If you want financial freedom, stop making these 7 money mistakes

If I’ve learned one thing from juggling multiple small businesses, it’s that taking control of finances demands some serious self-awareness.

I’ve scrolled through Instagram and come across posts that oversimplify the path to wealth: “Buy this program and you’ll be rich in six months!” or “Just do dropshipping and watch the dollars rain!”

Plenty of hype, but little honesty about the daily habits that actually help one feel secure with money. Over time, I realized that many people (myself included) commit money mistakes that can slow down or even sabotage long-term prosperity.

I’d like to share 7 money mistakes I used to make—or see others make all the time—and talk through how we can switch things around.

1. Spending as if there’s no tomorrow

I remember the time I landed my first big writing contract years ago. The paycheck was more than I had ever seen in one lump sum.

Naturally, my mind instantly jumped to “treating myself.”

I’m all for the occasional reward for hard work, but the trouble starts when purchases pile up. Those repeated little splurges can become a habit.

A fancy dinner here, a new gadget there, and suddenly the last day of the month arrives with little left in the bank.

To truly feel financially secure, I’ve had to differentiate between what I really need and what’s just a passing desire. Simon Sinek once said, “There is a difference between listening and waiting for your turn to speak.”

That resonates with finances, too.

Sometimes I catch myself just waiting for another pay period to give me permission to indulge, instead of honestly looking at whether this purchase benefits my life in a meaningful way.

Building intentional spending habits can do wonders for preserving funds for things that truly matter—like investments, family vacations, or that next big business idea.

2. Piling up credit card debt

I have a love-hate relationship with credit cards. They give me points, cash back, and immediate purchasing power.

But using them recklessly can lock you into a cycle of high-interest charges.

Back when I was younger and less experienced, I had a card with a modest limit, and I frequently carried a balance that I pretended would magically disappear.

Spoiler alert: it didn’t.

The tricky part is the mindset.

If there’s a card in my wallet and I see it as “free money,” I easily lose track of how much I’m spending. There’s no physical reminder of how many bills are leaving my pocket.

One small change that helped me was literally freezing my card in a block of ice—yes, that was a thing for a while. It forced me to think twice before making a purchase because I had to thaw the card to use it.

I don’t recommend that extreme measure for everyone, but simply making a rule to pay off the card balance in full every month (or never charging what you can’t pay off) can keep credit cards in the helpful tool category instead of letting them become a burden.

Regularly reviewing statements and setting up notifications on your phone can also be a lifesaver.

3. Failing to track expenses

I used to assume I “knew” where my money went each month. But the moment I started an actual tracking system, I was floored to see how quickly small charges added up.

That daily latte habit was costing more than I expected. The digital subscription charges I forgot about were quietly siphoning away funds.

And I realized I was overspending on groceries because I wasn’t planning meals properly.

Tracking doesn’t have to be complicated. It can be as simple as writing down purchases in a notebook or using an app. The goal isn’t to feel miserable about spending, but to have a clearer picture of where the money is going.

This step alone makes it easier to identify where you might cut back or redirect funds into savings or investment accounts. It’s almost like giving yourself an instant raise because you’re no longer leaking money.

4. Skipping the emergency fund

At one point, I was so focused on growing my side hustles that I funneled every spare cent into new business ventures. I thought I was being bold and entrepreneurial.

Then the family car suddenly needed major repairs. My only options were to run up my credit cards or dip into funds earmarked for bills.

Having an emergency fund—a separate chunk of money set aside for life’s inevitable curveballs—can save you from scrambling when something goes wrong.

It’s often recommended to have at least three to six months’ worth of essential expenses stashed away.

The exact amount will depend on your circumstances, but the concept is the same: keep it accessible, and resist the temptation to dip into it for non-emergencies.

I’ve noticed a trend on social media challenging people to do an “emergency fund challenge,” trying to save a certain amount by the end of the year.

While hashtags and challenges can be motivating, I’ve found it more helpful to automate a portion of my paycheck or business income to go directly into this fund every month.

