8 Common Money Mistakes You’re Probably Making (And How to Fix Them)

Managing money can feel like juggling knives—you think you’re doing fine, but one slip, and everything goes south. If you’ve ever stared at your bank account wondering, “Where did it all go?” you’re not alone. Most people make at least one or two common money mistakes, often without realizing it. The good news? These mistakes can be fixed with a little effort, awareness, and perhaps a touch of humor. So, let’s take a deep breath and laugh off these common money mistakes we’ve all probably made at some point. Whether it’s overspending, ignoring a budget, or forgetting about that subscription service you don’t even use anymore, these errors are more common than you think—and they’re definitely fixable!

Shocking Money Mistakes and Stats You Need to Know

• 59% of Americans struggle with overspending, particularly on non-essentials. (Source: Bankrate)
• 40% of Americans would have difficulty covering an unexpected $400 expense. (Source: Federal Reserve’s Report on the Economic Well-Being of U.S. Households)
• 1 in 3 Americans has no retirement savings. (Source: GoBankingRates)
• 26% of Americans have never checked their credit score. (Source: FICO)
• 75% of people don’t shop around before making purchases on big-ticket items. (Source: NerdWallet)
• The average American spends $273 per month on subscription services, many of which go unused. (Source: Harris Poll, 2019)
• 60% of people don’t track their spending. (Source: MoneyTips, 2021)
• 64% of Americans live paycheck to paycheck, with little or no savings. (Source: U.S. Bureau of Labor Statistics, 2023)

1. The “I’ll Deal With This Later” Debt Strategy

It’s tempting to ignore those bills that pop up. Maybe it’s a credit card bill that feels like a small mountain, or a student loan statement that looks like a small novel. You think, “I’ll deal with this later”—but we all know what happens next: later becomes never. And suddenly, you’re facing a much bigger problem with high interest rates, penalties, and a sinking feeling in your stomach.

How to Fix It:

Take a deep breath, and face the debt head-on. Start by paying off the smallest debt first (this is known as the “debt snowball” method). You’ll feel like a financial superhero as you knock down debts one by one. And don’t forget to make at least the minimum payments on all your debts to avoid late fees—no one needs that extra stress.

2. Not Budgeting—Ever

You probably think budgeting is as fun as watching paint dry. After all, who wants to sit down with a spreadsheet and track every penny? But here’s the thing: if you don’t know where your money is going, it’s all too easy to overspend. You might be surprised at how much you’re blowing on things like takeout, subscriptions you forgot about, or a new wardrobe when your old clothes are just fine.

How to Fix It:

Start simple! Grab a budgeting app like Mint, or go old-school with a pen and paper. Track your expenses for a month and see where your money is going. If it turns out you’re spending half your paycheck on avocado toast, maybe it’s time to rethink that brunch habit. A budget doesn’t have to be a rigid prison sentence—it’s just a way to ensure your money goes where you want it to, not just where your whims take it.

3. Ignoring Your Emergency Fund (And Hope It Never Comes to That)

Ah, the emergency fund. It’s like that mythical unicorn everyone talks about, but few ever actually see in their bank accounts. When was the last time you set aside money for a rainy day? If your idea of an “emergency fund” is praying your credit card limit doesn’t get maxed out during a car repair, you’re probably making one of the most common money mistakes.

How to Fix It:

Start small. Aim for an emergency fund of at least $500 to $1,000—just enough to handle small surprises like a flat tire or an unexpected medical bill. If you can’t do that right away, set aside a little each week. Having that buffer will save you from using credit cards in emergencies (and paying interest on top of it). Plus, you’ll feel like you’ve got a financial safety net—kind of like a safety harness, but for your money.

4. Splurging on “Temporary” Luxuries

We all love the thrill of a spontaneous purchase. A new pair of shoes, the latest tech gadget, or that fancy coffee machine that promises to change your life. But what seems like a harmless splurge can quickly turn into a habitual money drain. The worst part? These “temporary” luxuries rarely bring long-term happiness, and you’re left with buyer’s remorse and a lighter wallet.

How to Fix It:

Before making an impulse purchase, ask yourself: “Will this bring me joy for more than a week?” If the answer is no, walk away. Set a 24-hour rule for non-essential items: if you’re still thinking about it the next day, then maybe it’s worth the splurge. Spoiler: Most of the time, you’ll forget about it completely.

5. Overestimating Your Future Income

It’s easy to get caught up in the idea that a raise or promotion is right around the corner, but basing your spending habits on a future paycheck is risky. You may think, “I’ll get that bonus next month,” but until it hits your account, it’s nothing more than wishful thinking. Assuming your financial future will look a certain way without considering the reality of fluctuating income can lead to overspending.

How to Fix It:

Live within your current means. If you’re anticipating more income in the future, great! But don’t let it affect your spending now. Stick to a budget based on your current income, and if that raise or bonus comes through, consider saving or investing it, rather than using it for unnecessary splurges. This way, you’ll avoid falling into the trap of “future income” mistakes.

6. Letting Subscription Services Pile Up

Subscription services are the sneaky culprits of your budget. You sign up for a streaming service, a fitness app, or a magazine subscription, thinking you’ll use it “all the time.” Fast forward six months, and you’re still watching the same shows on Netflix, while the subscriptions pile up in the background like a financial graveyard. Before you know it, you’re paying for things you don’t even use.

How to Fix It:

Take a look at all your subscriptions and cancel the ones you’re not using. Tools like Truebill can help you track and manage your subscriptions, but you can also do it manually by reviewing your bank statements. Canceling a few unused subscriptions will free up cash for things you actually need—or better yet, you can stash it into your emergency fund!

7. Not Planning for Retirement (And Assuming You’re Young Enough to Worry Later)

Retirement might seem like something for your future self to worry about. But trust us, the earlier you start saving, the more time your money has to grow. Waiting until you’re “older” or “more settled” is a recipe for financial regret—and maybe a future filled with ramen noodles and questionable hobbies.

How to Fix It:

Start contributing to your 401(k) or IRA today—yes, today. Even if it’s just a small amount, the key is to start early. Time is your best friend when it comes to compound interest. If your employer offers a 401(k) match, take advantage of it—it’s like free money. The more you save now, the less you’ll have to stress about later.

8. Failing to Track Your Net Worth

It’s easy to look at your bank balance and assume everything is fine, but how do you know if you’re actually making progress? Your net worth—assets minus liabilities—is a better indicator of your financial health. If you’ve never checked it, you might be shocked to see where you stand.

How to Fix It:

Take the time to track your net worth. Start by adding up all your assets: savings, investments, and property. Then subtract your debts (student loans, credit cards, mortgages). Calculate this every few months to track your progress. If your net worth is going up, great! If not, it’s time to take a hard look at your finances and make some changes.

Conclusion:

Making money mistakes is part of the journey, but they don’t have to define your financial future. By identifying these common money mistakes and implementing small changes, you can get back on track and start building a healthier financial life. From tackling debt to setting up that emergency fund, every little step you take now will pay off later. So, stop procrastinating and start fixing those mistakes today—your wallet (and future self) will thank you.