Making financial missteps is something nearly everyone experiences — and if you've made a few along the way, it doesn't define where you're headed.

What matters most is building awareness of the patterns that can quietly work against us. Some common pitfalls worth being mindful of include:

The encouraging thing is… Continue Reading

Does that number surprise you? Based on the amount of uncertainty and change in the world - and the economy - in the past few years, it’s not really that out there.

Especially if not looking at your money situation means you have one less thing to be worried about that day/week/month. And for a lot of us, even if we DO take the plunge and keep an eye on our financials, we’re nervous about making the wrong decision, or just plain overwhelmed by it all.

Wealth Enhancement surveyed 2,000 Americans on their emotions around their finances in September 2025. This helpful graphic is from their Mood & Money Report:

So we get it. Money stress is an emotional roller coaster - but NOT being on top of your finances is not going to take the stress away. In fact, it’s a pretty big financial mistake to make (How can you join a race if you don’t know where the starting line is?).

But the key to correct this mistake - and avoid a whole stack of others - is to increase your awareness of exactly what your position is, and not fall into other money traps along the way…

Sometimes you're just so busy that you don’t take the time to think long and hard about money. Finance can also seem complicated, so it’s easier to just avoid it altogether.

While this isn’t good, it won’t necessarily be disastrous.

On the other hand, there are some financial decisions that are both common and very damaging. These common money mistakes can disrupt your life and set your plans back by a factor of years.

So what are they - and how can you avoid them in the first place?

A lack of a budget can lead to debt in the worst cases. But in the least severe cases, having no budget means saving less money for your future.

Budgeting can be a difficult habit to build at first, but making one is necessary to manage finances. With small steps, building a budget over time leads to greater savings.

Try this: One good method is the 50/30/20 plan or something similar, where you split your income into percentages. This simple budget method helps you line up needs, wants and savings.

Becoming overburdened with debt is an increasingly common experience. In many cases, it’s not a lack of responsibility, but a byproduct of the costs of living.

Student debts, when combined with credit cards and other personal debts direct money away from savings. It’s no surprise that high levels of debt with high interest rates can lead to financial difficulties.

Wherever possible, debt should be avoided. But it’s also important to know bad debt from useful debt.

If you have decent or better credit, a mortgage is a good example of a debt that serves a purpose in the long run, even though you’re paying interest. On the other hand, letting credit card debt get out of control can be incredibly damaging (Bad debt.)

Budgets can account for the amount of money you're willing to spend on a given expense. However, with or without a budget, taking the time to compare options is always prudent.

Many people just don't bother investing time to compare options - one of the massive money mistakes.

Perhaps the best example of this is with cars. A car can lose about 40% of its value the moment it leaves the lot.

If you can get a used car with a good record and not too much mileage, you can save thousands of dollars through such a simple decision.

Many dealerships offer 2- to 3-year-old cars with certificates, low mileage, and often an overhauled vehicle with a fresh warranty.

In many cases, just not looking is the cause of spending too much when there are cheaper options that provide roughly the same quality.

Not investing means not experiencing the power of compounding interest.

Simply saving is a good idea, but only to a point. Once you have enough money to cover a major emergency, it makes sense to start investing.

Sitting on cash is an historically bad idea when you have other options (Think high-yield savings accounts or CD laddering to start small.). When looking at historic returns, cash is an asset with extremely slow appreciation. Read: cash doesn’t earn much in interest.

In most cases, it will make more sense to invest in stable, low-risk assets with much stronger long-term returns.

Lastly, a lack of life insurance is an easy financial mistake to make, but one that can cause hardship for your family. This is perhaps the most understandable and forgivable money mistake. Most people do not want to think about their mortality.

But there are a few reasons why it's worth spending just a small amount of time acting on:

Life insurance is important for the peace of mind it provides. You can relax and stop thinking about your mortality knowing that your loved ones will be taken care of.

Awareness is the first step to avoiding these common money mistakes. Just by reading this article, we hope we have made it less likely that you suffer from one of these bad financial circumstances!

The next step following awareness is preparation.

Financial planning can help you avoid overspending, bad debt, and suboptimal long-term growth due to these factors or the lack of long-term investments.

All that’s left is for you to get started in the areas you may not have had the time to closely consider so far.

It’s never a bad time to make changes, implement a budget, and work on improving your financial future. But it’s always better to get started early.

💸The Wealthy Thinker: 7 Types of Budgets That Absolutely Work - Which One Suits Your Style?

💸The Wealthy Thinker: The Power of Compound Interest: How it Works, the Good & the Bad

📰Wealth Enhancement Report: Nearly Half of Americans Avoid Checking Their Financial Accounts Due to Stress, Wealth Enhancement Research Finds

📱My Money Coach Blog: Are You Making These 6 Big Money Mistakes? Here’s How to Avoid Them