Broke Lifestyle: 3 Money Mistakes

Broke Lifestyle: Stop Making these 3 Money Mistakes

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Poor money management has been the cause of more business failures and broke lifestyle, than any other single issue. And it’s no wonder.

We aren’t born knowing how to manage money. Most of us aren’t taught how to handle it either.Click to Tweet

We figure it out along the way, through much trial and error.

Those same mindset issues and bad habits that wreak havoc in our personal finances can plague our businesses as well if we’re not careful.

Broke Lifestyle Habit 1:

Catching Shiny Object Syndrome

Some things are just hard to resist—especially when your friends and colleagues are all jumping on board! New tools, training, group coaching programs and even business models can all have a strong pull, and if you aren’t careful, these shiny objects can quickly distract you from your current goals.

2 Tips To Stop Shiny Object Syndrome

  • For “too good to refuse” offers, make a plan for achieving a positive ROI before you purchase. If you cannot find a (realistic) way to make the purchase pay for itself, don’t buy it.

 

  • For exciting new business ideas, create a “someday” list. Jot down your idea and a basic outline, then get back to the task at hand. Now that great idea won’t be lost, but it also won’t join the ranks of half-finished business plans that litter the internet.

 

Broke Lifestyle Habit 2:

Falling for the Sunk Costs Fallacy

If you’ve ever said to yourself, “I’m not using this subscription, but I can’t give it up! I’m still paying the launch price and now it’s much more expensive!” Then you’ve fallen for the sunk costs fallacy.

This common mistake is famous among economists, and we all fall victim to it from time to time. Simply put, the sunk costs fallacy is what makes us justify investing more money or time in something—even though we’re not seeing results—because we’ve already spent so much. It’s what encourages us to repair the car one more time (after all, you just put new tires on it), eat a meal we don’t enjoy (simply because you’ve paid for it), and yes, continue to pay for tools and resources you’re not using.

Tip To Stop Sunk Costs Fallacy

Take a few minutes and examine your current business and personal expenses.

What are you paying for month after month that you’re not using?

Either make a plan to put them to work for you, or cancel them.

Stop falling for the sunk costs fallacy.

Broke Lifestyle Habit 3:

Too Much Penny Pinching

You thought this was all going to be about overspending, didn’t you? Here’s the kicker: Spending too little is just as bad for business or your personal life.

When you’re constantly on the lookout for free and low-cost tools or working 16-hour days because you “can’t afford to outsource,” you’re not doing your business/life any favors.

Sure, it looks like you’re bootstrapping and working really hard to make something from nothing, but what you’re really doing is digging yourself a rut it will be nearly impossible to climb out of.

Not only that, but you’re reinforcing a scarcity mindset that will continue to plague you for years if you let it.

Rather than pinching pennies, learn to spend money strategically.

Buy what you need, when you need it.

Invest in top-quality products and programs rather than settling for the low-ticket, half-baked plans.

Just like quality clothes, cars and furniture, quality services and software last longer and work better.  And unlike that car, good quality business tools will pay for themselves.

[maxbutton id=”1″ url=”https://reneemlamb.com/negative-self-ta…destroying-money/” text=”Related Reading – Negative Self Talk Is Destroying Your Money” ]

Book Recommendation

A great book to check out, that will help you around your money mindset is below.  Click on the image to read about it.

Let me know which Broke Lifestyle Habit you got going on and when you are going to break it?

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Renee Lamb

Renee has over 15+ years of experience in the corporate world. She has had management roles in HR, international healthcare and project management. But the role she loves the most is Job Exit Strategist for her own company, Renee M. Lamb, LLC. Renee is not only passionate for, (well maybe obsessed) being an advocate for helping professionals to gain freedom and wealth via entrepreneurship. She believes her role is to give them wings so they can soar to greater heights on their entrepreneurship journey. She does this by her coaching programs and courses.

  • Christa says:

    I definitely suffer from the sunken cost fallacy. I come to the right conclusion…eventually. I need to cut ties sooner. My husband and I recently sold an investment property that was a huge disaster. We should have sold much sooner. It’s so hard to cut your losses and move on.

    • Renee Lamb says:

      Christa – I wish I did not understand (LOL), but I sadly do. That is how we felt about our timeshare. You keep thinking, it is going to turn around, just hold on. And that can be true to some things, but not everything. Thank you for sharing your example and turnaround.

  • Amina Means says:

    My favorite is definitely “Penny pinching” I cannot stress how important it is to avoid this because it definitely leads to a scarcity mindset. You must learn to delegate and outsource when necessary, Time is of the essence – Burning out because you’re picking up this extra shifts will only lead you to function below your best!!

  • Holly Bird says:

    I am guilty of all three! I work on them, thank you for sharing your insight!

    • Renee Lamb says:

      Holly – it is a constant work in progress. Glad you were able to see it and then start to work on it. That is a huge accomplishment. So I know you will succeed. Thanks for sharing your comments, so others don’t feel like it just them. We all go through this.

  • Marisa says:

    Yessss these are all soo true! I can totally see all of those sales getting the best of me!

  • Cara Cozy says:

    This is interesting money advice – will have to think about it

    • Renee Lamb says:

      Cara – glad it got you to think about it. You might not take the exact advice, but it will open your mind to come up with another great idea that is perfect for you. So I take it as a win.

  • Mallaury says:

    I haven’t dealt with any of these but I know that this post is valuable and has some easy to understand tips for people who many be dealing with such issues. Thanks for sharing!

  • Shawree says:

    I totally agree with the shiny object syndrome. Personally I don’t have it, I’m more of the type to work the 16 hour days and not outsource smh. But I was shocked to see that when I was at a store the other day they had items for sale at the return/exchange counter.

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