How to Fix the 5 Most Common Mistakes You’re Making With Your Money
Saving money is key when it comes to planning a happy future, but aside from the obvious, why does making good fiscal decisions matter? Ashley Feinstein Gerstley, the author of forthcoming The 30-Day Money Cleanse, describes caring for your personal finances as a “radical act of self-love.” “When we allow ourselves to achieve our short- and long-term goals, we get what we actually want vs. what we want impulsively — or are told we should want at the moment,” she explains. “We get to decide!” To help us understand this fresh perspective, Gerstley ran us through five common money mistakes and gave us a fix for each one.
1. You’re not spending on what you actually want. Love to treat yourself after a long week? That’s great — you deserve it. Gerstley agrees that celebrating success is a good idea, so long as you’re treating yourself to what you want most and not just a distraction. “Many of the purchases I regret most seemed like a gift to myself at the moment I purchased them,” she admits. “Even though I knew I shouldn’t buy the shoes or sign up for the subscription, ‘I deserved it,’ and I wanted them! The irony is that I felt pretty guilty after and had to actually wait longer to get what I really wanted — my financial goals! This is a complete mindset reframe.”
How to Fix It: Reserve your spending for something you will truly treasure, like an experience or item you’ve really been coveting.
2. You spend spontaneously. “One of the least sexy reasons we make bad money decisions are that we don’t plan, so we end up at the mercy of convenience,” notes Gerstley. But, as she points out, convenience always costs more money.
How to Fix It: Scope out your calendar and plan expenses in advance the best you can. “Each month I get together with a bunch of my friends to eat, drink, and help each other with our businesses, and we each bring something. If I plan ahead and include snacks in my grocery shopping, I can contribute something more delicious and thoughtful, and it’s much cheaper than grabbing something from whatever store I pass on the way.” Keeping a stash of greeting cards, gifts, and a couple of bottles of wine on hand at all times can save you cash.
3. You forget to pay yourself first. Tackling your bills first is good in theory, but Gerstley reminds that “paying yourself” — or allocating funds to your savings account — is equally important. “One of the biggest mistakes we make with our finances is that we wait to pay ourselves last. We think as soon as we earn more money, we’ll finally start saving, but, again, we don’t.”
How to Fix It: According to Gerstley, automatic transfers are the trick here. “When we set up automatic transfers to our savings account (just like we set up automatic bill pay), we’re paying ourselves first,” she says. “For me, this is the only way I can save!” On a tight budget? Don’t sweat it: Even five dollars per paycheck is better than nothing and can help you form healthy money habits. Plus, it all adds up.
4. You let a mistake ruin your progress. Many people give up after making a mistake at work or in their personal life, and Gerstley says that money matters are no different. “One of the sneakiest ways we cheat ourselves of what we want most is by giving up as soon as we make a mistake. You might decide you’re going to finally start saving, and as soon as you make a mistake (like buying something you regret), you might feel like going on a shopping spree.”
How to Fix It: Gerstley advises a mindset change, advocating for being okay with an “imperfect and messy” financial journey. “Each bump in the road is a learning opportunity, so acknowledge what happened, forgive yourself, and get back on the wagon.”
5. You’re missing info. It may be hard to believe, but many people were never taught how to wisely manage their money. Not knowing what to do or being aware isn’t your fault — yet it can make learning how to smartly save and spend a painful experience. “When we don’t know what we need to do to achieve our goals, every purchase makes us feel guilty,” affirms Gerstley. “Even worse, we aren’t likely won’t achieve our goals by when we want to.”
How to Fix It: Education and awareness are superpowers when it comes to nixing this bad money move. Keeping a money journal can help you really understand how you spend. “Magical things happen when we become aware,” Gerstley encourages.
What’s your best savings-building tip? Tweet it to us @BritandCo.
(Photos via Getty)
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