Episode 96: Common Money Mistakes You Are Making

Your budget can look “right” on paper and still leave you feeling broke. That disconnect is exactly what we tackle as we walk through the most common budgeting mistakes that quietly drain your cash and kill your momentum, even when your income is solid. I share what I’m seeing in real coaching conversations and what I’ve been personally convicted about too, because financial progress isn’t about perfection, it’s about building a plan that works with real life. 

We start with the biggest blind spot: treating a budget like a list of bills. If groceries, gas, kids’ lunches, and everyday necessities aren’t included, it’s no surprise the money vanishes. Then we dig into the “I have free cash so I can do that” mindset, especially in summer when spending ramps up and goals get paused. I talk about why stopping the plan makes it so hard to restart and how staying consistent can shrink a long debt payoff timeline into a focused season of freedom. 

We also cover why paying off debt with no emergency fund is a risky move, how automatic savings transfers can backfire when cash flow is uneven, and why paying extra on every debt at once often keeps you stuck. I explain the snowball method I use with clients to get quick wins, build confidence, and create real progress you can feel. If you’re ready to stop the paycheck-to-paycheck stress and make your plan actually stick, subscribe, share this with a friend, and leave a review so more people can find the show.

Danielle is a money coach helping those who have been trying to figure out their finances FINALLY create a clear plan so they don’t have to worry about waiting to refill their bank account the next payday.

 She is the founder of The Financial Freedom Society on Facebook and her signature money coaching program, The Better Budgeting Playbook. You can sign up for her newsletter by clicking here.

