Top 10 Financial Mistakes

Top 10 Financial Mistakes

Originally aired 5/26/2021



Ladies and gentlemen, your TOP TEN! Financial mistakes, that is. We may not go all Simon Cowell on you, but on this episode of the Get Ready For The Future Show, we’re talking all about the most common financial mistakes and what you can do to avoid them!

You’ll learn:
– Big news from the GenWealth Dream Team!
– 10 financial mistakes to avoid at all costs
– One important step to keep in mind as you build financial independence

Downloadable Content:

What’s the Plan? A Manifesto for Your Life, Your Worth, and What Happens Next



Now Let Me See That Moneywork

  • On today’s episode of the Get Ready For The Future Show, we’re talking about the top 10 most common financial mistakes and what you can do to avoid making them!
  • But first… We’ve got big news!
    • All too often, people who are just getting started on their financial journey are either denied access to financial planning because they don’t have a certain amount of assets or they’re handed off to a robo-advisor that will give them the same advice it’s given the last 5 people it served.
  • Moneyworks
    • Program for those just getting started on their financial journey.
    • The ease of technology with the power of relationship.
    • Features like:
      • Personal Financial Coach
      • Financial Wellness Assessment
      • Account Aggregation
      • Budgeting Tools
  • Talking Cents podcast
    • What you don’t know about money.
    • We’ll help you build a solid foundation of financial knowledge and give you practical steps to take toward financial independence.
    • Coming this June!
  • #1 – Excessive/Frivolous spending
    • Great fortunes are often lost one dollar at a time.
    • It may not seem like a big deal when you pick up that double-mocha cappuccino, take a “quick stroll through Target”, and pick up dinner on your way home, but every little item adds up.
      • Just $25 per week spent on dining out costs you $1,300 per year.
      • That money could go toward an extra mortgage payment or a number of extra car payments.
    • Now, we’re not suggesting that you never spend a little money on yourself, but you have to know where your money goes and be mindful of your spending so you don’t go overboard.
    • Keeping up with the Gram
      • Seeing your friends social media posts makes you more likely to spend money.
    • How Moneyworks can help:
      • Account integration
      • Financial wellness score
  • #2 – Not Having Life Insurance
    • Not having life insurance could put your family’s financial independence at risk.
      • What happens if you don’t come home? Can your family sustain without your income?
    • These types of conversations are never fun to have, but not having them can be extremely detrimental.
    • How Moneyworks can help:
      • Articles in the resource library specifically about life insurance and your options
      • Calculators for your life insurance needs
      • A dedicated financial advisor to help you determine what’s right for you

But Your Money Gotta Work, Work, Work

  • #3 – Living on Borrowed Money
    • Using credit cards to buy essentials has become somewhat normal.
    • But even if an ever-increasing number of consumers are willing to pay double-digit interest rates on gasoline, groceries and a host of other items that are gone long before the bill is paid in full, don’t be one of them.
      • Credit card interest rates make the price of the charged items a great deal more expensive.
        • Rule of 72
          • For example, the average interest rate for credit cards is 17.3%.
          • If you divide 72 by that rate, you get 4.16 years.
          • That’s all it takes for a credit card company to earn double your money.
        • Depending on credit also makes it more likely that you’ll spend more than you earn.
    • How Moneyworks can help:
      • Library of resources, including a debt snowball tool to help you regain control of your money.
      • Account aggregation – knowing where your money is going
  • #4 – Buying a New Car
    • Millions of new cars are sold each year, although few buyers can afford to pay for them in cash.
      • But being able to afford the payment is not the same as being able to afford the car.
      • Furthermore, by borrowing money to buy a car, the consumer pays interest on a depreciating asset, which amplifies the difference between the value of the car and the price paid for it.
      • Worse yet, many people trade in their cars every two or three years and lose money on every trade.
    • Sometimes a person has no choice but to take out a loan to buy a car, but how much does any consumer really need a large SUV?
      • Such vehicles are expensive to buy, insure, and fuel. Unless you tow a boat or trailer or need an SUV to earn a living, is an eight-cylinder engine worth the extra cost of taking out a large loan?
    • If you need to buy a car and/or borrow money to do so, consider buying one that uses less gas and costs less to insure and maintain.
      • Cars are expensive, and if you’re buying more car than you need, you’re burning through money that could have been saved or used to pay off debt.
  • #5 – Spending Too Much on Your House
    • When it comes to buying a house, bigger is not necessarily better. Unless you have a large family, choosing a larger home will only mean more expensive taxes, maintenance, and utilities. Do you really want to put such a significant, long-term dent in your monthly budget?
    • People often forget to include escrow – you’ve got taxes and insurance on top of your mortgage payment.
    • How Moneyworks can help:
      • An entire section of the resource library is dedicated to housing, with tools like:
        • Should I rent or buy a home?
        • What’s my total mortgage payment?
        • And more!
  • 10 ways to shift your perspective about planning:
    • What’s the Plan: a Manifesto for Your Life, Your Worth, and What Happens Next
    • Click here to get your free copy

