Top 5 Mistakes People Make With Their Money

By Glenn J. Downing, CFP®

Thinking about David Letterman retiring and all those Top Ten lists.  I thought it might be fun to compile one of my own.  To wit:

The Top 5 Mistakes People Make With Their Money

          This is a list compiled after about 17 years of experience.

Mistake #5:  You eat out way too much.  This is what your kitchen is for!  If you get a sandwich and a coffee in Coral Gables on a daily basis, you’ve spent ($10/day * 20 days) $200 in a month!  How about all that fast food?  I’m seeing families who spend several hundred dollars each month eating out, when a little planning and Publix time could save most of that money and everyone would be healthier and richer for it.

Mistake #4:  You don’t have enough life insurance.  What happens if you get hit by a bus?  Are your existing savings enough for your surviving spouse and children?  Term insurance is relatively cheap and easy to obtain.  No excuses.  See Mistake #5.

Mistake #3.  You don’t have an emergency fund.  Emergencies are not a matter of whether, but of when.  The transmission will go out.  The A/C will eventually need replacing.  Murphy’s Law still prevails.  Anticipate the expenses, and save toward them, thereby keeping yourself from going into debt.

Mistake #2:  You don’t contribute up to the employer match in your 401(k).  It is very common for employers to match your contributions up to a certain percentage.   Fifty cents on the dollar up to 6% of earning is a common formula.  That means that if you contribute only 4%, and you earn $75,000, you’re leaving $750 on the table.  For shame!


. . . drumroll please . . .


And now, Mistake #1 – my pet peeve:  Over withholding on your federal taxes.  People like to get big refunds.  Makes no sense.  All you’re doing is getting your own money back at 0% interest.  If you have a $2400 refund, that’s an additional $200 you could’ve had in your paycheck each month.  See Mistakes #3 and #4.


Glenn J. Downing, CFP®

For more on Glenn, and how he can help with your financial plan, visit

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