Common Money Mistakes (and How to Avoid Them!)

Money is a learning experience: From our first job, financial losses, splurge purchases, or extravagant vacations. We’ll all make mistakes along the way, while understanding that it can be challenging.

Once we recognize and address common pitfalls, it helps us start building a secure financial future. Whether you’re just beginning your journey or looking to deepen your understanding, The Big Portfolio’s mission is to equip you with the knowledge and confidence to take control of your financial future.

In this blog, we’re diving into 3 the three common money mistakes we’ve seen (and experienced) and strategies to tackle them today.

Subscription Creep

With a new era of the subscription-based model, it’s inevitable that we’ll all be subscribing to something. From streaming platforms, software, magazines, digital storage solutions, apps and more, the slow, and often monetarily small, subscriptions add up significantly. And the truth is, most of those subscriptions are unused or rarely used. Does that sound like you?

Address the recurring charges by conducting a monthly (or quarterly) audit of your subscriptions to cancel the ones you no longer use. Or perhaps, find ways to share subscriptions and eventually cut the costs while still having access.

Skipping an Emergency Fund

An emergency fund is cash saved up in case of any unexpected costs. This could be anything from a new device in case yours breaks down, surprise costs to repair your car, family emergencies or job loss. When emotions may already be prominent in those unexpected times, you shouldn’t have the added pressure of finances too. Based on your current lifestyle and budget, calculate a sum that feels good to have on hand. This can often be your monthly costs multiplied by three to six months. Then, start by setting aside a fixed amount each month in a dedicated account.

Be proactive and your future self, regardless of what comes your way, will thank you for it.

Falling Into Lifestyle Inflation

Lifestyle inflation creeps up on us once we start making more money. Think of it like a raise, promotion or new job with a signing bonus. Instead of keeping our lifestyle the same, we think we should spend more with our new funds. This could be renting a bigger condo or increasing dining out budgets, perhaps even taking an Uber more often than we should. To avoid this, set a rule to save or invest a specific percentage of every pay raise before adjusting your spending habits.

Empower your financial future with The Big Portfolio’s card collection, your personal finance toolkit.