Finance: Common Money Mistakes We All Make

By nature, condo dwellers are frugal. They understand the economic benefit of living in closer quarters, of sharing the cost of utilities and amenities. As well they know a smaller place is financially easier to maintain then a big detached home, for example.Now as a condo dweller myself I may be biased. But despite how I feel about condo living, there are many common money mistakes we all make that stop us from reaching our financial goals. Here are some of the most common ones I see and how to fix them.Not Paying Yourself First When you get your paycheque, the first thing to do with your money is to pay yourself. What that means is putting money away into your retirement savings, parking some aside for an emergency and looking ahead to any major expenses and saving for that too. What often happens when we get paid is we pay all our bills, then go out and spend on ourselves and then whatever is left over we save. Turn that idea around. Pay yourself, pay all your bills and spend the rest.Lifestyle Inflation and Living Above Your Means One of the biggest money mistakes we make is constantly upgrading our lives, bigger house, better car, nicer clothes. As we make more money, rather than taking advantage and saving more, we just start spending more. This is called lifestyle inflation and one of the most common money mistakes. I often hear people say, I’m making more this year but I don’t feel like I am saving more. That’s because you have taken the extra earnings and spent it. Avoid lifestyle inflation, by always bumping your saving when you get a bump in pay.Constantly ConsolidatingOne of the most financially savvy ways to get out of debt is to consolidate your high interest debt into a lower interest loan. For example, paying your credit card balance using a line of credit. This is smart the first time, but if you find you have consolidated your debt several times, all you’re doing is kicking your financial responsibilities down the road. The debt it still there, it’s just not costing you as much and feels more manageable. Pay the loan you used for consolidating first before you start charging on your credit card again.Owning Too Many Cars and Not Taking Transit A car is a luxury that costs almost $10,000 a year. According to figures provided by the Canadian Automobile Association in 2013, four in five Canadians under-estimate the cost of owning and operating a vehicle. The CAA says yearly ownership costs for an average compact car are about $9,500. If you have access to public transit, getting rid of your car will save you thousands of dollars a year. If you don’t live close to transit but your work is accessible by bus or train, consider moving so you can take transit.Weekly Trips to the Mall Research shows that every single time you step into the mall you spend more than $100. It’s called the Mall Phenomena, and was coined by the American marketing firm JCDecaux Group. They conducted a survey that showed on average we visit the mall three times a month and spend $105 each time. Malls are also the most likely place a shopper will make an impulse purchase. Avoid the extra spending by limiting your trips to the mall, therefore avoiding temptation to spend. When visiting, shop with a plan so you don’t get distracted.These are common money mistakes we are all guilty of. The key is recognizing when we are making them and changing our behaviour. Finding the money to save isn’t hard, once you can identify where you’re spending too much.Rubina Ahmed-Haq is a journalist and personal finance expert. She is HPG’s Finance Editor. She regularly appears on CBC Radio and TV. She is a contributor on CTV Your Morning and Global Toronto. She has a BA from York University, received her post graduate journalism diploma from Humber College and has completed the CSC.Follow her on Twitter @alwayssavemoney