(10 Must-Know) Don’ts of Money

Don't lie, don't steal, don't cheat.

Don't touch the oven, don't fill the coffee maker with unfiltered water and finally, DON'T take out the recycling on trash days!

All kidding aside, we have heard quite a few “Don't do this” type of stuff most of our lives, but for some reason, we never hear the “Financial Don'ts!”

In fact, it seems like every time we open our phones social media feeds, it's all the “Do this” when it comes to your finances.

So I decided to make a list of ten financial don'ts you should probably consider!

Don't avoid budgeting.

What is the top way to start losing weight or hitting your health goals?

Typically, the first step is to adjust your eating habits, which includes tracking your caloric intake. But why?

You track your caloric intake to make sure you're staying on top of your plan and hitting your goals. Tracking brings awareness to areas of improvement and keeps you in check.

So how do you do this with your money?

You should budget!

Budgeting, or tracking your cash flow and where it goes, is just like logging your daily food intake on your favorite health app.

Using a monthly budget can help you save more money, pay off your debt, work towards avoiding the paycheck to paycheck life and help you gain control of your finances.

Do this instead:

Instead of not having a budget, start by doing this each month using apps like Mint or Personal Capital:

  1. Track your net income each month
  2. Track your fixed expenses each month
  3. Track your variable expenses each month
  4. Track your savings/investments
  5. Track your debt payments

Don't leave money on the table.

You may have heard don't put your elbows on the table, but have you heard to make sure you don't ever leave money on the table?

Typically, this concept refers to making sure you don't say no to the company matches or reimbursements your company offers. For example, your 401K or HSA accounts.

If you work for a company that sponsors a retirement vehicle such as a 401K, typically they will match a percentage of your contributions. This is “Free” money in that match is of no cost to you.

Case in point, if you're the company offers something like a 50% match of what you contribute up to 3%, this means if you contribute 6% of your pre-tax salary each year they will tack on an additional 3%.

If you make $100,000 per year gross, that would be a $6,000 contribution from you and an additional $3,000 from your place of work. So instead of leaving money on the table;

Do this instead:

Talk to your benefits division at work. Learn about your retirement plan and what your health insurance companies offer too.

  • Get your 401K or retirement match
  • See about an HSA account and if there is employer matching or if your employee contributes to starting one. (I found $2,000 in my HSA account!)
  • Contact your insurance about gym membership reimbursements. For example, each year I can have up to (3) months of my gym membership reimbursed for going 12x per month!
  • Does your company offer health rewards? For example, some employers/insurance groups will give employees gift cards and bonuses for completing health programs!
don't leave money on the table
(My work rewards for working out)

Don't avoid your debt problems.

Similar to making sure you don't avoid budgeting, avoiding your debt woes doesn't make them any better… or go away for that matter!

The best time to take care of your debt is yesterday! Every day bad debt racks up interest and like a wise old man once said:

If you take debt out, you will eventually pay it back, so why not just get it over with.”

Here is why we naturally tend to avoid our debt, the awareness means we must take action, and sometimes action means changing – which humans are reluctant to do.

However, go back to the quote – you will pay it all back at some point – so stop delaying. Instead of following the financial don't of avoiding your debt, instead, start with the list below.

Do this instead:

  • Create a plan of action to pay off your debt.
  • Write down all of your debts (Even if this can cause a little financial stress)
  • Pick a debt pay off strategies such as the debt snowball, debt avalanche, a HELOC, balance transfer or others
  • For a full list of ways to pay off debt fast, use these debt pay off tips!

Don't forget to check your credit.

It's not a bad idea to check your credit score annually… so don't forget!

While it might seem like it's not a big deal or perhaps you're avoiding your credit score all together – it is important to know for many reasons.

Reason 1: Knowing your credit scores (Like your debt) will help you make better financial decisions.

Reason 2: If you know your credit score, you know whether or not you need to take the right steps to improve it!

Reason 3: Checking your credit score is super valuable to make sure there are no fraudulent accounts opened, phantom debts or identify theft!

Do this instead:

Each year, or even twice a year, contact your bank about getting a copy of your credit score. If your bank doesn't offer a free credit score check, then use this list to find a free option for getting your credit score.

Don't buy brand new cars.

Whatever you do, don't buy brand new cars!

Don't fall for the warranty, lease, or whatever promotion you may have heard about. Regardless of what your parents say and everyone at work, buying a brand new car is hands down one of the worst financial mistakes many make (And continue to make).

For starters, your car payment shouldn't exceed 10% of your gross income. Here are some quick reasons to never buy new cars:

  1. Cars depreciate (Lose value) at 20% per year on average
  2. The minute you drive your car off the lot it loses 10% (or more of it's value)
  3. A car payment can impact your debt to income ratio, making buying a home challenging
  4. Your car will only make you happy for about 60 days, then after that the monthly payment will actually cause more stress than good!

Do this instead:

Instead, when purchasing a car, follow this cay buying rule of thumb:

Car Value – A car's value should not exceed 25% of your annual gross income. For example, if you make $60,000 per year, a car priced around $15,000 is affordable for you.

