4 Money Mistakes to Avoid

We’re all trying to do the best we can with what we have, but it can be tough when there is so much competition for our dollars. Sometimes we don’t know what we don’t know, and there is some truth to the fact that what we don’t know can hurt us. Even seemingly small mistakes can have a significant impact over time. Here are some common pitfalls I often see people make, along with tips on how to avoid them.

1. Making Only Minimum Payments on Credit Cards

Credit cards can offer convenience and rewards, but they can also be a double-edged sword if not managed carefully. One of the biggest mistakes people make is only paying the minimum amount due each month. While this can make the debt feel more manageable and convenient, the reality is much more painful in the long run.  

Credit card interest rates are often some of the highest you will see in the financial space, sometimes reaching 28% or more. At this rate, it would not be a surprise if you end up paying more in interest than the original purchase price of the items you charged. The reality is that basically no investments will offer a guaranteed return that high, making it nearly impossible to outpace your credit card debt through investing.

What to do instead: Prioritize paying down your credit card balances as quickly as possible. Consider setting up a plan to pay more than the minimum each month, targeting the card with the highest interest rate first. Once you’ve cleared your high-interest debt, you’ll be in a much better position to start investing. Now money can be working FOR you instead of AGAINST you.

2. Paying for a Storage Unit

Storage units can seem like a practical solution when you’re short on space, but they can become a long-term drain on your finances. The average storage unit costs between $60 to $180 per month, depending on size and location. Over the course of a year, that can add up to a significant expense, especially if you’re storing items you rarely, if ever, use.

There are typically one of two things happening when it comes to storage units:

You don’t really need the items in storage. If something has been sitting in a unit for months or years, it’s worth asking whether you really need to keep it.

You use the stored items so infrequently that it’s not worth paying for storage. For items that you need only occasionally, like seasonal equipment, it might be more cost-effective to rent or borrow them when needed rather than paying for storage year-round.

What to do instead: Take an inventory of what’s in your storage unit and decide what you truly need to keep. Consider selling or donating items you no longer use, and think about whether renting the occasional item might be more affordable than long-term storage. This helps free up your mental load, reduces the stuff you don’t need, and frees up cash flow for other goals. Woo!

3. Ignoring Employer Match at Work

Many employers offer a matching contribution to their retirement plans, such as a 401(k) or 403(b). This match is one of the best benefits you can receive because it’s essentially free money. For example, if your employer matches your contributions dollar-for-dollar up to 5% of your salary, that’s an immediate 100% return on your investment—and that’s probably the best return on your money you can find.

Unfortunately, some people don’t take full advantage of this benefit, either because they don’t contribute enough to trigger the full match or because they’re unaware of the match altogether.

What to do instead: Ensure you’re contributing enough to your retirement plan to receive the full employer match. If you’re unsure about the details, talk to your HR department or financial advisor to understand how your company’s plan works. The only time you might consider not maximizing your contribution is if your company has a long vesting schedule, and you don’t plan on staying with the company long enough to become fully vested. Otherwise, don’t leave this money on the table.

4. Not Reviewing Your Expenses Regularly

This one is easy not to do. Even as you read this you're probably thinking it doesn't apply to you. I'm not kidding, you should just read through the transactions from the last month. EVERY time I do this with clients it is informative.

One of the most common responses I hear from clients is, “I didn’t realize I was spending so much on that.” Whether it’s a forgotten subscription or an unnoticed spike in utility bills, reviewing your expenses can reveal hidden costs that, once addressed, can free up money for other financial goals.

What to do instead: Make it a habit to review your bank and credit card statements at least once a month. Look for any charges you don’t recognize, services you no longer use, or areas where you could cut back.