4 Avoidable Money Mistakes to Stop (Today!)

avoidable money mistake

Money mistakes are everywhere. What’s worse is that avoidable ones exist. I’ve made countless avoidable money mistakes in the past and will continue to make mistakes in the future. However, I’ve been able to fix some of the habits after going back and analyzing my spending behavior. I’ve found some common ones that I used to make and some that I’ve seen people do. I’ve highlighted some of them below that can be fixed just by doing something differently. One avoidable money mistake snowballs into bigger ones down the road so it’s better to fix them right away!

avoidable money mistake

Avoidable Money Mistake #1: Credit Cards

Not Using Credit Cards

Avoidable Money MistakeI started using a credit card when I was a Sophomore in high school10 months AFTER I turned 18. That’s 10 months worth of spending that I could have gotten rewards on  plus time that could have built my credit history. I should have applied for credit cards earlier that pays me money for spending money on things I need.

Not only do I love credit cards for the rewards points, I love credit cards for giving me extra time to pay off my expenses. It boggles my mind that I can pay almost 2 months later (depending on when I make the purchase) for something that I bought today. Without paying interest. I learned in my finance classes to always take interest-free debt, which I gladly do every month. 

Not Paying the Full Balance

It’s all well and good that my credit cards give me extra time to pay off my expenses and a great cash back rate, but not if I make a purchase that I can’t pay off when the statement bill comes. Credit card interest rates can range anywhere from 10 – 25% APR, depending on credit history and other factors.

Not paying the full balance off every month defeats all of the hard work  you’ve put in to research the best cash back credit cards and the rewards you reap. It also worsens your credit score, that the future you will pay for.

Not Optimizing Rewards

This one took me some time to figure out, but it was worth taking the time to follow a simple 2 step process. First, when I spent money, I paid attention to the categories that I was spending the most money on. Groceries were my highest expenses, then restaurants, then Amazon, and so on.

Second, I specifically looked for credit cards that offered extra cash back rates for those categories and had no annual fee. Credit card companies profit off my spending, there’s no reason to pay them more.  

For example, AmEx Blue Cash (not preferred, I don’t want to pay an annual fee) is offering a 3% cash back rate on groceries (my most expensive expense!) and a 2% cash back rate on gas. I signed up in a heartbeat. They emailed me 2 weeks ago that they’re offering a 6% cash back on groceries and 3% cash back on gas. I’m not changing my spending behavior, so I will gladly take those extra rewards! 

I have a credit card that pays me back 2% of my spending. So my minimum cash back rate is 2% when there are numerous credit cards out there that only pay 1% cash back. Then if I factor in my rotating 5% cash back credit cards, I increase my rewards. Last quarter, I got paid an extra $25 for spending money in restaurants (plus a sign up bonus of $150 that I met). It’s not earth-shattering by any means but it’s 1000% better than nothing.

Avoidable Money Mistake #2: Paying Retail Price

Using Cash Back Portals

By using my credit cards, theoretically, I never pay full price for any purchase. I get 2% off the top. However, when shopping online, I look to do better than that. I always do a quick check on eBates (affiliate link) before I make a purchase. I get an extra 2 – 50% off, depending on the retailer on top of my 2% credit card discount.

If you sign up through my affiliate link on eBates, you get an extra $10! As a result of this service, I never pay full price when shopping online and earn an extra $150 a year.


I’m a big fan on negotiating. I negotiated for my car and my phone bill in the past 4 months and was (somewhat) successful on both of them. It’s somewhat successful because they weren’t jaw-dropping deals but it was something that was better than nothing. I saved about $300 in total just by asking (I wasn’t skilled by any means) and didn’t pay full price.

Avoidable Money Mistake #3: Company Benefits

Not Having a Beneficiary

I encourage everyone to take advantage of investing in 401k’s if your employer offers them. They save me a ton of money on taxes plus after a year of working, my employer matches up to 3%. While that’s all well and good, the balance could be up for grabs if I don’t list a beneficiary and something were to happen tome. If I hadn’t listed a beneficiary to my account, the balance would be at the mercy of my retirement plan. It would go through a drawn-out legal process before distribution, which may or may not go to my family. 

Withdrawing Before 59 1/2

Withdrawing before you’re 59 1/2 means that you have to pay a 10% early withdrawal penalty fee. There are ways to avoid this penalty fee that Be Net Worthy highlights here but even then, you can’t take out funds all at once whenever you want. If you want to take out a lump sum, the 10% early withdrawal fee can’t be avoided. The penalty ruins the hard work you’ve put in to save money, pre-tax.

