My parents were really good financial role models. They were fiscally conservative, never took on unnecessary or risky debt. They made very conscious, deliberate choices on how to use their money. They never gave me formal money lessons, beyond my Mom teaching me how to balance a checkbook and my Dad showing me how to complete an EZ40, which to be fair, is more than some kids ever receive. I still learned a lot about good money management from observation. One of the biggest lessons they taught me was to live within your means. And it was a lesson I took to heart.
It is also what I consider to be a bit of a money mistake on my part, not because my parents were wrong. They weren’t. It a very wise and smart decision to always live within your means. It can help you become and stay financially strong. What I got wrong was I erroneously assumed that living within my means implied everything was well and good.
And that wasn’t the case. At all.
The Missing Link: Money Needs Purpose
Sure, I didn’t have debt, which is absolutely great and wonderful, but I also wasn’t using my money well. I spent my money on whatever I wanted as long as I could afford it. Again, this sounds ideal and what everyone should aim to do. But for it to really work for you, you can’t just spend your money willy nilly either. You need to be mindful about it. This doesn’t mean you can’t buy fun things or treat yourself. Of course, you can do those things. However, it does mean you need to know how you want to use your money because not all of your goals and desires are created equal. As my friend Shannon taught me, money needs a purpose. And even though I lived within my means, my money had no purpose.
I was the quintessential mindless spender, albeit debt-free, so I did have that going for me. But my mindless spending also meant I was missing out on real opportunities and not maximizing my money. This created disharmony, which I would often try satisfy by shopping.
Money Mistake #1: Spending Money Mindlessly
Mindless spenders are unhappy. Period. Even though I had no debt, I wasn’t really happy. Here’s why.
Items Bought Mindlessly Bring Only Short-Term Joy.
If I’m being truly honest, I often bought random things because the need to buy something, for that temporary high, outweighed whether I actually wanted or even needed the item. Thus, I ended up with a lot of junk. And money wasted on dumb things.
No Money for What I Truly Wanted.
My process for deciding to buy something was simple: If I had the money, I bought it. The problem is that is very short-sighted. Because I did not think about what I truly wanted, there were so many times I didn’t have money to do things or buy things that actually meant something to me. This led to bitter and resentful feelings and to me falsely claiming that I had no money to do those things, which wasn’t true. I did. I just spent all my money on dumb, meaningless things.
My Lesson: It took me a long time to figure out what I was doing wrong because I was convinced living within my means was all I needed to do. It wasn’t until I started giving my money purpose and prioritizing how I used my money did it start to give me satisfaction. Initially, I was even resistant to doing this because it felt all big brother to me, but once my money was given purpose through setting goals, everything changed. I was more confident because my life had direction, nor did I feel guilty when I treated myself because it was no longer impulsive but a genuine, planned pleasure.
Money Mistake #2: A Follow the Herd Mentality
No one likes to admit they follow the herd. We prefer to think of ourselves as unique individuals, above such silliness. I hate to burst your special, rare bubble, but we are herd animals. We crave and respect individuality, but we also want to belong and be a part of the crowd too. How else does Justin Bieber rule the airwaves? 🙂
And it’s not wrong or bad to like the same things as others do. Or to seek recommendations. Or to even find your tribe of Beliebers to join — provided you are not following along for the sake of it. Otherwise you will lose your authentic self. I lost sight of this. This shames me, but I am committed to being authentic, which means confessing my mistakes, because everyone makes them. Let’s not pretend otherwise.
Herd Mentality Beliefs I Followed:
A small list of some of the more … dumb … money mistakes I made.
- I said “yes” when I should have said “no” to things that did not interest me or could not really afford. Real friends are okay with you saying “no”. They might be disappointed that you don’t want to go to that concert or do whatever with them, but they also get over it. And sometimes it empowers them to say “no” too.
- I thought things equaled happiness because everyone — from friends, marketers, advertisers, brand ambassadors, family and so on — told me so. I’ve got no beef with anyone promoting products and earning money. However, it’s up to you to decide what truly makes you happy. Maybe it is an expensive handbag or maybe not. And either answer is okay, if that is how you legitimately feel.
- I wanted to make others envious. This is hard to admit because it obviously doesn’t paint me in the best light. But it’s true. There were absolutely times I bought things because it would create envy and make me feel important. I also know that I am not the only person who has ever fallen into this trap because I am simply not that cool. Most people just don’t want to admit it. I am still doing much soul-searching and work on this one because there are still times (many times) where I find myself thinking, “this will impress so-and-so” and that’s not how I want to live or use my money.
I could on, but it just depresses me. Oh wait. That’s already happened. (Come on! Making fun of my depression is how I get the upper hand, people!) 😀 My guess is some of these money mistakes sound familiar to you. Don’t beat yourself up over making them. Learn and let go.
My Lesson: I absolutely want to find my tribe with people who have like-minded values, but I also know that I need to be me too. That I don’t always have to follow the herd and need to do a hard gut check before I spend money to make sure it is in alignment with my goals and values and I’m simply not following the herd. Or worse — trying to impress the herd. I have very strong people pleasing tendencies so I must always remain vigilant.
Money Mistakes Are Fixable
Our money mistakes can haunt us and do some damage. But never forget, they are also fixable. Seek help — from finance bloggers to financial advisors to debt relief counselors — to address your money mistakes and get you back on track. I’m certainly not proud of my past money mistakes, but they also taught me a lot about myself and have helped me not only become a smarter consumer, but also a better person.
What money mistakes are you willing to confess?