Financial Regret: the Biggest Money Mistakes

We’ve all had to learn to manage money the hard way, whether from overspending, underbudgeting, or taking advantage of credit when we shouldn’t have. Financial regret and buyer’s remorse are something every human on the planet has had to deal with.

Debtco Group has compiled a list of 6 money mistakes you should avoid. We’ll discuss overspending, budgeting, credit, and actionable steps you can take to get out of a financial slump.

Financial Regret: 6 Money Mistakes You Should Skip

To mitigate financial regret, avoid:

• Spending money you don’t have.
• Budgeting too little.
• Purchasing consumer goods on credit.
• Emotional spending.
• Living off of credit.
• Overspending on substances.

We’ll discuss all of these things in-depth in the text to follow.

Spending Money You Don’t Have

Sometimes, we spend money in anticipation of funds we are certain we’ll get. For instance, a friend might promise they’ll give you money for a video game you sold them. You might spend some money on eating out or getting drinks, certain that the money will be replaced.

Your friend doesn’t pay you back. They insist the video game is broken.

You’re stuck– you didn’t budget for your friend bailing on you, and now you don’t know if you’ll be able to afford petrol at the end of the month.

Moral of the story? Never spend money because you’re certain you’ll make it back. It’s self-destructive and can ruin your financial standing, especially when you’re short on disposable income or don’t have savings.

Budgeting Too Little (or Not At All)

When we first start budgeting, a lot of it is trial and error, right? We don’t know what unexpected expenses will pop up, how much petrol we’ll need, or if food prices will go up–some of us don’t budget at all and spend based on our gut feelings (a fatal mistake).

You should always over budget for essential expenses like petrol, food, electricity, mobile data, etc. If you don’t, you might find yourself stuck at the end of the month, eating nothing but Maggi noodles with sugar water for dessert.

If you don’t budget, take this as your sign to start. Tracking your expenses and how much you spend on what is instrumental in ascertaining how you might save or make smarter spending decisions.

Using Credit for Consumer Goods

By consumer goods, we mean clothes, electronics, holidays, and other unsecured debt. Store cards and credit cards can be enticing, especially in the age of goods’ power to portray your social standing.

What happens when you find yourself R10 000 in store card and FlexiPay debt because you needed to be trendy? What about when your iPhone 22 breaks and you’re stuck with the R9 000 monthly repayments?

Rather than getting into store card debt, save up for the electronic goods you want and buy them second-hand. If you’d like to buy clothing you want, wait for the end-of-season sale (clothing stores always put their summer stuff on sale when winter starts and vice versa).

Lastly, never, ever, take out a loan to go on holiday. You should never travel on credit. When you return to real life, you’ll have to make large personal loan repayments for an intangible expense.

Emotional Spending

A lot of us feel that money on eating out with loved ones, a once-in-a-lifetime experience, gifts, or going out is money well-spent– “these memories are priceless”.

Sometimes, we want to treat ourselves to a coffee or night out because we’ve worked hard or have had a rough time lately; however, we’ll always have to work hard, and there will always be something undesirable happening in our lives. In psychology, this is called mental accounting: it’s the premise of “since I did X, I deserve Y.”

If you’re short on cash, try to cut back on the special treats and find other means to make special memories. Instead of going out to eat, make something together at home. Even if your meal isn’t as good as a restaurant’s, you’ll always have that, “Hey, remember the one time we tried to make X and failed? It was so fun,” memory.

Overspending on Substances

Those of us who like using substances to feel better are especially susceptible to overspending on things like alcohol and nicotine. Drinking or smoking away money can be a huge drain on our finances, especially if you’re stuck in the mindset of “alcohol/nicotine/substances have been there for me when no one else has.” The truth is, you have been there for you when no one else has.

Show up for yourself by cutting back on your substance spend. You’ll be much financially better off when you find better coping mechanisms: spending time with loved ones, talking about how you feel, or exercising.

If you overspend on substances, remember that there is a way out. There are people who understand how you’re feeling, have successfully stayed sober, and can help you do the same. Reach out to the South African substance 24-hour abuse helpline toll-free at 0800 12 13 14 or send a WhatsApp message to 076 535 1701.

Living on Credit

When we don’t have a lot of money, it’s really easy to fall into the trap of living off of our credit cards. They can seem like an endless source of money that we only have to pay off in the distant future.

Eventually, the day will come when you won’t be able to make minimum payments anymore because you’re so deep in debt– one of the key signs you need debt review.

That’s where Debtco Group can help.

We’re a debt counselling company that can reduce interest rates, cut down your debt repayments, protect you from legal action, and ensure you retain your assets. This is through a legal process called debt review, wherein a debt counsellor negotiates for reduced interest rates and repayments on your debt. As soon as you apply, you’re automatically protected from legal action.

Let Debtco Group help you break free from the vicious debt cycle. Contact us today.