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5 Money Mistakes and How to Avoid Them

February 15, 2019

5 money mistakes and how to avoid them

By HorsesMouth, LLC

Have you ever heard someone say that experience is the best teacher? Here’s another one–there are no mistakes, just lessons.

Well, I would like to take a slightly different tack.  Experience isn’t the best teacher.  Someone else’s experience is.  Learn from other peoples’ mistakes and you can save yourself a lot of grief.

In that spirit, I’d like to review the biggest financial mistakes I’ve seen and offer you ways to avoid them.

  1. Do you live paycheck to paycheck?

Too many Americans don’t have enough money in savings.  According to CareerBuilder, nearly 80% of Americans live paycheck to paycheck to make ends meet. And lest you think this applies only to those who are in low-wage positions, nearly one in ten workers who earn over $100,000 or more are in the same boat.  (


I’m shining a bright spotlight on this predicament in the wake of the recent government shutdown.  During the closure, we were treated to a healthy dose of stories from federal employees who were running out of money after missing one or two paychecks.  And these folks were guaranteed back pay and were offered plenty of assistance from banks and credit unions!


I’m not trying to minimize the frustration many of them experienced, but imagine what might happen during an extended period of unemployment.


Don’t wait to start socking money away.  Pay yourself by stashing away funds after each pay period.  I would recommend at least three to six months of emergency funds and in some cases even more.  A financial house that is in disorder is among the leading causes of stress.  Savings will mitigate the emotional and mental burden.  A cash reserve is one of the foundational building blocks of a sound financial plan.


  1. When do you think it’s time to save for retirement?

I’ve broached the subject with my daughter when she got her first job.  She seemed less than enthusiastic.  I understood.  There were many other things she was focused on.  But now, more than a decade later, she’s a little surprised at the tidy amount her 401(k) contributions have grown to.

We all know the reason earlier is better–it’s the magic of compounding.  Those deposits made in our 20s will have a lifetime to grow.  Don’t waste the chance to increase your savings now. You’ll never get it back.


  1. Do you know where your money goes?

Without a spending plan that tracks expenditures, you may wonder why there is month at the end of your money, and not money at the end of your month.


I can tell you how much I spent on gasoline in March 2011.  That may sound extreme but understanding how much it costs to run your life and the percentage made up of required as opposed to discretionary expenses, can allow for effective cash flow planning.  


Tracking your costs on a regular basis can help prevent you from over-extending yourself and spending money which was or should be earmarked for retirement before you retire.


If you are unsure how you might get started, my team can help you develop a spending plan that will help get your financial house in order.


  1. Do you have credit card and personal debt?

Credit cards are a fantastic convenience and most pay some type of reward. But don’t place yourself in bondage to monthly payments.  Pay them off monthly or you will suffer from steep interest charges.


If you feel like you’re buried under a mountain of credit card debt, an auto payment, student loans, and personal debt, you’ll need a plan of attack.  Let’s talk.  It will be the best financial decision you ever made.  Just knowing there’s a roadmap to debt-free living will be liberating.


  1. What about those luxury purchases?

That new car sure is fast, the ride is exceedingly quiet, and it has all the latest gadgets. But the new car smell will eventually wear off.  The payments, however, won’t.  When looking for a new vehicle, what you don’t know can hurt you. What is the gas mileage? Does it require an expensive grade of gasoline? What will it cost to insure? And what will the annual license renewal run?


If you can answer these questions and the payments comfortably fit into your budget, you’ll sidestep any surprises that could crowd out your hobbies and financial goals.


Let me emphasize again that it is my job to assist you! If you have any questions or concerns, remember we are here to help.  Please feel free to give me or any of my team members a call.






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