The #1 Worst Financial Mistake Americans Make and How to Fix It, According to a Personal Finance Expert
Money can be seen as a taboo subject—but it doesn't have to be. By talking more about it, useful information can be shared and knowledge is, ultimately, power.
That's why popular TikTok creator and finance expert Pattie Ehsaei, a leader in financial services for over 22 years, wants to shine a light on the most common financial errors that Americans are making—including the #1 worst money mistake—and how to change problematic behaviors and mindsets related to your finances.
With Ehsaei's tips and advice, you can get back on track and work on a budget that will have you more prepared for day-to-day expenses and retirement at the same time.
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The #1 Worst Financial Mistake Americans Make, According to a Personal Finance Expert
"The biggest financial mistake Americans are making right now is not planning for the future, particularly in terms of saving and investing for retirement," Ehsaei tells Parade. "The social security trust fund is set to be depleted by 2034, and Americans are no longer able to rely on that payment for their retirement. The problem is that most Americans don't think of their future."
Related: 7 Things Financial Advisors Are Begging People Over 50 to Stop Doing
How To Fix It
"First, Americans have to get on a budget and be diligent about staying on track," Ehsaei begins. "There are many budgeting apps online which will help with this task. Without a plan, they're going nowhere fast."
Then, how should the budget look, exactly?
"[You] need to utilize the 50/30/20 rule," she explains. "50% of your income should go to your needs; 30% to your wants; 20% to your investment/savings. These allocations should be automated into these four separate accounts from [your] paychecks, so [you're] not tempted to spend frivolously and ensuring [you] are putting money away for your retirement."
3 Other Common Financial Mistakes That Americans Are Currently Making
According to Ehsaei, here are three other extremely common mistakes that Americans make with their finances:
Accumulating high interest debt and not paying it off quickly which can lead to significant financial strain due to compounding interest.
Failing to build and maintain an emergency fund for unexpected expenses, which can result in taking on debt during financial emergencies.
Impulse spending by making purchases without considering long-term financial goals.
How To Help Change Financial Behaviors That Are Problematic
If you're currently feeling the stress of poor financial planning, know that you're not alone and there are ways to help yourself get on track.
Shift Your Mindset
"Cultivate a positive money mindset by shifting your mindset to view money as a tool for achieving their goals rather than a source of stress," Ehsaei recommends.
Learn About Strategies
Another tip Ehsaei has for Americans who want to change their problematic financial behaviors? "Educate themselves on prudent financial strategies so they understand why they're making certain financial decisions and how it's going to benefit them in the future," she says.
Ask for Help
"Seek professional help if [you're] struggling with financial management by seeking help from a financial advisor or counselor," Ehsaei advises. "They can provide guidance tailored to your specific situation."
Next: 35 Easy, Realistic Ways to Make Money in Just One Hour
Source
Pattie Ehsaei, TikTok creator, finance expert and a leader in financial services for over 22 years
