Jaspreet Singh: Don’t Let These 7 Money Traps Keep You Broke in 2026
Written by
Ashley Donohoe
Edited by
Rebekah Evans
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A Vanguard survey found that only around 25% of Americans succeeded with meeting their spending and savings resolutions last year. While the majority is confident they’ll succeed in 2026, they’ll likely need to make the right changes to improve their finances.
In a YouTube video, licensed attorney and entrepreneur Jaspreet Singh explained several money traps that will keep Americans broke in 2026. Here are top mistakes you should avoid and Singh’s wiser suggestions.
Getting a 50-Year Mortgage
While the recently proposed 50-year mortgages may seem like a good solution for more affordable payments, the higher interest paid over the long term makes them a bad deal.
Singh used an example of a $400,000 mortgage at a 6.5% interest rate. With a 30-year term, you’d pay around $2,022 each month, with total interest of around $408,000. Your monthly payment drops to around $1,803 with a 50-year term, but you’d pay around $763,000 in interest.
If you plan to buy a home in 2026, consider choosing the shortest term you can afford, making a sizable down payment and having a realistic home budget. You can experiment with Fannie Mae’s mortgage calculator to see how different factors would affect your monthly payment.
Waiting To Invest
“You can keep some money on the side for when the market crashes, for when the recession happens, that way you can capitalize on it,” Singh said. “But what’s been proven throughout history is that waiting is often a losing game.”
If the current stock market has you delaying investing since you’re worried about a bubble, you could miss out on major wealth-building opportunities in the long term. While NYU Stern’s data showed that the S&P 500’s performance has varied widely since 1928, the average return remains around 10%.
That’s why Singh suggested taking the “always be buying” approach, meaning you’re in it for the long term and consistently invest regardless of market conditions. He also discussed automating the purchase of index funds, such as SPY, VTI and QQQ and leaving them alone.
Financing a Car
Experian reported that the average new car payment in the third quarter of 2025 was a whopping $748, which could quickly eat up your budget and leave you broke. Plus, Singh noted other drawbacks, such as depreciation, interest charges, phantom costs and the car’s limited lifespan.
According to Singh, if you invested the average car payment amount each month and got a 10% return, you’d have around $1 million in 25 years, $1.6 million in 30 years and $4.4 million in 40 years. That’s much better news for your wealth than a vehicle that is eventually worth nothing.
Rather than getting a car loan, take Singh’s advice and save up cash for a decent vehicle, like a Toyota Corolla or Honda Accord. Once you’ve built wealth, you can afford the fancier car.
Not Studying AI
If you’ve been looking for a job, you may have had a harder time due to AI-related hiring freezes and automation that has eliminated some entry-level roles. Singh even noticed that his own media business was vulnerable to AI, so he decided to pivot to fintech to future-proof it.
To stay competitive for a job and build wealth, don’t underestimate the importance of learning about AI. Singh recommended studying prompting, learning how AI can make you more productive and considering the impact of the technology on your investments.
Falling Into the Tax Refund Trap
“The funny thing about your tax refund is it’s not free money,” Singh explained. “It’s money that you overpaid to the United States government that they then kept without paying you any interest that they’re just now paying you back.”
Since your tax refund is your hard-earned cash, resist the temptation to spend it on wasteful purchases. Instead, Singh advised using it for savings, debt payoff or investments. Plus, consider using the IRS withholding estimator and updating your Form W-4 to avoid a refund.
Making Minimum Payments
While your financial situation might only allow you to pay the minimum on your credit cards and other debts, this practice keeps you broke due to the interest charges. You can ultimately pay double or more of what you originally borrowed.
According to this calculator by GreenPath, if you had a $2,000 credit card balance with a 25% APR and made a $80 minimum payment, it would take 122 months to pay off and cost you $3,926.50. That’s a high price and over 10 years of giving up part of your income.
Singh suggested increasing your income and cutting expenses to pay down credit card debt. Part of that might also involve learning new skills that help you advance at work.
Falling Into the High-Yield Savings Trap
Using a high-yield savings account is smart for your emergency fund, as it’s safe and can offer interest rates of up to 4% or 5%. However, Singh discussed how the Fed’s rate cuts lead banks to lower their deposit account rates and how income taxes further reduce your real return.
When you consider these factors and the annual inflation rate — which was 2.7% in Nov. 2025, per the U.S. Bureau of Labor Statistics (BLS) — you may get much less than you thought. For example, if your online bank offers a 4% APY, your inflation-adjusted return would be only 1.3% before taxes.
Therefore, always check for the best high-yield savings account rates and consider investing excess cash in assets that build wealth more efficiently.
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