5 Mistakes That Are Making You Lose Money, According to a Self-Made Millionaire
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Gabrielle Olya
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Molly Sullivan
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Bernadette Joy, a financial coach and self-made millionaire, believes that in order to start building the money habits required to gain wealth, you first need to break the bad habits that are causing you to lose money. You could be guilty of many of these habits without even realizing the toll they are taking on your financial health — but it is possible to break them.
According to Joy, here are the biggest mistakes that are causing you to lose money.
Comparing Yourself to Others
We are all guilty of wishing our lifestyle looked more like what we see on Instagram — but making these comparisons is a mistake.
“One of the biggest money mistakes [is] basing your financial goals on what you think other people are doing,” Joy told GOBankingRates. “Social media makes it easy to compare your finances to someone else’s highlight reel — whether it’s vacations, new cars or luxury purchases.
“But you don’t see their bank statements or credit card debt,” she continued. “This is exactly why I advocate for ‘Screenless Sundays’ in my book. Take a break from the noise and focus on what you actually want your money to do for you.”
Tackling Too Many Financial Goals at Once
In her book, “Crush Your Money Goals,” Joy said that another common mistake is trying to juggle too many financial goals at one time.
“Juggling too many goals is a recipe for feeling overwhelmed and slowing down your overall financial progress,” she wrote.
Instead of trying to build an emergency fund, pay off debt, set aside money for your kid’s college fund and save money to buy a new car all at once, prioritize your goals and focus on one at a time.
“Rather than think of all your money goals as separate entities, think of them as milestones that need to be in priority order,” Joy wrote. “Finish one milestone, then move onto the next. Not only will you get there faster, but you will also enjoy yourself along the way.”
Giving Out Things for Free
Many of us are guilty of “giving out discounts nobody asked for,” Joy wrote. “It’s time to put an end to this habit that is literally costing you thousands.”
This habit can look different in different scenarios. It can mean undercharging people for your services, accepting less pay than you are qualified for, overdelivering at work without getting additional compensation, saying “yes” too often, taking on trivial tasks that don’t pay as well as more meaningful work or accepting burnout as a part of life.
“Stop giving discounts on your time, energy and mental well-being,” Joy wrote. “Your net worth and self-worth will grow by leaps and bounds if you value your life accordingly.”
Being in Debt Long Term
Many of us will find ourselves in debt at some point in our lives, whether we have student loans hanging over our heads or credit card bills that we can’t pay in full. Although having debt is common, you should not accept being in debt as a long-term way of life, Joy wrote.
“Relying on debt to get you through challenging times doesn’t need to be your default habit,” she wrote. “Paying for big purchases outright will absolutely change the way you manage your money forever.”
If you do have to take on debt, make sure you give yourself a deadline for paying it off in full.
“Debt keeps you living in the past,” Joy wrote. “Starting now, think of debt as a last resort, not the first option you turn to when a financial challenge comes your way.”
Letting Fear Guide Your Money Choices
The final bad habit Joy outlines in her book is being guided by fear rather than freedom when it comes to your money choices.
“If you find yourself hesitating and second-guessing financial choices, fear is probably dictating how you manage your money,” Joy wrote.
Some of the most common money-related fears Joy has seen among her financial coaching clients are fear of judgment from friends and family, fear of losing money, fear of failure and even fear of success.
“I learned that success has a high price for many people who are afraid to leave family and friends behind,” Joy wrote.
Once you’ve identified your money fears, you can start facing them head on.
“The one thing that I ask you to do is to choose to fight these fears,” Joy wrote. “It simply means acting intentionally and thoughtfully when your first instinct might instead be to flee, freeze, fawn or freak out.”
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