Don't compare yourself financially.

Your best friend got a new car, your sister got a new house, and your cousin just went to Cancun for ten days.

Now you're sitting at work comparing yourself and your life, but here is a tip:

Don't ever compare yourself, financially (Or in life in general). Financial comparison is a huge issue with the growth of social media. Naturally, when we see others best on social media, we tend to compare our worst.

Comparing what you have to what someone else has is a huge don't do when it comes to money.

For starters, you will never be able to keep up with everyone, and secondly, you're only playing with YOUR happiness when you play the comparison game!

Do this instead:

Instead of looking at what you don't have, try “Flipping the script” instead:

  1. You don't have a new car, but you do have a car that works.
  2. You don't have a trip planned, but you are saving for one.
  3. You haven't got your first home, but you're paying off debt to get one!
  4. You're not living the high life, but you are living below your means!!!!!

Don't eat out… all the time.

I personally love a good sit down dinner, or lunch… or breakfast.

Hands down one of my favorite things to do is to just go grab dinner with friends and family. That being said, I also know it can quickly add up.

And as a transparent personal finance blogger, I struggle with this the most when it comes to my budget. However, I still preach it, even if I don't always do the best at meeting my goal;

Don't eat out as much if you're saving money or paying off debt.

If you're someone like my wife and currently you have some huge financial goals like paying off debt or saving for a home, eating out can get in the way!

The $5 swipes every other day quickly add up and over the course of a year, you can spend $1,000's eating out (Millennials are doing just that with their overspending). Instead of eating out, use these tips below:

Do this instead:

  1. Get copy cat meals from Pinterest and cook at home
  2. Use credit card points or cashback for eating out
  3. Set a limit each month, such as $50 for eating out
  4. Use apps that offer promotions for smaller restaurants such as Living Social or Hooch.
  5. Have a goal, hit it, and then celebrate! Make eating out a reward!

Don't use credit cards (Without a plan to pay it back).

Maybe the biggest don't on the list, but please don't take out credit card debt unless you can pay it back each month!

The moment you turn 18 and you can get your first credit card is a pivotal time for a young adult. Making, the choice to practice financial discipline or to leave college in a mess of consumer debt is a big one!

I remember the free sub I got with my 28% interest rate Discover Card and I can tell you it was not worth the interest charges.

That being said, if you plan on taking out a credit card and using it, treat it like a debit card. For every dollar you spend, you should have that $1 in your bank account.

No money = no spending.

The moral to the story when it comes to credit cards – don't use credit cards unless you pay them off monthly!

Do this instead:

  1. Only use a credit card for one thing like gas, groceries, or utilities
  2. Don't buy clothes or meals out (Things that are wants not needs) on credit cards unless you have the money in checking… no matter what you tell yourself!
  3. Be sure to keep in mind that spending is 10-15% higher when you use plastic!!!!

Don't take out more student loans.

Personal hot button:

You're already in massive amounts of student loan debt, so your solution is to go back to school and take out more. Explain this logic?

While I am not saying a second degree or a graduate degree is a bad thing, there is some merit however in being smart about it.

For starters, if finding a job is hard with your bachelor's degree, it might not be the degree, but it could be your lack of expierence. And a master's degree doesn't solve that.

Secondly, if student loan debt is a problem for you already, adding to that problem isn't the smartest idea. Instead of taking out more student loans, instead try some of these tips.

Do this instead:

  1. Adjust your mindset from degrees to expierence
  2. Realize it's more about your soft skills in the workplace, not your book smarts
  3. See about work tuition assistance for your graduate degree
  4. Look for a job that offer's tuition assistance before going back to school
  5. Do the math. A $5,000 raise for a $50,000 degree will take well over 10 years to pay off – is that worth it?

Don't pretend to be a know it all.

Ok, this is a personal hot button #2.

If you know it all, one would think you would have it all, correct?

Whether it is ego, status, or arrogance, sometimes know it alls don't really know a darn thing. Or they let their know it all mentality prevent them from learning more… especially when it comes to money.

Call it a fixed mindset, but if a person knows everything and they're not open to new ways to make their money work better for them, chances are they will remain at the same income level and lifestyle until they open their mind.

There might be a handful of people on planet earth who can be a know it all when it comes to finances. Chances are if you're reading this (And like me) we don't know it all…!

So instead of knowing it all, let's be open to learning it all!

Do this instead:

Instead of being a know it all when it comes to money, be sure to do the following:

  1. Always look for new ways to make money
  2. Always be open to figuring out how to save more money
  3. Think outside the box when it comes to money (Don't follow the masses)

Final Words on what not to do with your money:

Whatever you decide TO DO with your money is your choice. That being said the entire purpose of this article is to help provide some perspective.

You work hard to earn your money and the last thing you want to do is to make financial errors that can cost you money, which ultimately means your time!

So I hope this list helps you with your financial journey and be sure to comment below with a few don'ts you would want to add to this list!