The Top Six Money Mistakes, Part 4

We all aren’t perfect and have messed up from time to time, even in the world of finances.  Yet, we should aim to be money smart and learn from our past foolish choices.  As the longest-tenured Dave Ramsey coach in the U.S. with over eighteen years of coaching experience, I have observed these top six mistakes that clients have made.       

1) Using an emergency fund for non-emergency expenses

2) Failing to include non-monthly expenses in their budgets

3) Failing to keep accurate bank account records

4) Losing sight of their financial goals

5) Slipping back into old patterns and spending behaviors

6) Justifying their unwise decisions

In this final part we wrap up our series with #5 and # 6  and leave you with practical ways to avoid risky money choices or patterns of behavior.   

5) Slipping back into old habits and spending behaviors.  You may have heard the saying that “insanity is doing the same thing over and over again but expecting different results.”  In this context, it means that the easy thing to do is fall back into the comfortable ways of handling money when things get tough or you are challenged.  Avoid this insanity.  The following are proactive measures to establish safe spending.

  • Be diligent in resisting the stores that entice you to spend and avoiding the situations in which you are more apt to spend (if you always buy souvenirs while on vacation, or always buy candy with your popcorn at the movies, cut back or stop buying them when you go).
  • Set reasonable limits for specific items—research the current sale prices and aim for finding items of that amount.
  • Make a shopping list before you go and only buy what is on it. Have someone keep you accountable; tell them details of how much you spent when you are done. 
  • Delay gratification by waiting a few days or weeks before buying.  It may very well turn out that after you wait you realize you don’t want it.

6) Justifying their unwise decisions.  Most decisions we make which are not so smart are based on emotions.  People who don’t have financial plans or who aren’t in agreement on money choices as a couple will gravitate towards emotional purchases.  Before making decisions about spending, take the time to review financial goals and ask yourself if it’s a need or a want.  Resist buying things on sale if you don’t really need it or if it’s not in the budget.  That’s just stupid!  (It’s the financial coach talking right there.)    

Indicators that you probably don’t need to spend include:

  • Telling yourself you deserve to buy something
  • Deciding that it is okay to make a purchase since you just got a new job or a raise
  • Explaining that you can make payments on it

If you realize that you are doing one of the above, take notice and stop.  Or, if you realize that you already made a foolish decision, own up to what you have done and move on. Do this by setting parameters for future spending or adhering to your budget and stick to your plan. Again, have someone hold you accountable.

Hopefully reading about these mistakes and applying the measures to avoid them will help you become more money wise and take steps closer to financial freedom. 

*Images taken from

Article written by Ross McCutcheon and Beth Bohman