If these actions weren’t so downright dangerous, they might be humorous. Are you making one or more of these mistakes with your money?

1. They have never worked out how much money they actually need every week to exceed just paying their bills. They haven’t worked out a budget.

The appropriate definition of a BUDGET is: the calculation of the amount of money needed for an organization to function and achieve its purpose. If you are happy with just being able to pay your bills, and you never pay yourself first into some type of savings plan, you’ll stay poor while you make your vendors rich. Every vendor that you get a bill from is in business to make profits. You should run your business to make a profit. The income goal needs to include enough profit or the enterprise will fail financially.

2. They don’t work out ways to make more money than they need, and then be willing to do whatever it takes to carry out their plan.

By incorrectly estimating the amount of money needed to exceed breaking even, they almost always set their income goal too low and lose money by living on credit instead of going into action to raise their income. Anyone can find different ways to make more money; it is more often the ‘willingness to do whatever it takes’ that is the problem.

3. They have a habit of spending more money than they make.

Using your income to buy the ‘appearance’ of being wealthy is a dangerous activity. I call this type of spender a Gratification Groupie. This can catch up with you quickly and over a short time can drown you in debt. Being in this situation causes constant stress about money and brings on lots of sleepless nights. Money truly cannot buy happiness. However, doing something worthwhile and productive and being appreciated for it will make you feel like a million bucks.

4. They never figure out what they need to buy in the future and set aside a bit of cash every week so they can pay cash for the purchase later.

Purchasing something with a credit card because you don’t have the money is committing your future production to the credit card company. You are then in economic slavery to the credit company. The correct way to buy things, especially big ticket items, is to put away a little every week till you have the cash to purchase the item, and then go out and negotiate a big cash discount. The guy with the CASH IS KING!

5. They buy products and services based on WANT rather than on NEED.

Buying decisions must be based on how your purchase of the service or product can assist you to produce additional income for you. Honestly, do you want the new cell phone that features email retrieval and text messaging because your friends have one, or do you need it to increase your work productivity because you are out of the office making more money?

6. They never contribute to a retirement savings plan so they have money for use later in life.

Are you counting on the younger workers’ future production to supply you with Social Security income when you stop working? Boy, that is a huge gamble! Despite the fact the government says the cost of living is rising 3 - 3.5% a year, the real figure is 8 - 12% a year. You have to make that much more income just to break even. Why does the government say it is only 3 - 3.5%? Unfortunately, it’s because the government has to increase Social Security payments every year by the percentage they quote. The Social Security system is already bankrupt and those living on Social Security alone are going in that direction.

7. They never build up multiple sources of income. If one source disappears they are in financial trouble.

The old saying ‘don’t put all your eggs into one basket’ holds true today, especially when it comes to income sources. Locate profitable services or products you can add, or business ventures you can participate in that are ethical, and have a really good opportunity to producing a residual income.

8. They get stressed out about how little interest their bank pays on savings accounts while they are getting killed with much higher interest rates by carrying balances on their credit cards.

If you have substantial credit card debt, you are better off using excess cash to reduce the debt and stop the high interest payments rather than attempting to earn interest from the bank. As you reduce your debt, you should also keep sufficient cash on hand to cover a few months of living expenses. Once the debt is gone, or close to it, then start investing any excess cash in investments that return real growth.

9. They worry about ‘the economy’ in general.

I’m surprised that people are actually more worried about ‘the economy’ than about their household or business failing financially. They worry about what the media is reporting about ‘the economy’ when that is something they can’t control, while never looking at how they can affect the economy of their own household or business, which is what they CAN control. An increase in unemployment is no reason to worry. Small business’ creation of new jobs far outweighed the loss of jobs in large corporations, according to the latest ADP report. A bank failure is no reason to panic. Banks receive funding for bailouts from the FDIC and other investors. Nobody is standing by to bail out your failing business. That is entirely up to you. So keep promoting your business, put aside some cash, and sleep like a baby while the bad news about ‘the economy’ rages around you.

10. They expect to survive financially without taking full responsibility for controlling their financial future.

There is a simple solution to money problems. Cut expenses, increase your income, and correctly manage what income you bring in. It’s not only about how much money you make, it’s what you do with it that determines your financial condition.

Proper money management is something educational institutions don’t teach. People receive false information and bad advice about how to handle money. Then they make these silly mistakes, get into trouble, try to solve the problem using credit, wind up in more trouble, and then go looking for debt relief.

Fortunately, there is an inexpensive, proven, money management software system that can reverse all the money management mistakes a person has made in the past, and keeps them from making the same mistakes in the future. It is an old-school system your great grandparents used before the days of credit cards. Very rich people understand and use this system today.

Sandra Simmons, President of Money Management Solutions, has years of experience helping business owners manage their money to achieve financial freedom.

- Sandra Simmons