7 Rookie Financial Mistakes That Will Leave You Broke

Photo by Jp Valery on Unsplash

It’s terrifying.

You’re looking at the number on the screen and feel the tension building up. You make a mental inventory of what’s left in the pantry.

It seems like it will be a noodles-with-butter week again.

The worst part?

You don’t even know how it came to this. You promised yourself you wouldn’t let this happen again.

And now you’re screwed until your next paycheck comes.

Is it possible to live a life where you don’t have to worry about having enough money for the whole month?

What about being able to afford special stuff without feeling guilty?

Let’s talk about the most common and inadvertent mistakes that are most likely keeping you broke and what you can do about them.

1. You Have a Poor Person’s Mindset

Your first step towards healthier finances is shifting your mindset. When your thoughts come from a place of scarcity, your actions will match your thoughts.

Having an abundance mindset starts with being grateful for what you already have. It’ll help you see the opportunities where others only see the challenges.

You can start your gratitude practice by writing three things that you’re grateful for. Doing it every morning will switch your mindset from scarcity to abundance.

2. You Have No Clue Where Your Money Is Going

One of the worst feelings is having no clue why your wallet is empty; that’s why getting clear on your spending habits is crucial.

Tracking your expenses empowers you to choose what to spend on; it allows you to save money, and it helps you reach your financial goals.

Pick one of the many apps you can use to start tracking your expenses and get a clear vision of where your money is going.

3. You’re Treating Your Finances Like You’ll Die Tomorrow

The main difference between enjoying your life and recklessly wasting your money is whether you are planning your finances and saving some money or not.

Saving money is part of living your best life, and it is a relief whenever you need cash for an emergency or an unexpected payment.

You can start by deciding how much money you want to save and then setting an automatic monthly transfer to a separate savings account.

4. You’re Not Clear On Your Spending Priorities

Once you know what your spending habits are, you can determine which expenses are essential and which ones you can either reduce or cut off.

Budgeting is not only a readjustment of your expenses; it’s also a powerful tool that helps you focus on what is important to you.

Focus on the expense categories that are essential to you and assign a monthly budget for them — remember to consider your savings as well.

5. You Remain Blissfully Ignorant Instead of Facing Reality

It’s almost a law of nature that whenever you ignore a problem, it transforms into chaos, which is why you need to stop ignoring your debt.

Knowing how much you owe will allow you to take action and become debt-free. Yes, this can be scary, but it’s the key to having healthier finances.

Get clear on how much money you owe and make a payment plan, making sure that you prioritize the credit with the highest interest.

6. You’re Abusing Your Credit Card Instead of Leveraging It

Credit cards can either be your best friend or your worst enemy. Understanding how they work and how to leverage them gives you a great advantage.

Using your card to purchase larger items will help you take advantage of your card rewards. Avoiding using your credit for smaller things is also a good strategy.

Look at the rewards that your credit card is offering. If they are worse than their competitors’, it might be time for changing your provider.

7. You’re Neglecting Your Most Valuable Asset

When you ignore your own development, you’re damaging your finances. By prioritizing yourself you’ll boost your self-esteem, your health, and, as a result, your wealth.

Investing in your education, health, and overall well-being is your smartest choice because it will increase your chances of living a more fulfilled, abundant life.

Make yourself a priority, invest in expanding your mind, and taking care of your body. You’re the one investment that will always give positive returns.

Start With One Step

Imagine being able to keep your promises to yourself and not worry about when your next paycheck is coming.

Imagine the relief as you check your balance and realize you still have more than enough money for the next couple of weeks.

Imagine saying goodbye to noodles-with-butter forever.

You deserve to live your best life.

You deserve to be able to buy the things that are important to you without feeling guilty the next day.

You deserve to feel like someone’s got your back.

And that someone is you.

I believe in you.

Now go take your first step.

You’ve got this!

Andrea is a freelance writer who offers blogging services to her clients. She enjoys cooking, traveling, and cuddling her cat Dali.