Unless you are born into an extremely wealthy family (how many are, by the way?), you will may have faced challenges, whether more or less extensive, with money. Money can indeed be a tricky thing, and while some people seem to have plenty and are able to live a carefree life without overthinking finances, others struggle to make ends meet and try to live paycheck to paycheck. However, it’s not always the amount of money you have (btw, it’s never enough!), it’s mainly your behavior towards money and how you spend it.

Another tricky thing about money is that people usually are in constant denial about their financial situation, which sometimes makes them more susceptible to financial mistakes.

For this reason, we gathered the 15 most common mistakes you may be making, and you haven’t still managed to be financially stable or independent.

You Live Beyond Your Means

The most crucial mistake we make is spending a lot of money to acquire things, even though we cannot afford them since our earnings are less than what we spend. Buying the things we want by using an overloaded credit card or by taking a loan is not making us richer; on the contrary, it is making us spend more than our pocket can handle, and when the debt is accumulating then we decide to make drastic changes in our lifestyle in order to make ends meet. To avoid this, create a budget and stick to it. Only spend what you can afford, and try to save a little each month. Nobody cares if you have the latest iPhone or the newest mascara. Why DO you care that much?

You Don’t Have a Budget

As we mentioned before, living beyond your means is the most common mistake you can make that prevents you from being financially stable or independent. However, what you don’t know is that a budget is one of the most powerful tools if you want actually to manage your finances. Not having a budget can create confusion and make you more susceptible to ignoring where your money is going. Having a monthly budget can help you track your monthly income and expenses and help you live within your means and save money for the future.

You Only Have One Source of Income

Even if this is ideal, modern times need modern solutions, and having only one source of income can be quite risky. The market is challenging right now, and we all hear about dismissals and people losing their jobs out of the blue. If you lose your job or your business fails, you could be in a financial crisis -if you are unprepared. Having multiple sources of income could help you be more independent and avoid any radical changes in case you lose your primary income. Multiple income sources are not only side jobs; apart from a side hustle, you could invest your money in real estate or low-risk investments. This way, you can ensure financial security if something happens; if it doesn’t, you may build some important wealth!

You Don’t Read About Money

This means that you are not well-educated about money and how it works. Even though it may be a boring topic, financial literacy is vital if you want to manage your money effectively and gain financial stability. One of the main reasons that we make insufficient financial decisions is that we don’t understand basic concepts like interest rates, investments, or taxes. People in business, especially usually fail to understand how the taxation system works and how to charge their clients to get some money. Don’t waste more time, and start educating yourself about money management. Listen to podcasts, read books, or take online courses to enrich your knowledge in finance. Your pocket will be pleased!

You Don’t Set Financial Goals

If you don’t have clear financial goals, then it’s easier to spend money, especially on things that are not essential and you typically do not need. As you set your goals for the season or the new year, you need to set your financial goals for the next month, quarter, or year. Whether it’s saving for a home, retirement, or a vacation, having a goal gives you something to work towards and helps you make better financial decisions. Reviewing and reevaluating your goals will fill you with motivation and encouragement to move forward.

You Don’t Have an Emergency Fund

Life is unpredictable, and the future is unforeseen. This is why you need an emergency fund; a medical emergency that kept you off business for a while, a car incident where your car needs repair or even a home repair can turn our budget upside down. If you don’t have an emergency fund, then you will end up accumulating debt on your credit cards, which will be hard to pay off in the future. Also, an unexpected job loss could occur and jeopardize your financial stability. For this reason, it’s important to have an emergency fund for the next 3-6 months in order to be able to handle such life scenarios smoothly.

You Impulse Buying

This is another pain point that keeps us from being financially independent. With all those temptations and the needs that advertisement and marketing create for us, it’s easy to give in buying something on impulse, especially nowadays that online shopping has become more than effortless and fast. Nevertheless, impulse buying is hardly concerned with things we need and can quickly evaporate our bank account. Before pressing the “Purchase” button in your cart, follow the rule of 48 hours and then evaluate if you still want it.

Your Carry Credit Card Debt

Credit cards can be convenient and help us make fast purchases but they can also jeopardize our entire financial situation if we don’t control them. Unfortunately, banks offer credit cards very quickly to people without -of course- educating them on how it works and how you can accumulate debt if you are not paying attention. That is, if you carry a balance on your credit card, it means paying high interest rates, which can keep you in debt for a long time. Try to pay off your credit card in full each month. If you already have debt, settle it down as quickly as possible.

You Ignore Your Credit Score

Companies use credit scores to decide whether to offer someone credit products like mortgages, auto loans, and credit cards. That means your credit score affects your capacity to borrow money and the interest rates you’ll pay your debtors. A lower credit score can trigger higher interest rates over time, translating into thousands of dollars. Pay your bills on time, keep your credit card balances low, and check your credit score regularly to avoid unpleasant surprises.

You Don’t Invest for the Future

While the mindset of seizing the day is fantastic and we always talk about how important it is to live in the present without worrying about the future, things are not that simple when it comes to money. The romantic and psychological aspect of only caring about the present usually involves less critical aspects of our lives, and we shouldn’t apply it to significant life aspects like our career, family, and finances. When it comes to your finances, you need to be able to think about the future, and investing is a way to do it. If you are among those who believe that investing is risky and could jeopardize your money, then you need to educate yourself since you probably don’t know how it works. For instance, investing in stocks, bonds, or real estate can help you grow your wealth and stay ahead of inflation, making you more financially stable.

You Don’t Save for Retirement

Retirement might seem far away, especially when we are in our 20s and 30s; however, the earlier you start saving, the better. If you wait too long to start saving for retirement, you will miss out on compound interest benefits, which can be stressful. While on business, take advantage of employer-sponsored retirement plans, like a 401(k), or open an IRA and make sure that you contribute consistently. Even small contributions can increase significantly over time.

You Ignore Inflation

Inflation is the rise in prices over time, which means your money will buy less in the future. If your savings sit in a low-interest account, they might not keep up with inflation, which has been increasing significantly lately. For this reason, and in order for your money to not lose its purchasing power, consider investing in options that offer higher returns, like stocks or real estate, to help your money grow faster than inflation.

You Don’t Pay Attention To Deals

You may think looking for deals is just a waste of your time, but not paying attention to them may end up being a waste of your money as well. Taking some time to compare prices and base your financial decisions according to what each deal has to offer can potentially save a lot of money and make your bank account breathe a little. Insurance, utilities, and groceries are the best way to provide you with a lot of good deals and save you money. Home expenses are the ideal candidate for negotiating and comparing prices.

Your Overpay for Housing

The housing industry is causing a lot of stress to people, even if their financial situation is relatively stable, since housing is usually the most considerable expense for most people. The problem is that people overpay when they own a house or rent without understanding how difficult this is for their bank accounts and future financial stability. If you spend too much on housing, consider downsizing and moving to a less expensive area. You can also rent a room in your house to split your housing costs and have some more money to invest or save.

You Procrastinate on Financial Decisions

Financial decisions can be difficult, and decision fatigue can make us procrastinate, whether it’s about a huge purchase, retirement investments, or paying our debt off. However, financial procrastination can cost you in the long run since the more you do not decide for your future, the more money you lose. Stop procrastinating and improve your financial situation today, even if you make a small step every time.