The mistakes you need to avoid to stop losing money

Millions of Aussies aren’t maximising their money due to fear and uncertainty – but they’re potentially missing out on tens of thousands of dollars.

While there isn’t one path that will guarantee money success, there are some key mistakes that will almost certainly guarantee money mediocrity.

But if you know what these mistakes are, you’ll know what to look out for and what to avoid.

Fear of taking action

Money can be confusing and complicated, and it’s easy to end up overwhelmed and stuck in information overload and analysis paralysis. Because you don’t want to make a mistake that costs you a bunch of money, you end up stuck doing nothing or just doing the same thing you’ve been doing in the past.

When this happens you’re missing the opportunity to get more out of what you have today. But more importantly, you’re creating an opportunity cost that will compound for years in the future.

If you start nailing it with your money today, 12 months from now you’ll be better off. You would have saved more money, invested a little more, and as a result you’ll have more money in the future.

For example, $5000 invested using the long-term Australian share market return of 8.7 per cent would be worth $160,724 in 40 years’ time. This means that every year you don’t take action, you’re potentially costing yourself more than $100,000 each year.

Investing $5000 a year in the Australian share market now could see it grow to hundreds of thousands of dollars in 40 years’ time. Picture: iStock

Don’t let the fear of making a mistake create an opportunity cost you’ll regret. Take the time to unpack what smart action looks like for you, and create a solid game plan to push through the fear.

No targets

Making the right money moves requires you to put in some work. You’re putting away money you could be spending today to save and invest to set up your future.

Our inner pleasure seeker works against us here because you don’t really want to say no to things today. Being sensible with your money is hard, and when you’re saving and investing without a clear target or ‘why’, it’s even harder.

Take the time to get clear on what success really looks like for you. If you want to build a passive income from investments, how much do you want? And how much do you need to have in your portfolio to reach that point? And when do you want to get there?

This way you’ll have a clear target and timeline to work towards, and then each pay cycle you can focus on ticking off your progress milestones.

Losing momentum

I talk to a lot of people that get pumped up to get on top of their money. They may have seen something on social media, gone along to an event, or read a book that got them motivated to make money success happen.

But because money is one of those things that’s really important but not urgent, it’s easy to let it slip down your to-do list for a tomorrow that never seems to come around.

Make sure you keep momentum going when it comes to making the most of your money. Picture: iStock

Money is a momentum game, and the first steps are always the hardest. But once taken, you start building your money momentum that you can leverage to make your next steps easier. Your money success shouldn’t need a lot of your time or energy, but it does require regular focus to keep your momentum building.

Carve out some regular time in your calendar to keep things moving forward, or get some professional help to keep you accountable to taking the next steps in your money journey. The key here is consistency.

Waiting for the ‘right’ time

Like starting a new health kick or diet, starting a business, or even starting a family, getting on top of your money is something that’s easy to put off.

The ideal time always seems to be just around the corner, but there’s always a reason why it would be easier to wait for next week, next month, or next year to get started.

There is no perfect time.

But once you do take action, a funny thing happens. You start getting some results, which get you motivated to take more action and make more progress. Before you know it, you’ve built some solid habits and behaviours and are wondering why you didn’t get started sooner.

The best time to get started with your money was always 10 years ago. The second best time is now.

Going it alone

Money can be complicated and confusing. It’s easy to get overwhelmed. It’s common to slip back into poor habits and behaviours that can sabotage your progress.

When you’re trying to do this all on your own, it’s easy to let things slip. You lack the confidence to make the right moves at the right time to get the results you want.

Have a buddy to keep you accountable. Picture: iStock

When you have someone in your corner things are a little different. You have someone to bounce your ideas off, keep you accountable, and help point you at the smart next steps you need to take to keep things moving forward.

It could be a partner, accountability buddy or a professional adviser. The key here is someone that knows you and understands money enough to support you in the decisions you’re making to give you the confidence you’re on the right path.

The wrap

Money success can be hard, but it doesn’t have to be. When you take the time to understand and avoid the mistakes outlined here, you remove the key barriers to your success.

You avoid the frustration that can surround money, and start building your money momentum faster and easier. The result is financial confidence, something that’s worth working at.

Ben Nash is a finance expert commentator, podcaster, financial adviser and founder of Pivot Wealth, and author of the Amazon Best Selling Book ‘Get Unstuck: Your guide to creating a life not limited by money’.

Ben has just launched a series of free online money education events to help you get on the front financial foot. You can check out all the details and book your place here.

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances before acting on it, and where appropriate, seek professional advice from a finance professional.