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Previously, we’ve talked about some quick tips on taking your money further as 2024 begins. At the same time, it might not be enough to take on new advice. Sometimes, the best lessons arise as a result of the things we’ve already done.

Part of the learning process is acknowledging things we’ve done in the past and how we might do things differently to achieve a better result next time. This especially holds true with money since it can affect many things we can do.

Here are a few common “money mistakes” that almost everyone makes and what you can do to achieve a stronger outcome. You might recognize some of these financial mistakes in your spending. Either way, now is the perfect time to stop, reflect, and form a plan for how to do things differently next time.

Mistake #1: Losing Track of Spending

We get it: the ins and outs of the daily grind can make it confusing to keep tabs on everything, especially regarding money. Things like visiting the coffee shop for your morning cup can feel routine, and all those charges to your credit card can quickly feel mundane and go unnoticed.

If your monthly credit card statement comes with an unhealthy dose of sticker shock, now’s a good time to change your attitude toward staying on top of spending.

Be mindful of your daily or weekly expenses. Keep receipts for every transaction and keep a running tally to update regularly. Being aware of spending can help you remain on budget. You may find it easier to recognize spending patterns and give yourself a moment to think about things for next time.

Mistake #2: Relying on Credit

2023 was a record year for charging, as many households found themselves relying on "the plastic" to cover everyday expenses. While it may be necessary to “charge it” for things occasionally, it is also important to remember that depending on credit can damage your ability to finance things like a new car or a home. At its worst, overcharging can easily lay the foundation for falling into an inescapable debt trap.

Avoid maxing out your credit cards. You can maintain a healthy relationship with your credit cards by keeping the following tips in mind:

• Don’t exceed charging more than one-third of your total credit
• Always try to pay off your balance every month
• Avoid opening new credit lines to pay off older credit card bills
  

It is highly recommended to carry only one “primary” credit card at a time and use it sparingly. This is also a good time to review the Do’s and Don’ts of Credit Card Spending.

Mistake #3: Being Unrealistic With Budgeting

To many people, budgeting can feel like imposing a ton of restrictions on oneself. Viewing a budget as a code of laws to follow to the letter will only make you want to break them even more.

Budgeting is a lot like dieting: a “crash diet” that only focuses on paying down debt restricts you from doing what you want, while “binging on junk purchases” sets you up for an unhealthy financial outlook. Take an honest look at your finances and find opportunities to balance your obligations and luxuries.

When crafting your budget, viewing it more as a guide may prove helpful. Be flexible and forgiving. Put your budget in writing. Identify things you need to pay off or save for, and then make room to buy the things you want.

Remember that budgeting should be a tool that keeps you in control of your finances. Revise it regularly, think about your spending, and find opportunities to do better, month after month.

Mistake #4: Shopping Unprepared

One of the biggest budget-destroyers would have to be impulsive purchases. Many of the places where people shop are engineered to make buying extra items easier to do.

To avoid impulse buys, make a shopping list and stick with it. This is a beneficial strategy for routine purchases like grocery shopping.

Another thing you can do? Anticipate that you might make an impulse buy, and keep yourself accountable. Throw it into your budget's “discretionary” bucket and put it on your tally when you get home.

If you have children, preventing impulse purchases all of the time can prove challenging. However, this also presents teachable moments, depending on the child’s age. Take these moments to have earnest conversations with your children about money. It will take some effort, but it will help instill useful values that teach your child lifelong lessons.

Mistake #5: Buying Happiness

This can sound a little overdone, but spending your way to a better mood seldom works. Trying to buy happiness (purchasing impulsively, going on impromptu trips, bar hopping, etc.) is a lot like trying to dig yourself out of a hole. It just makes a bad thing worse, especially if you’re in the middle of trying to pay down debt.

However, it is understandable to want to find outlets to manage stress or find avenues for expression. Instead of hitting the bar or ice cream shop for a fix, try other low-cost activities like: 

• Joining or organizing an athletics group
• Borrowing or streaming movies from your local library
• Going on nature walks or bicycling trips
• Keeping a journal or doodling notebook
  

Mistake #6: Being Shy About Discussing Tough Money Topics

Let’s not beat around the bush: times have gotten tough for nearly everyone. Depending on your situation, there may be financial matters that are very concerning to you. That doesn’t mean you should keep your money troubles a secret or hope they disappear on their own.

One of the first steps to overcoming a problem is identifying it, and often, that only happens if you have the space to talk about issues openly and honestly. If a money concern is troubling you, you should discuss it with someone you can trust.

Speaking with a qualified financial counselor can help you get on the right track. Whether you need assistance with budgeting, debt management, or taking control of your financial future, a counselor can provide a wealth of resources to help you meet your goals.

The more we learn, the stronger we become. As we enter this next year, now’s the perfect time to reflect on the past and see if there are places where improvement is possible. When it comes to your finances, First Florida Credit Union has your back so you can look towards the future confidently.