7 Ways You’re Setting Yourself Up for Financial Failure

by Vincent King · 13 comments

You read blogs like this to find the best ways to manage your money. Your intentions are terrific because saving money is something you know you need to do.

But as much as you read about it, you haven’t fully committed to a vision that will make it happen. You’re sabotaging yourself.

“What do you mean?” you ask. Here are seven ways you’re setting yourself up for financial failure:

1. You’re waiting to save money until you make more.

That will never happen. I’m not saying you won’t make more money; I’m saying there will always be more excuses. Start saving now even if it feels like you don’t make enough money to save, shift, and recalculate. You will find places where you can tighten your belt.

2. You forget that every penny adds up.

True, skipping the lattes likely won’t make you a million but skipping the lattes + walking where you need to go + making your lunch will help you get your head above water faster. This in turn will allow you to focus on true financial success.

3. You’re not satisfied with what you have.

If you’re constantly buying into the latest electronic trend because it’s hot, new, and attention-grabbing, you’ll never save money, much less keep yourself free from a financial gutter. You must love what you have. Be proud of your older generation iPhone and don’t worry about getting the brand spanking new – because really, do you need it? What features justify that expense? None. Be happy with what you have and you’ll keep more money in your pocket.

4. Your budget makes you cringe.

If you resent being on a budget, you’ll never make it work. Everyone says you need a budget so you try it too. But if having a limit is restricting, you can’t expect to effectively live by those rules. Try calling it this instead: a financial plan or a road map. Now your brain considers it more guiding than restricting. Success is sometimes dependent on your language. Find ways to facilitate, rather than impede, your success.

5. You buy without thinking.

That gorgeous new watch at Kohl’s will go beautifully with your new sweater (which you didn’t need to buy), so you get it. It’s perfect! But if you didn’t need the sweater, did you need the watch? Probably not. You don’t feel like cooking, so you head out to eat. Drop $100 on a meal each week and it adds up. You could have thrown together a simple meal, but no. You deserve to eat out because you worked like a dog all day. What better way to treat yourself than to dig your debt hole even deeper?

6. You don’t plan for emergencies.

You know what bills have to be paid and when. You also know how much the tax man will demand next April. But that doesn’t cover all your spending. You can never know what surprises life has for you. For years my family had minimal healthcare costs but this year we have $20,000+ in medical bills. Life happens. It’s important to plan. If you don’t, emergencies can throw your whole financial future into ruin.

7. You don’t leverage your abilities.

You’re a rockstar at work and everyone knows it. The boss is always telling you that you’re invaluable, yet you don’t demand a raise or a higher position. If so, you’re throwing money away. Ask for a raise if you are underpaid. Look for a better paying job if that’s what it takes. Don’t settle if you aren’t being valued. And if you’re NOT a rockstar, why aren’t you? Prove your indispensability and command the cash you deserve.

Which one of these do YOU struggle with the most?

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{ read the comments below or add one }

  • Beau W says:

    You have too watch were every one of your hard earned money is going. Save your money for that day of emergency. It might never happen. But your peace of mind is worth it.

  • Alley K says:

    “A dollar saved is a dollar earned.” Even if you’re barely scraping by, you can still save! Find a cigar box or similar-sized container you can put in an out-of-sight/out-of-mind location. Print out one of those 52-week savings challenge charts, where you start off by contributing $1 in week 1, $2 in week 2, $3 in week 3, and so on. By week #52, when you’ve put in $52, you’ll have saved over $1,300!

  • Phil says:

    The most important part of this article is #4 “Your budget makes you cringe.” Other things related to this article start to fall into place if you do a budget.

    You will start to save money, even if it is just a little bit at first.

    You will realize that pennies add up, especially if you write down what you spend every day like we do. (On a side note, I have a greater appreciation for how much we pay in taxes because of this too. $10 is really $10.83 in WA state.)

    You will become more satisfied with what you have (especially if you save up and pay for it!).

    You will quit buying without thinking (but this is not the same as not having “fun” money. You can still have fun. For me, that means buying a $5 latte at my local coffee shop on weekends and reading a book.)

    Your emergency fund will build. Every month, any extra money went into our emergency fund until we had the amount we wanted. For us, that was $10,000. Give this time.

    Finally, people who do a budget often lose weight, organize their house, and do better at work. I think of it this way: it frees my mind for other pursuits. Not worrying about money is a great way to live.

    My recommendation is to follow Dave Ramsey’s plan. It is called Financial “Peace” for a reason.

    • Mara says:

      great tips!!

      We are in baby step #3 now and the whole “give it time” to the emergency fund is hard but it is growing little by little. We have a similar goal of 10K but we also need to save a house down payment which seems hard but we are pushing

      • Phil says:

        Mara, I like it when Dave Ramsey says, “If you are paying attention and thinking about it, then you will win.” That is where you are. I remember being where you are…”pay this or save up for that.” Just know, you are already ahead of where most Americans are, which means you will have money and freedom. Maybe not today, but you will.

  • Jon @MoneySmartGuides says:

    I can attest to #2. I credit my high school econ teacher with teaching us that every penny adds up. It’s why when I started to save in my 401(k) and could only contribute $20 week I still did so because I knew that all that money would add up over time and it has.

  • Levi Blackman says:

    My main motivation for doing all the above is to not have to worry about money. Worrying about money makes me feel sick and takes away from the other parts of my life.

  • Kali says:

    I definitely struggle with number 7, both at my day job and with side hustles. I need to be more assertive and confident!

  • Peter Hafner says:

    Saving and properly educated investing are a must these days. one can never be too sure or too safe.

  • Phil says:

    Yanni, it is a tough balance. I agree with you, it is important to live while you are young, which I have NOT been doing. That being said, my guide is, “Did I save up enough money to do…”. If the money is not there, I don’t do it. But I have saved up enough money to buy a boat, and this summer I will have a boat.

  • Yanni Raz says:

    The one I struggle with the most is constantly telling myself that I will make more money and will save later. I still think this way to this day, I feel like spending my money now can cause a lot more enjoyment than saving and using that money for later. I just plan on continuing to work hard and get better at what I do and make smarter investments as time goes on. Hopefully it will work out, and maybe I should save more, but it is my biggest struggle.

  • property marbella says:

    Stop all this buying of different things and the latest models of everything electronic that we must have. 20 years ago there were no cell phones, Google, computers, etc., and we made it anyway and survived. Think again, and you can save your money.

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