3 mistakes that cost me thousands in the first quarter and how I am correcting them

  • Last year, I developed strict budgeting and saving habits that helped me increase my net worth.
  • But in the first quarter of this year, I stopped those habits, thinking that I would naturally continue them in 2022.
  • Ignoring my credit card bills and budget, and keeping too much cash, has cost me thousands.

One of my biggest goals for 2022 was to keep growing my


net worth

and make smarter financial decisions. However, when I looked back over the first three months of the year, I realized that I didn’t do much to make those things happen.

While I spent most of 2021 sticking to a strict budget and changing my spending habits, I started 2022 a little more carelessly. The mistakes I made ended up costing me thousands of dollars. Since spotting most of these issues at the start of the second quarter, I’ve been working hard to make practical changes so I can spend the rest of the year getting my financial goals back on track.

These are the mistakes I made in the first trimester and what I’m doing now to correct them.

1. Not auditing my credit card bills

For the first few months of the year, I ignored the calendar invites I’d set up ahead of time to remind me to do month-end audits on my credit card bills. Those meetings were supposed to be stop signs that you could use to identify areas where you were overspending and unnecessary purchases.

But because my schedule was too busy and I was feeling too lazy to do this on the weekend, I just eliminated that allotted time to review my credit card statements. This is one of the factors that led me to have 15% higher credit card bills than in 2021.

To prevent this from happening for the rest of the year, I’ve put those credit card review sessions back on my calendar and implemented a rewards system. If I do these audits to analyze my spending, I treat myself to lunch at my favorite local cafe. If I don’t do these audits, I won’t be allowed to set foot in that cafe for 60 days. So far, that system has held me accountable.

2. Get rid of my budget

At the beginning of 2021, I designed a strict budget, based on my realistic spending categories and savings goals, which I followed every month throughout the year. I stayed true to that budget by tracking daily expenses and reviewing my finances weekly.

This year, I felt like I didn’t need a budget and assumed that those good habits I picked up last year would stay with me. I was wrong. I spent the first three months of the year not tracking my daily or weekly expenses and found myself upset 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 during that period last year. Without a budget, I found myself spending more freely on shopping, eating at restaurants, enjoying extra activities while on vacation, and even picking up small items that I didn’t really need on a daily basis.

To help me get back on a budget and spend less money, I reset two credit card-free days 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 go to sleep, I review all my purchases for the day and update my budget to see how much I have left to spend the rest of the month.

While it’s a lot of work, I’ve found that this helps me connect with the good habits I learned last year that allow me to save money each week, from preparing meals to avoiding having to order takeout, to having a set amount of money to spend every day to be in control of my finances.

3. Keeping too much cash in my savings account

One of the biggest financial mistakes I’ve been making for several years is having too much cash in my savings account.

While some financial experts say you should only have 10-20% of your financial portfolio in cash, my cash breakdown is closer to 45%. Even though that money is in a high-yield savings account, some of that cash might have been better off growing elsewhere.

For example, if one party were to invest in a CD with an APY of 1% to 2%, they would be earning much more over time than they are now in a savings account. Or if it was deposited into my SEP IRA retirement account, it could earn more in the market over time than it does now.

Although a large part of why I keep a large portion of my money in a savings account is for a sense of security, I realize that it costs me thousands of dollars each year to simply stay there. That’s why, over the past few months, I’ve started making a plan for what to do with the extra money and transfer some of it to a brokerage account, certificates of deposit, and my retirement account.

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