That way, it grows steadily without any extra effort on my part.

5. Chasing get-rich-quick schemes

In my early 20s, someone tried to convince me that trading penny stocks overnight would make me financially independent in a matter of weeks.

I was a bit skeptical but also curious because I craved a shortcut to success. Looking back, I’m relieved I didn’t put a large sum into that scheme.

It’s tempting to jump into the next “exclusive opportunity” or hot investment tip that seems to promise immediate returns. The reality is that these shortcuts can lead to significant losses.

True financial stability usually comes from consistent actions over the long haul—saving, investing in reputable funds or startups, and continuing to refine your skills so you can earn more.

Some say you can get lucky on a quick deal, but luck isn’t a reliable strategy.

I’m reminded of something Jordan Peterson once mentioned about structuring your life in a way that is sustainable. Quick-fix approaches often ignore that principle.

If something sounds too good to be true, it probably is. Research, ask questions, and remember that building wealth is a process, not a sprint.

6. Neglecting to invest properly

My biggest regret is not starting to invest sooner. For a while, I delayed investing because I felt intimidated by the jargon—stocks, bonds, mutual funds, crypto, index funds, you name it.

It felt complicated. But when I took the time to read a straightforward book on personal finance and started watching some beginner tutorials, I realized it wasn’t as scary as I’d assumed.

The key is to keep it simple at first. Some people go with index funds because they’re diversified and often have lower fees. Others might invest in real estate, or they’ll use platforms that allow them to buy fractional shares.

Either way, the point is to do something that moves you forward.

Compound interest can be a powerful ally for your future.

I once chatted with a friend who started investing $50 a month in a retirement account in his 20s. He told me he didn’t miss that money after a few months, and the account started growing in a way that encouraged him to contribute more over time.

So, yes, sometimes, the best approach is to start small and grow from there.

7. Ignoring ongoing financial education

I used to see money as this rigid, never-changing concept, but life continually proves otherwise. Economic conditions shift, new technologies pop up, and there are more ways than ever to start a business or invest.

Simply sticking to the same methods without updating my knowledge didn’t serve me well.

The more I kept reading, listening to podcasts, and talking with mentors, the more I realized that the learning process never stops.

One weekend, I took a short online course about behavioral economics (a subject I adore reading about in my spare time).

It illuminated a lot of sneaky psychological traps that can derail good money habits. Being aware of these tendencies—like loss aversion or the tendency to follow the herd—helped me become more intentional when making financial decisions.

I also found that discussing money openly with my spouse brought clarity. We now have monthly check-ins where we review goals and talk about what adjustments need to be made.

If you’re pressed for time, even a quick 15-minute daily read or a weekly podcast can broaden your perspective.

Books by Malcolm Gladwell or even following finance-focused Twitter threads can spark ideas on spending, saving, and investing.

Wrapping up

I still remember the days when my financial life felt messy, like I had little control over where my money went or how it was working for me.

Over time, I realized these seven mistakes played a huge role in keeping me stuck. Addressing them wasn’t always easy. It took discipline, a willingness to face some tough realities, and sometimes even changing habits I’d carried for years.

But each step helped build confidence.

I like to think of financial security as an ongoing journey that can transform your relationships, your health, and your outlook on life.

When money worries stop constantly gnawing at you, there’s more energy to spend on passion projects, family events, and the everyday joys that make life meaningful.

Making small shifts in spending, saving, and investing can snowball into significant gains over time.

Here’s to building a more secure future for ourselves and the people we care about!

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Picture of Emily Rhodes

Emily Rhodes

Emily Rhodes is a writer and researcher exploring how mindset, behavior, and technology influence entrepreneurship. She enjoys breaking down complex psychological concepts into practical advice that entrepreneurs can actually use. Her work focuses on helping business owners think more clearly, adapt to challenges, and build resilience in an ever-changing world. When she’s not writing, she’s reading about behavioral economics, enjoying Texas barbecue, or taking long walks in nature.

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