so quick to accept the job offer as it is! Think about it and understand that you do have the option to negotiate your salary so that it better fits with your lifestyle. Stand in your worth!

Unnecessary ATM charges

Do you know how much money you spend on ATM charges? I challenged one of my clients to keep track of their ATM charges over a month, and if you regularly use ATMs, I would encourage you to do the same!

When you use an ATM, you generally are charged a couple fees:

  • The first is called a Network Access Fee. This is the fee that your bank charges you when you use another bank’s ATM or any ATM that is not owned by the bank. These fees are usually between 50 cents and $2.00.
  • In addition to that, the bank where you use the ATM will charge you a convenience fee, for the (you guessed it) convenience of using their ATM. These fees can range anywhere from $1.50 to $5.00.

If you do this a couple times a week, it easily adds up! In the case of my client, he was spending $46.00 per month just on ATM fees. If this continued over the year it would result in $552 of lost money!

These fees are almost totally avoidable. Most banks, if you bank with them, give you the opportunity to use their ATM for free (or at least a certain number of ATM transactions will be free).

The lessons from this mistake:

Only use the ATMs of the company you bank with. Stop giving away more money than you have to! With just a little more planning and structure in managing your money, these charges are completely avoidable.

Buying things you don’t need

If you were to go through your closet or house right now, how much money could you tally up on things that you no longer use, things you meant to return, or things you don’t really like?

I did this with a client who had what she considered a shopping problem, and she found it extremely helpful for getting a visual representation of the money that she had wasted.

This particular client would often go shopping and would purchase a couple of the same item in different sizes because she didn’t want to try them on in-store, or would purchase something she didn’t know if she would want to keep. Her intention was always to return the items that didn’t fit or that she didn’t love.

Unfortunately, most times these items were never returned, meaning that there were a number of articles of clothing in the client’s closet that she cannot wear (because they don’t fit), or doesn’t want to wear (because she wasn’t 100% sold on them in the first place), and never even had the intention of keeping.

Even just after reviewing a couple of months of this, we found hundreds of dollars just hanging up in her closet in the form of clothes.

The lessons from this mistake:

Make your purchases with more intention and purpose. Be specific. Don’t buy things you don’t need. And, understand that if you buy something with the idea that you might have to return it at some point, have a plan in place. A deadline you can follow. If you know you can’t follow the deadline, don’t buy the item in the first place!

Lending money to friends and family

About 12 years ago I had a friend who was in a situation where she needed a couple thousand dollars so she can leave her abusive husband and get set up on her own. At the time, I didn’t think twice about it and went ahead and loaned her the money. This person had already been my friend for quite a while, I wanted to help her, and she had always been smart with her money.

However, a few months after leaving the abusive marriage, she moved back in with her husband, and without a job (he didn’t want her to continue working), had no way to pay me back.

What’s worse? After a while, she decided she actually didn’t owe me any money and created excuses based on the fact that she had also done things for me in the past as a friend.

I never got my money back, as I had nothing in writing. I had nothing to prove that I had lent her the money, and unfortunately that resulted in not only the money being gone but the friendship as well.

The lessons from this mistake:

When lending money, set up a contract which will include terms of repayment, interest, and the other finer details of the loan.

Not standing up for yourself

What does it mean to stand up for yourself and your finances?

A client shared a story with me, which really illustrates this point. About 15 years ago she sold her house to move into her husband’s rental. He was direct with her and said that he didn’t believe in home ownership, and so 15 years later they are still renting.

She isn’t happy about renting, and whenever she drives by her old house it breaks her heart. Beyond that, the house recently went on the market for almost twice the price she paid when she bought it..

She regrets selling the house, and she shared with me how upset she is that she didn’t have the courage back then to say that she did believe in home ownership and therefore wanted to keep her house!

I see this often in my practice, where (most often) women feel the need to make themselves small in order to fit into a relationship. I see them sacrifice their value and worth in order to prove their love.

The lessons from this mistake:

Please stand in your worth and protect your money. Let me reassure you that when it comes to love and money, you should not have to sacrifice one for the other.

Giving up control of your finances

There are many instances, mostly with women, where I see them give up control over their finances when they get into a relationship.

One client’s story in particular that stands out is of a woman who gave her PIN number to her boyfriend at the time so that he could deposit a cheque for her.

After giving him her PIN, this man proceeded to regularly deposit fraudulent cheques into her account, and immediately withdraw the money. He would hide any evidence of the bank trying to contact her, until eventually it got to the point where bank demanded to speak to her.

Her boyfriend threatened her, making her tell the bank that she had given him permission to do so. He told her that if she really loved him, she would cover for him.

I am happy to report that this client is now out of this relationship, though she did say to me that it took a while.

My mother made a similar mistake in giving away her control when she sold her assets (including property) and moved in with a man, only for him to throw her (and me and my sister) out with nothing.

This is the lesson that drives my why.

We need to empower ourselves when it comes to our money. We can stand in our power, have money security and control, and still love our partner.

Final thoughts

 Am I mad at my younger self for the mistakes I made? No. And I hope my clients can forgive themselves as well.

Maya Angelou once said, “Do the best you can until you know better. Then when you know better, do better.”

And so, I am doing better now, as are my clients.

My intention in sharing these stories is to hopefully give you back control. To help you see that it’s okay to make money mistakes, but also to educate you so that you don’t have to make the same mistakes as me or my clients.

Your money is yours. You deserve it. Please don’t give up control over it for other people, companies, or banks who don’t deserve the fruits of your labour.

I started this business to help ensure my clients don’t make these same mistakes. To ensure they educate themselves about their money. That they remain in control, and safeguard their money and themselves, and understand that they should never have to apologize for taking care of themselves and their money!

Do you need some help figuring out your finances? Book a free call and let’s get started.