You dream of traveling, experiencing financial freedom, and being able to handle unexpected expenses. ….but your bank account isn’t where you want it to be. You never have enough money for necessities or what matters to you like an electric car. You fear you’ll miss out on having your own home one day. You make a decent income but somehow have nothing to show for it!
You constantly think, “I’m gonna do the dang thing. I’ll pay off my debt and save money!”
And promptly nothing happens.
Here’s three money mistakes you can’t afford to make
Mistake #1: No Accountability
Once you’ve reached adulthood, there’s no structure or a set path. Life’s not divided by six-week report cards, semesters, and summers. There isn’t the high school varsity team to make or certain SAT score to reach to get into your dream college.
With money, to reach your goals you need to set your own personal deadlines. Unfortunately, there’s no handbook to adulting of when to buy a home or how to pay off debt.
You need accountability and deadlines.
For example, if I’m out of shape the best way to get back in shape is to commit to running a race. I’ve completed four marathons and a half marathon. Purchasing my race registration was the skin in the game for me to commit to training, because I knew the race day was coming up.
You achieve objectives in the time frame you allocate for yourself. For example, during Best Money Class Ever, there’s a debt calculator. It shows how exactly to get out of debt in 36 months or less.
Amazing things happen when you have a plan with a deadline.
The Fix: Become CFO
CFO’s and accountants account for all the financial transactions in a company. People always ask, “Carly what app do you use to manage money?” Financial statements are life changing money tools. It’s what the Fortune 500 (billion-dollar companies) use.
I freakin love financial statements! There are three financial statements you can use to get the accountability with money:
1. Balance Sheet- snapshot of where you stand with money
When you become Chief Financial Officer and use financial statements you’ll have built in deadlines when you think in terms of fiscal years, quarters, and months.
Money Mistake 2: Waiting
Your internal dialogue is, “I’ll start investing when I make more money.”
Or “Once I get over this hump from my bff’s destination bachelorette party, then I’ll get serious about paying off debt.”
Then when you get a pay raise you conveniently find more ways to spend money. Heck Careerbuilder.com showed 1 in 3 people making six-figures are living paycheck-to-paycheck.
The Fix: Time is money. Start acting!
There are hard costs of waiting to get your finances in order. For example, if you take the average student loan debt of $37,172, assuming a 20-year repayment with 4.5%, you’d spend $19,268.42 in interest (on a degree you might not even be using).
Not starting a debt payoff plan today is costing you thousands of dollars. With a plan, you can get out of debt in 36 months or less!
If instead of waiting 20 years, you start now aggressively paying off the debt, you’d only spend $2,635.10 in interest. You’d save 17 years of your life (from stressing about money) and $16,660 in interest.
Time is money! You can spend a lifetime paying interest on your debt or earning interest on your investments.
If you pay off debt, instead of $16,660 going to interest on debt, you invest. Over your lifetime (40 years) assuming you earn 8% $16,660 grows to $365,200.
Karen Lamb said, “A year from now you may wish you had started today.”
Overcome procrastination by starting now. Time is money. Get started NOW. Your future self will thank you.
Mistake 3: Living in Denial
The last money mistake you’re making is living in denial. You think, “I’m pretty good with money! My finances aren’t that bad. I make a great income; I can catch up on retirement investing later.”
Or you’re in denial and banking on student loan forgiveness.
Here are four side effects of living in denial with money.
These four side effects of being in denial are modified from 12-step programs like AA.
You’re paralyzed, stuck, and trapped.
2. Lost energy– you try not to think about your financial situation, but your brain can’t forget the reality. The bills still need to be paid. You’re stuck in the past, upset about financial decisions you already made. Or you feel dread towards an uncertain future. The result is anxiety.
This anxiety takes up an enormous amount of energy that physically effects your body. WebMD reports that avoidance and staying in denial can lead to fatigue, headaches, nausea, and stomach pain.
3. Prolonged pain – when you stay in denial about your finances you rob yourself the opportunity to grow. Your financial stress doesn’t need to last a lifetime. With denial you think the amount of time spent dealing with a painful situation is shorten. Instead, you lengthen the pain and time to reach financial security. Denying your finances is slowly ripping off the band aid. It’s a constant struggle nagging at you.
The Fix: Admit you have a problem
To overcome the painful mistake of living in denial first admit you have a problem! Step into your financial reality.
To stop living in denial, get negative! What makes you want to go to a closet and scream at the top of your lungs, “What the finance?!”
What keeps you up at night and is taking up too much brain space?
If you’re like me, life didn’t go as planned. Positive affirmations about debt do nothing except keep you in denial and stop growth. This is the opposite of toxic positivity. Instead of living in denial your financial life’s peachy keen, allow yourself to vent to about money stress.
Keep your mental health in check. You gotta feel the feels! For healing to occur, you need to walk through the pain. You can’t skip around it!
If you’re reading this, then chances are your finances are in the way of living the life you envisioned.
Money’s a major source of stress, anxiety, and depression and impacts you to the core of what you want in life. Money effects simple things like whether or not you can go on a much-needed vacation, to when you get married. You don’t wanna be like, “hey there future Prince Charming, marry me and you’ll inherit my six-figure student loan debt?!”
Or maybe it’s depressing how home ownership is out of reach for you. You desire in your heart to start a family and now the cost of childcare is nothing short of crushing.
