Jaspreet Singh Says These 15 Money Mistakes Are Why Americans Are Broke
Jaspreet Singh is the financial expert behind the Minority Mindset YouTube channel. He specializes in helping average people improve their financial well-being. Recently, Singh published a video covering 15 money mistakes most Americans make. Keep reading to see how many apply to you.
Also see Singh’s 15 habits that can make you wealthy.
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Walking Around With an Open Wallet
Singh says the first mistake many Americans make is walking around with an open wallet. They buy whatever they want, whenever they want as long as they have the money in their account.
You should be more focused on building your financial future instead. That means saving money when you have extra instead of making more unnecessary purchases.
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You Never Ask For More Money
Next, Singh says many Americans never ask for more money. Whether you own a business or work for someone else, you deserve raises as your competencies improve and the cost of living climbs.
That being said, you still need to choose your timing carefully. If you know when to ask for a raise, you’re likelier to get one.
Paying Too Much in Taxes
As you increase your wealth, taxes often become more complicated. Singh says this can lead to paying significantly more in taxes than necessary.
He recommends hiring a tax professional to fix this — but only if it makes sense for your financial situation. If you earn under $75,000 annually and don’t have many assets, the cost of hiring a tax expert may not be worth the savings they can get for you.
Getting Money Advice From Your Bank
Next, make sure you’re not getting all of your money advice from your bank. Singh says banks are in the business of lending you money. It’s better for their bottom line if you buy a more expensive car or home, even if you don’t need one. That could be one reason why 90% of millennials have regrets about their first home purchase, as reported by Newsweek.
Instead of following your bank’s advice, look for financial experts whose incentives align with your own. There are plenty of free resources on GoBankingRates, YouTube and other sites that can help you make smarter financial decisions.
Not Having Financial Protection For Your Family
Singh recommends taking out a life insurance policy as you build your wealth. This will help your family maintain its lifestyle if something happens to you. Take some time to learn how to find the best life insurance policy for you and your family.
Not Negotiating
Next, many Americans don’t negotiate when making big purchases. That’s a mistake, Singh said, because it leaves savings on the table.
For example, although many American home-buyers negotiate with the seller, only 39% negotiate their APR with the bank that’s providing the mortgage, according to LendingTree. Remember, the worst the bank can say is no. By not trying, you guarantee that response.
Not Tracking Your Money
A 2020 Intuit survey found that more than 60% of Americans didn’t know how much money they spent the previous month. Singh says you can’t optimize your spending unless you track it.
Technology has made this easier than ever to do, so there’s no excuse. Singh recommends downloading an expense tracker app if you don’t have one yet.
Not Prioritizing Credit Card Debt
American credit card balances reached $1.13 trillion in 2023, according to a Federal Reserve Bank of New York report. This is symptomatic of a culture that doesn’t prioritize reducing credit card debt, Singh said. He says we should be focusing on this debt over other financial goals because it often carries a high interest rate.
Thinking Your 401(k) Is Enough To Retire
Funding your 401(k) and taking advantage of employer matching is a smart financial move. But don’t fall into the trap of thinking that you can retire on your 401(k) alone.
Instead, calculate the amount of money you need annually to achieve your lifestyle goals in retirement, then multiply it by 30 years. This is the true amount you need for retirement, which may be significantly more than your 401(k).
Keeping a Dead Savings Account
If you’re going to put money in a savings account, Singh says you might as well get some interest on it. But he’s against putting your savings in a “dead” account like a certificate of deposit (CD) that you can’t access for a pre-set number of months.
The reason for this is that it allows you to access your savings whenever you want. This gives you the flexibility to cover unexpected expenses and take advantage of financial opportunities as they arise.
YOLOing
Next, Singh warns against “yolo-ing” your money. He means you shouldn’t be casually throwing money into the next hot stock you read about online.
Instead of looking for the next GameStop, make disciplined financial moves consistently over time. Doing so is a proven strategy for building your wealth. If you put the same funds in meme stocks, you could get really lucky. But you could also lose everything.
This attitude is popular with crypto investments as well. Just because Dogecoin made millionaires doesn’t mean the next Memecoin you buy will do the same.
Caring Too Much About What Others Think
Americans often make financial decisions based on the opinions of others. That can mean purchasing a new car just because your neighbor bought one or buying a bigger house than you need in order to impress people. Singh said trying to keep up with the Joneses will destroy your wealth.
Owning Assets in Your Own Name
Singh said owning assets like rental properties in your name isn’t a smart move. When you do, you can be held personally liable in legal disputes. In other words, a renter who has a bad experience could come after your personal bank account.
Instead, consider holding major assets through a limited liability company. Doing so limits your legal liability by separating your personal finances from your rental business.
Obsessing Over Money
Although Singh talked a lot about how to optimize your financial situation, he said it’s a mistake to obsess over it. Having enough money is just one part of living a good life. You also have physical, mental and spiritual needs that are easy to ignore when all you care about is your bottom line.
Instead of ruminating on your portfolio, make an informed decision and then move on with your day. This keeps your relationship with your finances healthy so you can enjoy life.
Not Investing in Yourself
Finally, Singh closed out his video by sharing the importance of investing in yourself. Doing so can bring both financial and non-financial value to your life. For example, you might go back to school to get a certificate in your field. Doing so could help you get a raise while also giving you new perspectives that can enrich your life.
Singh said it’s worth spending money on experiences like these. They may pay for themselves over time. But even if they don’t, you can evolve as a person through them.
Finding Financial Balance
Singh’s video is a reminder that building wealth is as much about avoiding financial pitfalls as it is about making smart investments. If you’ve been making some of these mistakes, it’s never too late to create a better financial future for yourself. Just focus on taking the next step forward and move one day at a time.
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