We all know mistakes are part of life. But it doesn’t make it any easier when we find out we’ve made one—especially when it comes to money. For many of us, these Money Mistakes have painful consequences. But with a little bit of knowledge, you can avoid making them altogether.
If you’re a MindShift.money member, you’ve already taken a huge step forward in your journey to reach Financial Freedom. And you should recognize the mistakes we’re going to talk about today as issues you confronted and changed.
But if you’re not yet a member of MindShift.money you’re probably making at least one of these mistakes!
Money Mistake #1: Not Paying Your Future Self First
What’s the action the 4% takes that the 96% usually doesn’t?
Simple. They Pay Themselves First! More specifically, they pay their future selves consistently and before any other bills. The 4% know that even if the amounts are small in the beginning, the deposits will grow over time and gain momentum to fuel their Freedom Generator.
The 96% make the mistake of not Paying Themselves First. They plan to pay themselves after they’ve paid everyone else first. But the amount that is usually left over? Zero.
Don’t fall into the trap of the 96%. Pay Yourself First consistently and before you pay anyone else. Your future self will thank you.
Money Mistake #2: Not Planning For Future Expenses
Living paycheck to paycheck isn’t really living, is it? You’re just surviving. If you’re like 96% of the population, you live from one paycheck to another, and you may believe you’re doing well. But really you’re one large future expense away from financial disaster
The 4% know that to achieve Financial Freedom, they need to plan for future expenses. Instead of taking out a car loan and creating debt, they consciously set aside an amount each month for car replacement. Then they pay cash when the time comes. This goes for holidays and home repairs too!
The 96% act as though replacing their car is a surprise. They don’t plan ahead and then panic about qualifying for a loan when their car breaks down. As a result, they go further into debt for an expense they knew what coming but failed to plan for.
Stop living so close to the edge with your finances. Take the time today to plan for those future expenses so they don’t derail your journey to Financial Freedom.
Money Mistake #3: Not Separating Your Money
One of the best ways to keep yourself on track when it comes to spending is to separate the money you use for everyday expenses from the money you use to pay bills.
In Financially Fit Bootcamp, you learn how to set up a Perfect Account Structure. This puts your everyday spending into an entirely separate account from your expenses.
The 96% spend and pay bills out of one account. As a result, they have constant money stress and worry about overspending or bills being paid.
But you know better. You know that the habit of the 4% of separating their spending from expenses is the best way to eliminate money stress. You’ll never have to worry about spending the mortgage money on groceries. You have a healthy boundary of separate accounts to prevent this from happening.
Learning From Past Money Mistakes
We’re not born with the ability to make solid financial decisions. We all have to learn, and mistakes are part of the process. But today you can take the first step in that process by making the choice to Pay Yourself First, Plan for Future Expenses and Set up a Perfect Account Structure.
The decisions you make today have a lasting impact on your financial future. So stop focusing on just getting by, and start planning for tomorrow!
We want to know! What’s the biggest mistake you’ve made with your money? And what did you learn from making that mistake? Share with us in the Financial Foundations community!
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Dr. Tony is the co-founder of MindShift.money and the best-selling author of three books on personal and business finances. Having achieved Financial Freedom at 27, Dr. Tony believes that through Financially Fit Bootcamp and Cash Flow Cure everyone can get there. He has made it his life’s mission to help others live a life where their money works for them—not the other way around.