Avoidable Money Mistake #4: Ignoring Additional Income

The average millionaire has 7 streams of income. I have 1 right now. I saw a post early by the penny hoarder that Target is hiring  70,000+ seasonal workers and I might apply to get a little extra money. On top of this, my employer pays me extra money to stay healthy and fit. I’m also looking into some survey websites to make a little extra cash. With the internet available these days, there’s endless income opportunities! We just have to take the time to find it.

I take advantage of Google Screenwise Panel (now known as Cross Media Panel) and make an extra $104 a year doing nothing. Also switching your banks (I now use Discover Bank) that pays more interest helps. I made an extra $200 last year just by switching from a bank that paid a whopping 0.01% interest to Discover that paid out 0.95% a year. 


There are countless money mistakes that I’m probably going to make going forward. What’s important is that I recognize these mistakes and fix them so that I can have a little extra cash at the end of the year. Having a little extra doesn’t hurt! 

Readers, did I leave anything out? Is there an avoidable money mistake that you feel should be included? Let me know in the comments below!

Finance Solver

I grew my net worth to $40,000 as a college student through hard work, discipline, and a little bit of luck. I graduated college in 2016 and will be starting to plan for my retirement once I start working.I am planning on reaching financial independence by my early 30's and I will document my moments of inspiration all the way to desperation here.

My goal is to enable your success in personal finance so that you can realize the American dream. The first step is starting today!

Read more about me here.

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12 thoughts on “4 Avoidable Money Mistakes to Stop (Today!)

    • Finance Solver says:

      Nice! I don’t understand how people willingly pay full price when there are other deals that they can take advantage of. It boggles me to this day. I like checking retailmenot for any quick coupons too if I’m ordering any food online!

  1. Many people are so apprehensive of credit cards as certain people, Dave Ramsey, are completely against them. They are good if you are responsible otherwise don’t use them.

    I can’t wait to start working and contribute to my company’s 401k. We have a small probation period but it will be worth the tax savings

    • Finance Solver says:

      When I was in elementary school, my math teacher told me that credit cards are bad because of the interest. So I proceeded to convince my mom to not use credit cards but she countered back saying that credit cards were good. Now that I know how credit cards work, I realize that my math teacher used credit cards beyond what she could afford. I’m so glad that I understand the positives and negatives of credit cards and religiously use them to my benefit.
      Man you’re gonna love having the steady paycheck! Do you get matching as soon as you start? That’s where the real benefits lie, ha.

  2. We use credit cards for the rewards and pay them in full each month. I keep track of exactly what we have charged so I’m never surprised by a bill.

    We’ve totally neglected having multiple income streams. If we had done this sooner, we’d be retired today. But, we’re working on it now – better late than never.

    • Finance Solver says:

      It’s always better late than never! I’m having a hard time trying to figure out what my second stream of income should be but if it was easy, I think everyone would do it so I’m taking my time and doing more research during the process.

      That’s also what I call responsible credit card spending. I’ve been spending more than usual on my credit card recently but that’s because of one-time costs that I hope I don’t incur in October. Thanks for stopping by Amanda!

  3. “The average millionaire has 7 streams of income.”

    That’s an interesting stat, do you remember where you heard that? Kinda curious to read more about it. Do you think those are mostly passive forms of income rather than active like your Target job example? Ie. investments, real estate, businesses, etc…

  4. “I made an extra $200 last year just by switching from a bank that paid a whopping 0.01% interest to Discover that paid out 0.95% a year.” I love hearing people taking advantage of these “easy wins.” An extra $200 is nothing to joke about – nice job!

    • Finance Solver says:

      Yes sir! It definitely wasn’t harder to switch to Discover, it was just something different that I implemented. I won’t complain about any extra money that comes my way!

  5. Nice job making your money work for you as good as it can!

    I fully agree with nearly all of them, and we try to do most of them ourselves. The only one we’re not doing is having a credit card. We would of course pay it off every month, etc. The main reasons we don’t are that Australia cards don’t have as much rewards (and the rewards are being reduced even more with a recent Govt change where card providers can only charge the cost to do the transaction, nothing more). We also don’t want to think we can/should spend more than what’s in our account (so that it doesn’t encourage us to spend). And thirdly, it doesn’t sit amazingly well with me that the shops I’m buying stuff from are paying for me benefits. But that’s just me 🙂


    • Finance Solver says:

      Thanks Tristan! I had no idea that rewards programs are so different across countries. It almost doesn’t make sense to get a credit card then.. do people look at credit scores when deciding what rate to price for a mortgage though?

      I didn’t want to feel like I had more spending power too once I had a credit card but I never thought about my credit limit when I was looking to make a purchase, and instead just asked myself if I needed it and I think that helped in keeping my spending low. It’s great that you’re thinking about what makes the most sense for you!

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