Written by: Christine Luken, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
There are four behaviors that cost you money, and you might not even realize it! They’re a little sneaky, like having a slow leak in one of the tires on your car. You might not notice a difference after a day or two, but eventually, if you don’t find and fix the leak, you’re on the side of the freeway with a flat tire. Read on to discover four potential leaks in your personal finances.
1. Being financially disorganized
If you’re disorganized, you can literally lose track of your money. And I’m not just talking about your physical cash! When I work with my financial coaching clients, the very first thing I do is help them find and organize all of their money and accounts. In the course of our work together, one woman realized her Venmo account had over $1,200 in it. (She thought the balance was next to nothing!)
It’s also common for people to have “orphaned” retirement accounts from former employers that aren’t being actively managed. If that money’s just floating out there in a money market account, that’s also growth and income you’re potentially losing out on.
Being financially disorganized can cost you money with late fees and finance charges. If your bills are in messy piles, it’s much easier to miss important deadlines. I find that people who aren’t organized are more likely to incur late fees and finance charges because they’re paying bills late.
2. Ignoring the financial details
Look, very few people enjoy spending time poring over financial details on a regular basis (other than math nerds, like me). But if you almost never scrutinize what’s going on with your money, it will likely cost you. When I first get my clients set up on a personal finance app to track their spending, many have some unpleasant surprises.
Almost every client I coach who digs into the details discovers recurring charges to their accounts for things they’re not even using. It’s time to find and cancel all of your unused subscriptions: streaming services, music subscriptions, apps for your phone, recurring product shipments for skincare, supplements, and fishing-lures-of-the-month club! $5, $10, or $50 a month might seem like pocket change. But if you add them all up over time, it can be a significant amount of wasted money. Paying attention pays!
3. Trying to ignore your emotions
Money is emotional! Science has proven that the moment of decision happens in the same part of the brain that processes emotion. This means it’s physically impossible to make a purely logical money decision. It’s time to increase your emotional intelligence and discover how to work WITH your emotions rather than fight against them.
The best financial decisions are made when we consult both our logic and our emotions. Our logic, “the voice of reason,” is like classical music playing slowly and steadily in the background of our minds. Our emotions, on the other hand, are like a top 40 channel on Spotify. Sometimes there’s a soft sweet love song playing. Other times it’s loud and boisterous rap music. Our emotional volume goes up and down depending on what’s happening in our lives on any given day.
In order for us to hear the voice of reason, our emotional volume must be low. As my mentor, Melanie Ann Layer, says, “When emotions are high, intelligence is low.” Before interacting with your money, check in with yourself. Are your emotions loud? Give them time to quiet down before making major money moves! Your future self will thank you.
4. Going it alone
You might think you’re saving money by doing your own investing, tax planning, and business accounting. But, unless one of these is your profession, going it alone is likely costing you money. This is especially true as your wealth grows and your financial situation becomes more complex. The intricacies of the tax code and fluctuations of the markets make it difficult for the average person to stay up-to-date with current information
A good financial professional will save you more money than they cost you. My CPA is always finding me legitimate ways to lower my tax bill. My financial planner is continuously scouring the market for undervalued companies to invest in. My time is much better spent working on my own business than trying to manage my own investments and tax strategies.
In my own practice, I pride myself on ensuring my clients receive a positive return on their investment in financial coaching. As long as they are open to suggestions, and follow through on the action items I give them, it’s pretty much inevitable!
So, there you have it! Were any of these four behaviors that cost you money a surprise to you? If so, which one? Is there another one you’d add to the list? Drop me a note and let me know!
Christine Luken, Executive Contributor Brainz Magazine
Ready for money to support your happiness, rather than stress you out? Then you need Christine Luken, Financial Dignity® Coach in your corner! As the Founder of the Financial Dignity® Movement, Christine has coached hundreds of high-earning professionals, business owners, and divorcing women to pay off staggering amounts of debt and massively increase their net worth. The author of several books, including Money is Emotional and Financial Dignity® After Divorce, Christine blends wise money management with emotional intelligence.
