3 mistakes that cost me thousands in the first quarter, and how to fix them

  • In the past year, I’ve developed strict budgeting and saving habits that have helped me grow my net worth.
  • But in the first quarter of this year, I quit those habits, thinking I’ll continue them normally in 2022.
  • Ignoring my credit card bills and budget, and keeping a lot of cash, has cost me thousands.

one of My biggest goals for 2022 had to continue my growth

net value

and make smarter financial decisions. However, when I looked back at the first three months of the year, I realized I didn’t do much to achieve these things.

While I spent most of 2021 sticking to a strict budget and changing my spending habits, I started 2022 more carelessly. My mistakes cost me thousands of dollars. Since I discovered most of these issues at the beginning of the second quarter, I’ve been working hard to make practical changes so that I can spend the rest of the year getting back on track to meet my financial goals.

Here are the mistakes I made in the first quarter and what I’m doing now to fix them.

1. Not checking my credit card bills

For the first few months of the year, I ignored calendar invitations I made earlier to remind me to do month-end checks on my credit card bills. Those meetings were meant to be bookmarks that I could use to identify areas I was overspending on and purchases that weren’t necessary.

But since my schedule was so busy and I felt too lazy to do it on the weekend, I simply omitted the time allotted to look at my credit card statements. This is one of the factors that led me to increase my credit card bills 15% more than they were in 2021.

To prevent this from happening for the remainder of the year, I put these credit card review sessions back into my calendar and implemented a rewards system. If I make these spending analysis reviews, I eat lunch at my favorite local coffee shop. If I do not do these reviews, I will not be allowed to apply in this coffee shop for 60 days. So far, this system has made me accountable.

2. Giving up my budget

At the beginning of 2021, I designed a strict budget, based on realistic spending categories and savings goals, which I’ve been tracking every month for the entire year. I stayed true to that budget by tracking my daily spending and looking at my finances on a weekly basis.

This year, I felt like I didn’t need a budget and assumed those good habits I picked last year would stay with me. I was wrong. I spent the first three months of the year not keeping track of my spending on a daily or weekly basis and found myself annoyed at the end of the month to see how much money I wasted.

I noticed that between January and the end of March, I spent $2,500 more than that period last year. Without a budget, I found myself more disorganized spending on shopping, eating out at restaurants, treating myself to extra activities during vacations, and even buying small things I didn’t really need on a daily basis.

To help me get back into budgeting and spending less money, I set up two days without a credit card during the week (where I only spend cash or no money at all) and track my spending on a daily basis. Every night, before I sleep, I review all my purchases from the day and update my budget so I know how much I have left to spend for the rest of the month.

Although it takes a lot of work, I notice that this helps me connect with the good habits I’ve learned from the past year that save me money every week, from preparing meals to avoid having to eat out, to making a set amount of money I spend every day to be in control of my money.

3. Keeping large amounts of cash in my savings account

One of the biggest financial mistakes I’ve made several years ago involves keeping large amounts of cash in my savings account.

While some financial experts say you should just 10 to 20% From your cash portfolio, my liquidity spread is closer to 45%. Although this money in High yield savings accountPerhaps some of that money would have been better grown elsewhere.

For example, if part of it goes to a CD with a file 1 to 2% APYOver time, you will earn much more than you would now with a savings account. Or if you get into my SEP IRA retirement account, you may be earning more in the market over time than you are now.

Although a large part of the reason I keep so much of my money in a savings account is a sense of security, I realize it costs me thousands of dollars every year because it’s right there. That’s why, over the past few months, I’ve started to strategize a plan for what to do with the extra cash and turn a portion of it into a brokerage account, CDs, and retirement account.