Common Financial Mistakes Clients Make

By Vanessa Love

This is from my own observations.

1. Not knowing their budget or not creating a budget.
   If a person doesn’t know what they are spending, then it’s easier to spend all their money or spend without thinking. If someone said that they wanted to put aside $100 per month but they didn’t know where the rest of their money is going or even if they have the money to put aside for savings then they can’t properly figure out what is going on with their money.
2. Unrealistic Expectations
   Some people will say things like “I want to buy a Tesla,” which is a cool goal. But if they only have inconsistent part-time work, under the table work, or have issues getting work, getting to work, or a lack of housing, then it’s unrealistic if they want to buy a Telsa.
3. Renting Unofficial Apartments
   People who are in a bad spot sometimes have to go with the cheap and often, unhealthy options. They might not have running water, or have to deal with mold or issues with crappy landlords because they are trying to have a place within their budgets.
4. Spending Money on Drugs or Alcohol
   Everyone has their vices. For some, especially those with addictions, they’ll spend any extra money on their vice. For others, it’s a means to escape the stress of not having or being able to make enough money.

5. Giving Money to Friends, Especially Those With Kids
I’ve seen a lot of good people lied to about where their money is going. For example, an ex-dancer might be aware of when a friend gets paid and wouldn’t you know it, she needs at least $200 at that moment for medication or food for their kid, or when they need money for a long car share somewhere and they don’t talk to their friend for a while. These are usually good people who work hard and try to save up for small things for themselves.

6. Not Understanding Debt.
Some people don’t know that they can pay off debt, make payment arrangements, and that it’s OK to have debt sometimes. Some people have to understand that a steady income is helpful in havin debt in the first place.
7. Not Having a Bank Account
Some people end up having issues with their bank accounts and have heavily penalized for it. There are a couple of ways to work toward having a bank account. People can dispute this or wait out the time before they can get another bank account.
8. Not Having a Credit Card or Not Working on their Credit
Some people are just unaware of what it means to have credit and how credit can determine a lot of things later on in life. For example, the people who might want a Tesla, will also want to work on their credit in order to qualify to get a loan for one. Some people might choose to pay cash, especially if they don’t have a bank account– but that seems like a lot of money to have around.
9. Not Having a Rich Mindset
Rich people tend to have multiple bank accounts, use their credit cards and pay them off before interest kicks in, have loans, might have businesses or even bankruptcies, have investments, retirement accounts, life and other types of insurances. Many people who do not have a steady income or have difficulty with money would have a tough time making these things work for their lives. Many rich people understand the way money works and often feel that they can make money work for them.
10. Not Filing Taxes or Not Understanding Taxes
Many people feel that taxes are complex and for that reason, they don’t bother filing taxes. When a person makes enough to pay taxes, they might want to consider going to an accountant or doing their taxes on their own through various websites that allow people to be guided through the tax form process. Even though it seems like a hassle, especially when there are issues with money that the person doesn’t want to confront, it’s beneficial to do taxes. Taxes are used for buying houses and sometimes requested by apartment applications. Eventually, taxes become important to a person’s life.