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10 Ways You’re Sabotaging Your Finances

10 Ways You’re Sabotaging Your Finances

July 15, 2018

We are all worried about our finances and making mistakes. It’s okay to slip up every once in a while and not follow your budget to a T. We need to cut ourselves some slack, it’s how we learn! But we leave ourselves vulnerable when we are consistent with bad tendencies that lead us into traps. Maybe we don’t know that we’re doing it or that what we’re doing is negatively impacting our financial future. Below are 10 poor money habits that can easily lead you into self-sabotaging your finances and financial future. 

1.    You’re Not Budgeting

Think of a budget like a recipe. You can’t make a recipe without having an ingredient list and the proper measurements. Sure, you could wing it. But if you’re not a recipe developer, how do you know it’s going to turn out any good?

A budget is a tool we use for good financial health. It can be as simple as knowing how much money you have coming in each month and how much you have going out. It helps provide guidance on where and how to allocate our money monthly. It can also be an eye opener to weak areas in your spending. Read about budgeting basics here.

2.    You’re Not Paying off Your Credit Card in Full Monthly

Carrying a credit card balance is not going to get you ahead financially. First, interest rates are obnoxiously high (and continuing to rise as the fed increases rates). Two, that’s less money you have in your pocket to do something productive with. Three, cash is king.

By carrying a credit card balance from month to month, you’re subjecting yourself to more and more interest. You’re also impacting your credit score.

Having a credit card payment lingering over your head is very constricting. Your goal when you get paid should be “how can I better myself with this money” not “who do I have to give my hard-earned money to this month.” Wouldn’t it be nice to have one less person to pay each month, so you can start paying yourself?

3.    You Don’t Have a Debt Repayment Plan

We all know debt is (typically) bad. Establishing a plan helps you see the progress you’re making, and you’ll likely get out of debt faster. It is a great tool to help hold you accountable and keep the momentum going.

Not only will you feel good about the journey of paying down debt, you’ll save on interest too. Getting started on paying down debt is the hardest part. It likely means we need to come to terms with how we got there. But once you start, you’ll wonder why you didn’t start sooner.

4.    You Don’t Have Any Money Goals

Maybe you want to buy a house someday. Maybe you want to take a 10-day trip to Europe next year. Or maybe you’re sick of your student loans and you want to aggressively tackle them. Great. But what good is wishing for something if you’re not going to take any action?

Set actionable goals to motivate your journey to getting there. Write them down. Make them quantifiable. As creatures of habit, we get stuck in ruts. Money goals give us a purpose and make us work harder for our money.

Click here for common goals for millennials.

5.    You Don’t Have an Emergency Fund

Things come up – your tire pops, you need to pay an unexpected medical bill, your air conditioner calls it quits, or you lose your job. Emergencies can ruin a budget. And if you aren’t prepared, you might go into debt (or more debt than you already are!) trying to get through it.

An emergency fund is there to protect you, so you don’t get set back financially. Wouldn’t it be nice to be able to have an extra $100 for a tire repair or pay that $1,500 medical deductible without having to break a sweat worrying how you’ll pay for it? Have an emergency fund to protect yourself from life’s unknowns. You will feel a new sense of pride knowing you’ll be okay the next time something comes up.

6.    You’re Not Saving for Retirement

Millennials. You are in the best position of your life right now. Why? Because you have TIME. Would you rather put away $1,000 per year for 10 years and up with over $300,000 by the time you retire or put away $1,000 per year starting at age 40 until you retire at 70 and end up with $130,000. Personally, I prefer the former. (read that post here).

If you start saving today, you don’t have to save as hard later in life to meet your retirement goals. It is hard to want to save for something that we don’t need for 30+ years. But the point is if we start now, we don’t need to put in as much and we develop healthy habits along the way. Your future self will thank you.

7.    You’re Not Saving at All

I think you know by now, that if you’re not saving then you’re not doing anything to better your financial wellbeing. Saving provides opportunities. Early retirement, dream homes, dream vacations. What is something that gets you excited?

If we’re not saving, we’re spending everything we earn. And this leaves us vulnerable to lifestyle inflation or even spending more than we earn.

8.    You’re Using Credit Cards Instead of Cash (In an Irresponsible Way)

I’m firm on the fact that if you don’t have the cash for it, you can’t afford it. Just because you have the credit card line available to purchase it, doesn’t mean you can afford it. I don’t care if that money is “expected” to come in next month. Using a credit card to fund a purchase you wouldn’t be able to pay for out of pocket is a dangerous rabbit hole to explore.

9.    You’re Spending More Than You Earn

This is a sign of poor financial health. If you are spending more than you earn, then you are certainly digging yourself into debt. What can you do to widen the gap? Can you cut your expenses? Go on a month-long spending freeze or write down all your purchases for a month to help analyze your spending weaknesses. Making sacrifices is key here.

Maybe you’ve done all you can to cut expenses and income is the issue. Can you start a side hustle? Pick up a part time job temporarily? If you can’t cut expenses, then the next solution is to make more.

10. You’re Not Practicing Delayed Gratification

This is the hardest thing for millennials to grasp. We have so many things right at the tips of our fingers and it’s all too convenient.

Why delay getting something until later when we can have it right now? Because if we wait just a little bit longer, we can have a lot more. Patience and discipline are great qualities to possess, especially when it comes to finances. You will provide yourself with endless opportunities and a full life.


How do you compare to this list of 10? Don’t sweat it if you answered yes to a few of them. The point is to recognize where you need to make improvements and take action. 

Carolyn Rowland is a CERTIFIED FINANCIAL PLANNER™ passionate about empowering individuals to take control of their financial landscape. “We often tend to place our own priorities on the back burner for others, resulting in sacrifices we don’t often realize we’re making.”Carolyn believes in taking a values-based approach to financial planning. “Together we’ll define what matters most to you, what you want your life to look like, and develop a plan that fits your lifestyle.”

Carolyn Rowland is in the Milwaukee WI, area.