Modern money mistakes (and how to fix them)

We’ve all made mistakes with our money, whether it’s spending hundreds of dollars on a long-forgotten subscription or taking a financial risk that caused more stress than benefit. If you’ve ever looked at your bank statement and wondered where the money went, you’re in good company. Let’s look at some common pitfalls and how we can avoid them in the future.

You can buy it now…but should you?

Do these scenarios look familiar?

• You see a lightbulb flicker, and—click-click—new bulbs are on the way. You even set up a subscription so you’ll never run out again.

• Your kitchen faucet is leaking, so you immediately order supplies to repair it. But by the time you actually get around to DIYing it, the original parts are hidden somewhere in the garage (or was it the basement?), so you have to buy everything again.

• Your social media feed is buzzing about a “life-changing” gadget, so you add it to your cart before the video ends.

It’s easy to confuse constant purchasing with being organized. For many of us, though, this “efficiency” leads to cluttered homes and drained bank accounts.

Try this instead:

• Review your monthly subscriptions before they ship and remove items you don’t need.

• Change the frequency of monthly deliveries to every six or eight weeks to see if you notice a difference.

• Wait to buy DIY supplies until you have the time, energy, and initiative to start the project. Remember, same-day and next-day shipping are just as convenient as buying months in advance.

Where did that raise/bonus/windfall go?

You receive a well-deserved raise, or maybe you find a surprise $5,000 on an unclaimed funds website. You vow to save every dollar, but a new car is suddenly calling your name. This is known as lifestyle creep—scaling up spending as you acquire more money. It’s so prevalent that 40% of Americans making more than $300,000 per year still live paycheck to paycheck (Goldman Sachs).

Try this instead:

• Set up direct deposit so at least half of your raise goes straight into a high-interest savings account every payday.

• Understand the tax implications of any bonus, gambling winnings, or inheritance before spending a dime. Consult with a tax professional to avoid a costly surprise on April 15.

• Set aside some of the money (like 10–25%) to spend as you please, then put the rest toward financial goals like building up your savings or paying down debt.

Winging it and missed opportunities

You’re doing fine because you pay off your credit cards every month…right? While that’s a great habit, winging it can lead to invisible spending that adds up over the years. Being intentional with your finances is much more powerful than “doing fine.”

Try this instead:

• Use a budgeting app, spreadsheet, or even neon markers and paper—whatever will keep you motivated—to see how much money is coming in and going out every month.

• Set savings goals with deadlines. As your bank, we’re going to cheerlead for emergency funds and retirement savings, but you can define the goals you want to reach. (Trip to Hawaii, anyone?) Setting a deadline helps you stay focused and makes it easier to say no to impulse buys.

• Set a monthly “treat yourself” limit for purchasing things you enjoy. Once you reach the limit, though, there’s no more fun money until next month.

Spending money before you have it

The thinking goes like this: Your son's tuition is due, and you've booked a family vacation. It's a lot, but your bonus should cover most of it.

Although it seems logical, this is a huge risk. If your company downsizes or opts out of bonuses this year, you’re left scrambling to cover the bills, and, according to Murphy’s Law, it’s also the perfect time for your car to start sputtering.

Try this instead:

• Instead of counting on future money, build up funds to cover expected and surprise expenses. The peace of mind that comes with a healthy savings account is priceless.

• Hold off on optional or flexible purchases until the funds are physically sitting in your account.

How Flagstar can help

Our experienced bankers can provide smart financial solutions to help you avoid money mistakes. They’re here to help you:

• Open a savings account for your emergency fund or dream vacation.

• Decide whether a certificate of deposit or high-yield savings account will make your money work harder.

• Make saving easy with automatic transfers.

• Use the equity in your home to pay for a major expense.