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Transcript

Budget For Groceries And Life Costs

The “I Can Do That” Trap

Build Savings Before Extra Debt Payoff

Why Automatic Savings Can Backfire

Stop Spreading Extra Payments Around

Snowball Method And Getting Quick Wins

Coaching Invite And Closing

SPEAKER_00 0:07

Hello and welcome to the Better Budgeting Podcast. I'm your host, Danielle Reese. I'm a money coach and the founder of the Better Budgeting Playbook, and this is my one-on-one coaching program for women and couples who have been trying to figure out their finances, finally create a clear plan so they don't have to worry about waiting on payday anymore. I became a money coach in 2020 after paying off over$60,000 in debt, rekindling my marriage, becoming financially free, and wanting others to experience the same. If you'd like to work with me, you can check out the link in the show notes there. Also, we have the Financial Freedom Society on Facebook. It's a free Facebook community focusing on debt payoff, saving strategies, budgeting, and money mindset. You can find the link to that community in the show notes as well. Hey, welcome back to the Better Budgeting Podcast. I'm so happy that you're here. Listen, this one came together. It's literally on a scrap piece of paper. Um, and I just had this moment where I'm like, I need to talk about just the most common mistakes that we are making with our money. And that's what this episode's gonna be all about. So I'm gonna go ahead and just dive right on in. And I literally just put this together five minutes ago. So hopefully this episode comes across great and it has a great flow because I'm leaning on God for this one. All right. My first notice lately is I'm noticing people, they're not including all necessities when they're making a budget. I just had an assessment meeting a couple of weeks ago, and the lady had told me, you know, I'm I have enough when I put everything on paper. I have enough, but for some reason it doesn't feel like enough. And I had asked, okay, well, what's on that paper you got? What's what's on the budget? And she's like, it's all of my bills, you know, it's all my debt. And I was said, okay, do you include your groceries, your fuel, you know, kids' lunch? Do you include, you know, all the things that you need to still run life that doesn't have a due date? And she didn't. And guess what? That's where a lot of our money is going. Now, obviously, there's some other things that she can improve on, but a lot of the times I talk to people and they're like, it looks good on paper. And it's because you're neglecting eating, you're neglecting your groceries. So I encourage you that when you're creating your budget for the first time, you include everything that is a necessity, everything that has a due date, plus everything you need to live your life. So again, groceries, fuel for the cars. Um, if you have transportation costs that's outside of that, if you know every week you pay for kids' lunch and you're paying for their soccer program or whatever it is, that has to get included into your budget as well. The next one I kind of was convicted on. So this is one that I'm gonna share with you, but I'm also gonna share back to me that I need to be better at this too. Okay. And that is the I can do that mentality while you are on a journey, while you're on a financial freedom journey, while you're on your debt payoff journey. It's the I have free cash, so I can do that mentality when you're not quite at the end goal. So for instance, if you we're coming into summertime, right? And I always say when the sun comes out, we just spend too much money. And that's that's me too, okay? When the sun is out, the wallets are out. And I know that every summer we end up spending a lot of money on just entertainment and fun. You know, I'm very blessed that I get to be home with the kids. So we get to do a lot of day trips and a lot of activities and just fun stuff all throughout the summer. And it comes at a cost, right? And I kind of put our goals to the side during these months so that we can go and do these things. And interestingly, that's kind of been my whole MO in the six months that I've six months in the six years that I have been a financial coach, is you know, we want to live our life too while making these goals happen. But uh, I notice like when we get to a point where we stop our goals completely for a few months to go live life, it's hard to come back into that realm of, all right, fun is over, let's get back to it. Versus we should just be guns ablazing, get this thing knocked out and taken care of, and then go have a good time. And I know that feels funky, and it still feels funky even coming out of my mouth right now. It feels funky, but I just think of if we can just get it knocked out in two years at max, right? If we can get it done in two years, you have got the rest of your life financially free if you're making good decisions, right? Financial good decisions. Or you could take eight years of having fun, but still trying to pay off debt and still trying to become financially free and have this kind of roller coaster of we've got money, we don't have money, we've got money, we don't have money, we got money, we don't have money. So I will tell you, I've been recently convicted on this, and I thought maybe, man, I just I need to share this with y'all as a personal note that listen, just because I'm a financial coach doesn't mean that I'm not human. All right. I still um transition and I still find out new information and I I get convicted on things. And I just think it's really important that if you're gonna be going on this journey and I see clearly why it's like that and why people suggest that, if we're going on this journey, we're doing it. We're we're not giving up. We are going on this journey, come hell or high water, and we're gonna go on it until we're done. Um, so I feel like, man, that's a really, really good one of a common mistakes that we're we're making when we're trying to change our financial life. The next one is paying off debt with no savings. That one's a big no-no for me. Uh-uh. And I I have this conversation with people in assessment meetings all the time. And they come to me, all right, what do you want to accomplish maybe in the next six months to a year? And it is, I really, really want to get these debts paid off. And I'm like, great, what's your savings look like? Oh, we don't have any savings. I'm like, I hear you. I really want us to pay off that debt. Even more so, I want us to have a safety net. I want us to have an emergency fund because something in life is going to pop up and we are going to need money. And what are we gonna do if we need money and we don't have money? We're gonna go get debt so that we have money, right? And that's that continues the cycle that you have been on forever. So we have to put money in savings first, and then we're going to go ahead and pay off debt. And that number can be anything. Um, it can be a thousand, it can be 500, it can be 6,000, it can be, it just depends. And I I talk to clients all the time about this of what is that magic number? And it really depends. It's going to be different for someone that is a single person, no kids, than it is going to be for a single household income and four kids. But still, the common mistake of just paying off debt, and I mean extra on debt, okay, but not having a savings. No, no, no. That's a big common mistake. I don't want you to do that. Okay. I don't want you to do that. Okay. Another common mistake that I see is automatic savings. I don't love it. I don't love it until you get to a point where you are so secure in your finances. Then I love it. Then it's just great. But if we have a cash flow problem, then we've got a problem where we're putting money in savings and then we're taking it out and we're putting it in, we're taking it out, putting it in, taking it out. We have to turn that off from the very beginning. Every single one of my clients, a lot of them I've been seeing lately is percentages. People are putting a percentage into their savings instead of an actual dollar amount, or they're putting a percentage into a bill account or a percentage into a spend account and stuff. I don't love percentages from the gate. I can see where they're helpful later down the road in your financial life or your financial journey, I mean, but I don't love it. I don't love automatic savings at all, automatic transfers. I don't love it at all. I don't know how many times I have to say that. Uh the downside, again, is you're putting stuff in these accounts and then you're having to take it out because there's no plan with the cash flow. Uh, for instance, I met with a woman this morning and her cash flow is super short at the at the beginning of the month, but at the end of the month, she's got a lot of money and all throughout the month, the same amount every single week she's putting into savings. I'm like, you don't got it, sister, to put it at the beginning of the month. Just double it up at the end of the month where you have money. And it's amazing. Like, you don't know that until someone else looks at your finances and says that kindly to you. Like, here's another way to do this. I think it's great that you're you're putting in the effort to put money into savings, but it feels defeating whenever you have to put it in and take it out, put it in, take it out. But over a month's time span, you actually have the availability to put money into savings. So let's do that. But let's do it at a time where you actually have money in the month. And that's why I don't really love automatic savings. The last one is it's so common. It's so common with people. And it is paying extra on all debts instead of just one. It is throwing 400 there, 200 there. I've got my tax return. Great. I'm gonna pay extra on this one and this one and this one to bring all these balances down, but you're actually not paying anything off. Listen, the snowball method is awesome. That's usually where I start every single one of my clients. The Avalanche method is great too, but I want people to have real nice quick wins. So I always recommend the snowball method. That is, you list your debts from smallest balance to largest balance. And then all the money that you're putting extra towards all these different debts, I want you to pay minimum on everything and then take all that extra and apply it to that smallest balance first. Get that knocked out. And then the next month, let's say you get it knocked out in one month, the next month, you're gonna take what you were paying on that smallest balance and all the extra dollars, and you're gonna throw it at the next smallest balance and you're gonna get knocked that knocked out. And it might take you one, two, three months, but you're doing that and then you're paying minimums on everybody else. And sometimes people get caught up in the interest rate. And if you just Google a debt calculator, you can find one and it'll tell you how much you're actually paying in interest throughout months, right? Sometimes you're only paying like$20 interest. And I'm like, I would pay$20 in interest for three months if I could get this bit this debt card, yeah, this debt card, this credit card paid off. If I could get this debt paid off, right? So I think I understand when you are scared and you're worried and you see these large balances and you see these large interest payments that you want just to bring balances down. But if you have a system in place to help you effectively and efficiently pay off this debt and quickly get some wins, you are going to have so much more success. So much more success. So definitely paying extra on all debts except for one is a common mistake I see, and that I wish people would do differently. And if you want to do differently and you want help, hey, come on over to the Better Budgeting Playbook. It's my one-on-one coaching program. I am so happy to help you and guide you through your financial journey so that you can get to a point where you are just financially free or even debt-free. And it goes back to that one I said, like, I want you to have that, I'm doing this and I'm all or nothing right now. If I'm going into coaching, I am ready to commit to however long it's going to take to get out of this debt. I don't want to lollygag. I just want to get it done and get it over with. And if that is you right now, if you've been binging on these episodes, which a lot of you have actually, it's been a blessing. Um, I actually haven't recorded or or posted anything in or published anything, I guess, in I guess eight weeks, maybe even nine weeks. And y'all have showed up. Like numbers are off the charts. Some of you are just messaging me and you're binging these episodes. Great, let's get to work. If that is you, let's get to work. All right. Thank you so much for always listening um into these episodes, and we'll talk again soon. Take care.