We’ve all been there, checking our bank account and wondering, Where did all my money go? Financial mistakes are part of life, but some can set us back for years if we’re not careful. Whether you’re just starting your financial journey or trying to clean up past mistakes, here are some common money missteps to avoid and what to do instead.
- Living Beyond Your Means
Ever bought the latest iPhone when your old one still works fine? Or moved into a fancy GH₵3,500-per-month apartment in East Legon just because it looked nice, even though you could comfortably live in a GH₵1,500 place? It’s tempting to upgrade your lifestyle the moment you start making more money, but this is a quick way to financial stress.
The Fix:
Live below your means. If you get a salary increase, don’t immediately increase your spending. Instead, use that extra cash to build savings or invest. Remember, wealth isn’t about how much you earn. it’s about how much you keep.
- Ignoring an Emergency Fund
Life happens your car breaks down on the way to work, your landlord increases rent, or a family member suddenly needs help. Without an emergency fund, you might find yourself borrowing from friends or taking a high-interest loan just to survive.
The Fix:
Start small. Aim to save at least GH₵1,000 as a cushion, then work towards having three to six months’ worth of expenses in a separate account. This will prevent you from running into financial crises every time something unexpected happens.
- Relying Too Much on Credit and Loans
It starts with a small loan from your mobile money provider, then a quick loan from a bank, and before you know it, you’re drowning in debt. If you’re only making minimum payments, you’re basically giving free money to lenders in the form of high interest rates.
The Fix:
Use credit wisely. Before taking a loan, ask yourself: Do I really need this, or can I save up for it? If you must borrow, ensure it’s for something that will increase your financial value—like education or business—not for new clothes or weekend outings.
- Not Budgeting (Because It Sounds Boring)
Budgeting sounds restrictive, but not having one means you’ll always be broke before the month ends. Without a budget, money slips through your fingers, and before you realize it, you’re waiting for “payday” with only GH₵50 left in your account.
The Fix:
Use a simple rule like 50/30/20:
• 50% for needs (rent, food, transport, bills)
• 30% for wants (movies, chilling, shopping)
• 20% for savings and debt payments
Track your expenses, even if it’s just writing them down in a notebook or using a budgeting app.
- Not Investing Early
Many young people in Ghana think investing is only for the rich or old, but the earlier you start, the better. Imagine putting GH₵200 into an investment fund every month for 10 years thanks to compound interest, you could end up with hundreds of thousands of cedis without doing much.
The Fix:
Start small. Apps like Troove, Databank MFund, or Stanbic Income Fund allow you to invest with as little as GH₵50. If your workplace offers Tier 3 pension schemes, sign up, it’s free retirement money with tax benefits!
- Ignoring Your Debt
You took a student loan but have no repayment plan. You owe mobile money lenders, a bank, and three different friends, yet you keep postponing payments. Ignoring debt doesn’t make it go away—it makes it worse.
The Fix:
Make a plan. Try the snowball method (pay off the smallest debt first for motivation) or the avalanche method (pay off the highest interest debt first to save money). Stop borrowing just to cover old debts—it’s a cycle that will ruin your finances.
- Trying to “Keep Up” With Others
Your friend just bought a GH₵15,000 iPhone 15 Pro Max, your colleague goes on vacation to Dubai, and now you feel the pressure to match their lifestyle. But here’s the truth: you don’t know how they afford it. Some people are drowning in debt just to look rich.
The Fix:
Run your own race. Instead of feeling pressured, focus on your own financial goals. True wealth is financial security, not expensive gadgets or vacations you can’t afford.
- Not Setting Financial Goals
Without a financial goal, you’ll end up spending money aimlessly. You might want to buy land, start a business, or retire early, but without a clear target, your money will keep disappearing into small, unnecessary expenses.
The Fix:
Set SMART goals (Specific, Measurable, Achievable, Relevant, Time-bound). Instead of saying, I want to save money, say I want to save GH₵20,000 for land in two years by saving GH₵800 every month. A clear goal makes saving much easier.
Final Thought:
Making money mistakes doesn’t mean you’re bad with finances—it just means you’re human. The key is to recognize them early and take small, consistent steps to fix them.
The best time to start managing your money wisely? Yesterday. The second-best time? Right now.
