The top 5 money mistakes people make

Michael Yardney
5 min readSep 20, 2021

All of us are guilty of a few bad financial habits.

After all, no one is perfect and rarely are any of these bad habits alone enough to sink us financially.

But add them up and over time these small leaks can sink your financial ship faster than you can say “bad credit rating”.

The thing is, money management is a skill that we have to learn but, unfortunately, it’s usually one that comes from the school of hard financial knocks.

This may seem obvious, but I have to start with it

You must learn how to manage your money, and how to grow it, if you’re ever going to be financially free.

So here are five common money mistakes I see people make:

1. Having too much month at the end of the money

That’s not a typo.

What I mean is that far too many people spend everything they earn — and more — and are left with nothing by the end of the month.

They have never learned how to live within their means and they’ve certainly never learned how to save.

One of the biggest mistakes they make is when they run out of their own money, they simple use someone else’s instead and that’s usually the banks via their personal credit cards.

And what does that mean?

Well, it means they started the month with, say, $5,000 and ended it with -$1,500.

2. Not having a budget

Let me be clear: the reason why they ended up worse off at the end of the month is most probably because they don’t have a budget.

Here’s a startling, but true fact: Most people have no idea how much it costs them to live every month.

Sure, they may understand how much their rent and utility bills are, but they don’t include living costs such as their daily coffee or coffees into their calculations.

Perhaps they spend $100 on lunches every working week and then can’t understand why they’ve got $400 less than they thought they would at the end of the month.

One of the keys to financial success is the creation of a budget.

One of the other ways to become financially independent is the actual sticking to it.

3. Plastic not fantastic

A very common money mistake is people using their credit cards like its free money.

Let’s face it: It’s not free money.

It’s actually very expensive money!

Using your credit card for miscellaneous or impulse spending is never a good idea.

Why is that?

Firstly, you should be sticking to your budget, of course, and secondly unless you pay off the balance of your credit card every month those $250 shoes will soon cost you a whole lot more because of the sky-high interest rates on credit cards.

There is nothing wrong with credit cards as long as you pay off the balances in full every month and don’t get caught in the cycle of only paying the minimum because you’ll never get ahead when you’re always behind.

Remember, the available credit on your card is not your money — it’s the banks money.

4. No education

Here’s the thing: Financial literacy is vital if you want to get ahead in life but it’s not taught in schools and it’s rarely taught at home either.

No wonder so many people get it wrong!

Our society has long had an unhelpful philosophy were talking about money is deemed bad and even immodest.

The problem with that mindset is that if no one talks about it, no one learns about it, and few people ever make the most of what they have financially.

Make it a priority to become financial literate and pass on what you learn to younger generations so they can benefit from your wins and your losses.

5. Waiting for the “perfect time” to invest

As I frequently say, it’s not about trying to time the market that matters the most, it’s time in the market!

One of the most common money mistakes I see people make is they wait and wait and wait for the “perfect time” to invest.

Some even wait until they’ve paid off their mortgage before investing in another property!

The thing is there is no perfect time to invest.

The very best time to invest is when you can afford to do so, regardless of market conditions.

Trying to time the market can be a fruitless exercise that may mean you sit on the sideliners for years instead of making the most of capital growth from your investment grade property.

Something that many new investors also don’t understand is that investing success takes time.

And it takes patience to let the wonders of compounding work its magic.

You will achieve nothing by waiting to invest but you’ll achieve plenty if you push “go” instead of “stop” whenever you can afford to purchase another property.

The bottom line

Unless you learn how to manage your money, it will manage you and you’ll likely go nowhere fast.

The conclusion is taking control of your finances and your financial literacy.

I bet you’ll be surprised of what you can achieve!



Michael Yardney

Michael Yardney is a #1 bestselling author & a leading expert in the psychology of success and wealth creation Sharing stories on Success, Property & Money