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Are you making mistakes with your money that could cost you?

In this episode, I'm covering 5 common money mistakes you may be making that could cost you a fortune.

Resources mentioned in the show

• Learn more about budgeting

• Savings challenge

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Below is the transcript from today's show. Or you can download the full transcript as a PDF.

Welcome to the Go From Broke podcast where you'll learn how to take control of your money so you can stress less and save more. If you're tired of living paycheck to paycheck or constantly wondering where your money is going, you're in the right place. This podcast is all about giving you actionable tips and advice so you can get started improving your finances today.

Did you know that over 500,000 bankruptcies each year can be attributed to medical bills? According to a recent study, one out of every 12 Americans goes without health insurance and one in six has an unpaid medical bill.

Going without insurance to save money is just one example of the many mistakes people make with their money that will actually end up costing them a fortune in the long run.

In today's podcast we're going to discuss five of the most common money mistakes and how you can avoid them.

Mistake number one is failing to plan for the unexpected.

So one of the biggest mistakes you can make is failing to plan for unexpected expenses.

If you don't have an emergency fund to cover unexpected costs you'll likely end up using credit cards or even taking out loans to pay for them.

That can put you into some serious debt and lead to high interest charges, late fees and other penalties.

So to avoid this, be sure that you create a budget and include an emergency fund as well as sinking funds into your spending plan.

Mistake number two is in not investing for the future.

So this is another common mistake where people would just neglect to invest in your future in a timely fashion.

So, if you don't start saving for retirement early, you'll actually have to work a lot longer or retire with less money.

Compound interest is this magical number that basically means the earlier you start, the more you'll make, with less contributions.

So it's important to take advantage of things like your employer sponsored retirement plans, like a 401k or a 403b. And also then to invest in a diversified mix of assets, whether it's real estate, the stock market, index funds, whatever it is. Just plan for the future way before the future comes, is the idea.

You can also consider investing in yourself by taking different courses, learning new skills, and networking. Doing those things can also help you earn more money, which will then help you reach your financial goals sooner.

Okay, so mistake number three is making impulsive purchases.

This is another big mistake that most of us make.

Just because you have money doesn't mean you have to spend it.

If you want to be successful with your finances, you really need to start being mindful of your spending and only buy what you can afford and what you've planned for, for the most part.

While this may require you to make some sacrifices in the short term, it'll be worth it in the long run.

Impulse buying can lead to debt, financial stress, and regret. So to avoid all that, just start getting intentional with your spending.

Make a list of what you need before you go shopping and stick to it, or create a wishlist so that you can add anything you feel the urge to buy. Just tack it onto your wishlist and then it's something you can revisit to see if that is something you actually want later on.

You can also try forcing yourself to wait a set amount of time before you buy anything over a set dollar amount. So anything over $20, add it to your cart, but then don't check out. Come back the next day or even the next week, and see, is that still something you want? And is it in the budget?

Speaking of budgets, consider adding a wishlist category to your budget to help you practice patience while you're saving.

So basically fund a category called wishlist, and then once you have some money in it, give yourself permission to go and grab something off of your wishlist.

This is a lot like fun money accounts, but it's even more intentional because with a lot of fun money that just helps you compensate for your impulsive spending. Whereas with a wishlist category, it's preventing you from doing impulsive spending, but then giving you permission to actually get things that you may want or need that aren't on your budget otherwise.

Mistake number four that could be costing you a fortune is carrying too much debt.

So I'm not like a huge anti-debt person. I don't like consumer debt personally, but it can be a tool to help you reach your financial goals. But it can also be a burden if it's not managed properly.

So if you find yourself struggling to make your monthly payments, it's probably time to consider consolidating or refinancing that debt. And also making sure that you're budgeting and creating a payoff plan for that debt so that you can pay it off as quickly as possible.

Carrying too much debt can not just lead to financial stress it could also really damage your credit score. Not to mention, prevent you from reaching your other financial goals.

So to avoid this entirely, just be mindful of your debt to income ratio and only borrow or spend on credit, what you can afford to repay.

And finally mistake number five is not insuring yourself properly.

As I mentioned earlier, failing to insure yourself and your family can have massively negative consequences on your finances.

Over 60% of people filing bankruptcy are doing so in part, because of medical bills.

60%!

That's a huge number of people who are going into bankruptcy because they can't afford their medical bills.

Now there may be a whole host of reasons for that, but one of them is that they're not insured properly.

So if you don't have health insurance, any accident or illness could easily lead to a massive amount of debt.

Also make sure you're considering insuring your home and your car and any other valuable possessions so that you can protect your assets in the event of theft, damage, or loss.

Not insuring yourself properly is a mistake that can cost a fortune.

So to avoid that, just make sure you have the right insurance coverage to meet your needs.

So tell me, are you making any of these money mistakes?

While no one's perfect, avoiding these common money mistakes will help you stay on track to reach your financial goals.

And if you are making any of these mistakes, don't sweat it.

Your action tasks this week is to simply identify which mistake you're making and then come up with a plan to fix it.

You can find all sorts of free resources over on the go from broke website that will help you out. From budget guides to spending challenges, I've got you covered.

And if you need something a bit more tailored to your own situation, don't forget that I do offer financial coaching now.

You can head over to go from broke.com/coaching and you can schedule a free Q&A call where we'll determine if coaching is a good fit for you.

Speaking of good fits. If you know anybody that might benefit from this podcast, it'd be amazing if you could share it with them.

And don't forget to leave a rating and review to help other people discover the podcast as well.

As always take action and make it a great day.