6 Money Mistakes That Kept Us Broke (and how we fixed it)
Everyone wants to enjoy life, take vacations, and have the freedom that comes with being debt-free. But for years, that dream felt out of reach for us. We didn’t turn upside down financially overnight, and we sure didn’t turn things around in a week. The truth is, we made the same seven money mistakes over and over—and these habits drained our bank account, filled our days with stress, and made us feel like we’d never catch up.
If you’ve ever felt trapped by your financial decisions, you’re not alone. The good news is that every mistake brought a lesson, and every lesson brought us closer to the life we have now—a debt-free home, real vacations, and a growing sense of peace about the future. Here’s exactly what we did wrong, what it cost us, and the simple changes we made that fixed everything.
The 6 Money Mistakes That Kept Us Broke
1. Buying Too Much House
When we bought our first home, we let emotions make the decision instead of the numbers. It felt exciting at the time, but it locked us into a house payment that ate up more than 35% of our take-home pay. Housing experts often warn: if your house payment hits 25% of your take-home income, you’re on solid ground. Once you push past 35%, things feel tight. Over 40%? Every payday feels like a gasp for air.
We spent years with that weight on our shoulders. That oversized mortgage squeezed out the money we could have put towards savings, retirement, or any sort of emergency fund. Looking back, a smaller house would have given us far more freedom and much less anxiety.
2. Treating Debt Like a Fact of Life
We assumed debt was just part of being an adult. Everyone we knew had loans for college, cars, furniture, you name it. When debt becomes “normal,” every new loan feels like a small step, not the big mistake it really is. We didn’t question it; we just signed the papers.
This mindset kept us stuck. We lived on the “interest paying side” of the equation, never giving our money a chance to earn interest and build a better future for us.
3. Always Having Car Payments
We made another classic mistake—paying for cars with loans, again and again. We never saved up for a car. I didn’t even know anyone who paid cash for a car. Each time we paid off one car, we failed to save for the next, signing the loan without a thought. This cycle just made sure we always had another monthly payment.
All that money going to car loans could have been working for us. If you’re always in a payment cycle, you never get ahead.
4. Trying to Keep Up With Others
Comparison is a silent thief. We didn’t sit around comparing ourselves with our neighbors out loud, but the urge to “keep up” was always there. Whether it was seeing pictures on social media or hearing about a friend’s new car or vacation, it fueled poor decisions.
That’s how we ended up buying a car we couldn’t afford or charging an entire trip on a credit card. If we’d focused on our own finances—not on what others had—we wouldn’t have felt the pressure to make decisions that set us back.
5. Ignoring the Numbers
The times we most needed to sit down and look at our finances were exactly when we forced ourselves to look away. We thought if we didn’t look at our budget, the problems would go away. In reality, they only grew.
Ignoring where your money goes never fixes a thing. As soon as we started facing the numbers head-on and giving every dollar a job, everything changed. But pretending the problem wasn’t there just left us struggling even longer.
6. Not Automating Savings or Investing Early
We waited far too long to start investing for retirement. We didn’t join our employer’s retirement plan until our mid-40s. That meant we spent more than 20 years missing out on compound growth. Even though we lived paycheck to paycheck, we almost certainly could have found $100 a month to save or invest if we’d tried.
That missing $100 a month over the years made a massive difference. Instead of letting interest work for us, we paid it to someone else, and lost decades of growth because of it.
Turning Around From Broke to Debt-Free
A long list of mistakes left us drained and worried. But we didn’t stay there. It took four big changes to turn things around, and each one mattered.
1. Deciding Enough Was Enough
One day, we realized nothing would change until we made a change. That moment of frustration was the start of our new path. We moved from the Midwest to the Southwest for a better job opportunity. It wasn’t easy, but it built margin into our budget—margin we had never felt before.
Getting tired of being broke gave us the push we needed to make a real, lasting change.
2. Paying Off the Debt, No Matter What
We went all in. We added up our income and bills, and saw there was barely any margin some months—sometimes even less than zero. We knew we had to create space between what we earned and what we owed.
So we made a team commitment: whatever it took, we were getting out of debt. That commitment—to each other and to a better life—kept us going. Every extra dollar went toward destroying our debt until it was gone.
3. Using a Zero-Based Budget
We got organized by using a zero-based budget. Every dollar got a job. We tracked all money coming in and every expense going out. This budget wasn’t just a spreadsheet; it was a roadmap that helped us pick off each debt, one at a time.
Both of us were rowing in the same direction, so to speak. A couple fighting over money never gets ahead, but when we agreed on the plan, we started winning. Each month, the margin grew, and that momentum made all the difference.
4. Investing Once Debt Was Gone
When we paid off our debts, we didn’t stop there. We took the “gap” we created—the extra money we used to send to debt collectors—and put it into retirement and savings. At first, we just used what our employer matched. Then once the margin got bigger, we put even more toward retirement.
We moved from paying interest to earning interest. Our net worth started rising and our stress fell. We could finally direct money to causes we care about and spend on some things just for fun.
Life After Debt: Freedom, Fun, and a Future
Today, we own our home, take vacations, and enjoy the small luxuries we used to think were out of reach. We have savings. We have options. More importantly, we have peace—because we know our money is working for us, not against us.
It didn’t take a huge windfall or a lucky break. It took facing the truth about money mistakes and making a plan to fix them. Every step—paying off the house, ditching car loans, fighting that urge to compare—brought freedom.
Final Thoughts
If any of these mistakes sound familiar, know you’re not alone. Most people struggle with at least a few on this list. But habits can change, and so can your future. Start small. Make one change at a time, and you’ll start to find margin you never thought possible. You might be surprised at just how far you can go.
Want more tips or have a story to share? Leave a comment or check out the other resources over at Budget Coach USA and on YouTube. Take it from someone who made all the mistakes—there’s a better way waiting for you.