Is It Worth It? Moneywork It.

  • #6 – Using Home Equity like a Piggy Bank
    • Your home is your castle. Refinancing and taking cash out on it means giving away ownership to someone else. It also costs you thousands of dollars in interest and fees.
    • Smart homeowners want to build equity, not make payments in perpetuity. In addition, you’ll end up paying way more for your home than it’s worth, which virtually ensures that you won’t come out on top when you decide to sell.
  • #7 – Living Paycheck to Paycheck
    • Many households are living paycheck to paycheck, and an unforeseen problem can easily become a disaster if you are not prepared.
    • Nearly half of Americans can’t afford a $400 emergency expense. (SOURCE: CNBC)
      • The cumulative result of overspending puts people into a precarious position – one in which they need every dime they earn and one missed paycheck would be disastrous. This is not the position you want to find yourself in when an economic recession hits. If this happens, you’ll have very few options.
    • Keep three to six months’ worth of expenses in an account where you can access it quickly.
      • Loss of employment or changes in the economy could drain your savings and place you in a cycle of debt paying for debt.
      • A 3-6 month buffer could be the difference between keeping or losing your house.
        • If you think you can’t get $1000 in savings, consider putting your tax refund into savings instead of spending it.
    • How Moneyworks can help:
      • Help you manage expenses, find margin, and prioritize saving.
  • #8 – Not Investing
    • If you do not get your money working for you in the markets or through other income-producing investments, it’s possible that you won’t ever be able to stop working.
      • We had new clients who, when they first came in, had a 0% chance of a successful retirement with their money in savings; 83% after changing their asset allocation.
    • Making monthly contributions to designated retirement accounts is essential for a comfortable retirement.
      • Take advantage of tax-deferred retirement accounts and/or your employer-sponsored plan.
        • Don’t walk away from free money.
      • Understand the time your investments will have to grow and how much risk you can tolerate.
    • How Moneyworks can help:
      • A trusted financial advisor can help you match this with your goals.

Better Have My Money(works)

  • #9 – Paying Off Debt with Savings
    • You may be thinking that if your debt is costing 19% and your retirement account is making 7%, swapping the retirement for the debt means you will be pocketing the difference. But it’s not that simple.
      • In addition to losing the power of compounding, it’s very hard to pay back those retirement funds, and you could be hit with hefty fees.
      • When the debt gets paid off, the urgency to pay it back usually goes away. It will be very tempting to continue spending at the same pace, which means you could go back into debt again.
      • If you are going to pay off debt with savings, you have to live like you still have a debt to pay – to your retirement fund.
    • Don’t pay off debt with 401k money
  • #10 – Not Having a Plan
    • Your financial future depends on what is going on right now.
      • People spend countless hours watching TV or scrolling through their social media feeds, but setting aside two hours a week for their finances is out of the question.
    • You need to know where you are going. Make spending some time planning your finances a priority.
    • What’s the Plan?
      • One of the biggest disservices our industry has done is to take financial planning—a powerful tool for cultivating individual wealth and security—and make it inaccessible to the people who need it most.
        • We view financial service as a public service. If you want the help, we want to talk to you.


    • Bonus Tip: Not giving yourself grace is another BIG financial mistake!
      • It’s important to understand that you need to have grace for yourself.
      • Similar to a diet, if you restrict yourself too much or never allow yourself some mistakes along the way, the odds of lasting change are slim.
      • Be sure you work some fun money into your budget that you’re free to spend on that cup of coffee or the trip to Target!
    • Where you come from isn’t where you’re going.
      • You can’t change the past, but you can be intentional about changing your future.
    • 10 ways to shift your perspective about planning:
      • What’s the Plan: a Manifesto for Your Life, Your Worth, and What Happens Next
      • Click here to get your free copy