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We have all heard the saying … more month than money. What does it mean? Essentially that your money is running out before your next paycheque arrives. It can be worse than living paycheque to paycheque because there can be days or even weeks without any money. Talk about a stressful situation!

I’ve been in the financial industry for many years and have seen many financial mistakes.  They all seem to have this one thing in common, more month than money. 

Here are the top 10 mistakes that I have seen most commonly. I hope that you will find something in here that you can use to help you break that cycle.

1. Not having a monthly budget. Not having a budget is a way to live beyond your means and is among the most common money mistakes. Everything starts with awareness and the budget sets the tone for that to happen.
2. Not having life insurance. If you have someone who is dependent on your ability to earn an income, you need life, medical and disability insurance. It is bad enough losing someone you love but then having to survive on less income is an extra burden hat one should not have to bear.
3. Not paying off your credit card. Save yourself interest payments, pay off your debt as quickly as you can and start repurposing that money towards saving and investing. Number 10, below, is a crucial first step to doing this.
4. Excessive and frivolous spending. Excessive and frivolous spending is among the biggest and most common mistakes in managing money. The line between needs and wants seems to be getting thinner and thinner and it is becoming increasing difficult to determine one form the other.
5. Not saving any of your monthly income. Establish the habit of creating and working with a monthly budget and making it a point to save a minimum of 10% of your monthly income. We treat credit like our savings these days. And that is a recipe for disaster.
6. Living large in your 20s and 30s. Compound interest is the most powerful financial tool there is.  The gift of time can turn $1,000 into $36,371 at 4.3% over several years. These are the years when you want to be putting money away to leverage your future savings.
7. Swiping credit cards for big and small ticket expenses. It is such a habit to carry our cards and use them. Here’s a strategy that I have seen help you break this habit - Keep your credit on ice!  Put your credit cards in a zip lock bag, fill it with water and freeze it!  The next time you want to use that card will have to wait until it thaws.
8. Buying a new car. Buying a car isn’t bad on its own, not realizing the costs such as maintenance, insurance, etc. and most important, not paying off your existing car loan before buying a new car and buy within your means. In most cases, a brand new car is not the best option. But if you go that route, be sure to factor in ALL of the extra expenses (that goes for used cars as well)
9. No goal-based investment plan. Many people make one of the biggest financial mistakes by investing money in the wrong products hoping it will  multiply faster.  This can be a dangerous strategy. A better strategy, in most cases, is to use the rule of 72.  Divide your current interest rate into 72 to see how long it will take for your money to double.  If you are earning 10% it will take 7.2 years for your money to double.
10. Not having an emergency fund. There are several forms of emergencies, and they can strike at any time.  You must be prepared for it at each point in your life.  A well-planned emergency fund (3-6 months of expenses) and it should have easy access and be in a safe investment. Side note: an expected expense is not an emergency (such as routine maintenance on your car , home or pets)

To recover from bad financial decisions, here are three steps to follow:

• Acknowledge your money mistake, forgive yourself and let go.
• Decide to take action toward changing your financial situation.
• Receive motivation and shift your circle of influence.