Let’s Stop Repeating These Financial Mistakes

by Gary Foreman

Are you guilty of making these money mistakes over and over again? Have you fallen for any of these slick sales tactics? Let’s all stop making these costly financial mistakes.

What do you think? You do something 20 times and get the same result each time. What will happen the 21st time you do it?

It’s amazing when we repeat the same mistake over and over and still think that somehow it will come out different if we try it yet again.

They say that man is brighter than animals because we have the ability to learn. Sometimes when you watch people make the same financial mistakes over and over, you can’t help but wonder.

Let’s stop wasting time.

Have you ever thought about the phrase “spending time?” It’s a good reminder that we spend our time just like we spend our money. Each day we start with a certain amount of time that we can use for work, family, chores, and entertainment. And much as we’d like it, there’s no such thing as a 25-hour day. It almost makes you wonder whether we should try to budget our time.

Another thought about time. Have you ever brought home a new purchase and then been surprised by how much of your time it consumed? It could be something meant for amusement (video games) that’s hard to stay away from. But it’s almost as if this item eats holes in your day that you’re virtually helpless to avoid.

Let’s stop falling for slick sales tactics.

Am I the only one bugged by ads that claim “only 24 easy monthly payments”? Every payment that I’ve ever made in my life brought some degree of pain.

And what about the ads that offer something for three monthly payments of $39.95. Are we so slow on math that we don’t realize that we’re paying nearly $120 for whatever it is? It must work because the advertisers keep doing it.

If you think about it, all scams have one thing in common. Somewhere in the pitch, you’ll be told that you must act now. Later it will be too late. Be smart. Don’t miss this opportunity. Yes, successful people often act decisively. But they usually have already accumulated quite a bit of information about the decision that they’re about to make. Usually, the exact time that you’re asking for more information is when they want to rush you.

Related: How To Develop Sales Resistance

Let’s stop trying to get rich quick.

Why is it that almost everyone you meet would like to get rich quickly? Take the game shows giving away a million dollars. Everyone wants to win. But do the winners really go on to a better, more satisfying lifestyle?

Ask the first winner of the Florida lottery. I once saw a report that said winning the lottery made his life miserable. Everyone looked at him as a possible source of cash, not as a friend. Soon nothing mattered but the money. Eventually, all the money was gone. So are his “friends.” And he earns his living cleaning restrooms on the Florida turnpike. Lifestyles of the rich and famous anyone?

Did you know that most studies have found that people with lower incomes and education levels are more likely to play the lottery? Wonder if they’d buy fewer tickets if they knew that they had a greater chance of being hit by lightning than winning the big prize.

Related: Why You Shouldn’t Play the Lottery

Let’s stop buying things we don’t need.

How many things do you absolutely need to buy today? OK, sure, medicine or groceries.

But would your life come to an end if you delayed the purchase of that new TV or car? Maybe tomorrow you’d find a better price or a model that you liked better. Perhaps you’d even conclude that you didn’t need it at all.

Related: Could Acquired Needs Theory Save You Money?

What about those small purchases? “Only $19.95 and free shipping. Visa and MasterCard welcome.” Well, yes, sort of.

But, if you put that on a credit card and pay the minimum amount each month, you’ll really be paying about $40 for that “limited-time offer.” After adding income taxes and social security taxes, you’ll need to make more like $50 to pay for it.

How many hours of work is that for you?

Let’s stop losing sight of how much debt is costing us.

Here’s a trick that could make you look smarter the next time interest rates are discussed. It’s called the “Rule of 72.”

If you ever want to know how quickly your money will double at a specific interest rate (say 6%), divide 72 by that rate. That will tell you how many years it will take before the original amount doubles. At 6%, our money would double in 12 years (72 divided by 6). While it’s not accurate to six decimal places, it is an excellent quick way to figure things in your head.

Related: The Rule of 72 (or How To Easily Double Your Debt)

Let’s stop over-borrowing.

When will they stop lending more money than people should be borrowing?

Lenders will stretch an auto loan to 84 months so you can buy more car (and always be upside down on your car loan).

And what about the millions of young adults and parents who are drowning in student loan debt because they were able to borrow money on nothing more than a promise to repay? Your child will get the education they deserve even if they can’t find a job that will support the steep student loan payments.

Have you fallen for any of these tactics? Let’s all stop making these costly financial mistakes.

Related:

• Moving Past Financial Missteps and Regrets
• How To Break Bad Financial Habits
• Throwing Good Time and Money After Bad
• What Does My Debt Cost Me?
• How The Things We Believe In Affect Our Finances

Reviewed August 2023

About the Author

Gary Foreman is a former financial planner and purchasing manager who founded The Dollar Stretcher.com website and newsletters in 1996. He's the author of How to Conquer Debt No Matter How Much You Have and he's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com.