Financial Red Flags: 7 Money Mistakes That Could Cost You Thousands

Introduction

We all have that one friend who always seems to be broke before payday. Or maybe… you are that friend.

Listen, money mistakes are sneaky. One small habit, like swiping your card a little too often, can snowball into a financial disaster. And before you know it, you’re staring at an empty bank account wondering where all your money went.

So, let’s talk about the 7 biggest financial red flags that could be costing you thousands, and more importantly, how to fix them before they ruin your finances.

1. Living Paycheck to Paycheck With No Emergency Fund

If your entire paycheck disappears the moment it's deposited into your account, that's a big red flag.

Think about it: what happens if your car breaks down? If you get fired? If you have an unexpected medical bill? Without a financial cushion, even a minor emergency can turn into a complete catastrophe.

Fix It:

• Start small: Aim to save $500 to $1,000 as an initial emergency fund.

• Utilize Plently's auto-save feature to make savings automatic so money is saved before you even get a chance to spend it.

• Ideally, work towards 3-6 months’ worth of expenses in your emergency fund.

Pro Tip: Keep your emergency fund in a high-yield savings account so it increases over time!

2. Ignoring Your Credit Score (Until It’s Too Late)

A poor credit score doesn't only mean inflated interest rates. It can affect your capacity to rent an apartment, obtain a car loan, or even secure specific jobs.
Yet, majority of people neglect their credit score until they need it and stress later on since they find it too low.

Fix It:

• Check your credit score at least once a month (sign up for free apps like Credit Karma).

• Pay all your bills on time because even a single missed payment has the potential to bring down your score.

• Keep your credit utilization below 30% (i.e., don’t max out your credit cards).

Example: If you have a $5,000 credit limit, try not to carry a balance over $1,500 to keep your credit score healthy. 

3. Relying Too Much on “Buy Now, Pay Later” Services

Klarna, Afterpay, and Affirm make it too easy to shop without feeling the pain of paying money upfront. But the catch? All those tiny payments can rapidly escalate.

Most end up juggling multiple BNPL payments at the same time, turning what was seemingly a "small" purchase into a budget problem.

Fix It:

• Only use BNPL only for essential items, not for impulse purchases.

• Set reminders for payment due dates to avoid late fees.

• If you're using BNPL monthly, look carefully at your budget, are you spending beyond your means?

Reality Check: BNPL isn’t free money. It’s just delayed spending.

4. Not Investing Because You Think You’re “Too Broke”

The majority of young people believe investing is for rich people. But let us tell you: putting off investing is one of the worst money moves you can make.

Investing even a small amount of $10 per month will grow exponentially in the future thanks to compound interest.

Fix It:

• Use investing apps like Acorns, or Robinhood to start with small investments.

• Invest for the long haul (index funds and ETFs are great for beginners).

• Take advantage of employer 401(k) matching if your job offers it—it’s literally free money!

Example: Investing just $50 per month at an 8% return could grow to $75,000 in 30 years. The earlier you start, the bigger the payoff.

5. Paying Only the Minimum on Credit Cards

Credit card companies love it when you only pay the minimum balance. Why? Because it keeps you in debt longer, which makes them more money in interest.

If you only pay the minimum, it could take years to pay off even a small balance, and you’ll end up paying way more than you originally owed.

Fix It:

• Always pay more than the minimum, even if it’s a little extra.

• Use the debt avalanche method (pay off high-interest debt first) to reduce interest.

• If you’re drowning in credit card debt, look into balance transfer credit cards with 0% interest offers.

Example: A $3,000 credit card balance with 20% interest will take you more than 10 years to pay off if you only make minimum payments, and you'll pay thousands of dollars in interest!

6. Not Tracking Where Your Money Goes

If your bank account is always empty and you have no idea why, it's a red flag.

Most people underestimate how much they spend on subscriptions, takeout, or random Amazon purchases.

Fix It:

• Use budgeting apps like YNAB, or Mint to track your spending.

• Do a monthly spending review to see where your money is really going.

• Set spending limits on non-essential categories (like coffee, takeout, and entertainment).

Fun Fact: The average American spends $219 per month on subscriptions—many of which they forget about! Time to cancel those you don’t use.

7. Thinking “I’ll Save Later” Instead of Now

Most people put off saving money because they think they need to earn more money first. But the truth is, saving is not about how much you make, but about what you do with what you have.
If you don't do it now, you probably never will.

Fix It:

• Make your savings automatic so you don’t even need to think about it.

• Follow the 50/30/20 rule (50% needs, 30% wants, 20% savings).

• If saving feels hard, start with as little as $5 a week and increase over time.

Example: Saving a mere $27 a day will bring you to $10,000 within a year. Small amounts count!

Final Thoughts: Stop Ignoring the Red Flags

Money mistakes don’t just happen overnight. They build up over time—slowly, quietly—until one day, you wake up and you realize you’re in deep.

But the good news? You can turn things around.

Start by fixing one red flag at a time. Form better money habits. Take control of your money before your money takes control of you.

Now think about it. Which of these red flags have you been avoiding?