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15 Things You Should Not Have Done With Your Money in 2023
Money Management

15 Things You Should Not Have Done With Your Money in 2023

As the end of the year approaches, it’s essential to take time and review your spending habits. The reason for doing this is simple: get valuable insights to help set you up for a successful year ahead. And the best way to do that is to look at everything you did with your money in 2023 and ask yourself if it was worth it.

One of the key benefits of reviewing your spending habits is the opportunity to assess your financial situation and make necessary adjustments. It can help you identify all the money mistakes you committed, provide you a chance to learn from them, and prevent you from repeating them in 2024.

Questioning how you spent your money this year? Here is a list of 15 Things You Should Not Have Done With Your Money in 2023 and what you can do to avoid the same mistakes in 2024.

Read Also: 11 Worst Money Management Mistakes to Avoid

Use your Savings to Pay for Emergencies 

How did you finance your unexpected expenses this year? Did you dig into your savings, take a loan, or sell your belongings? If you used any of those paths, you didn’t spend your money well. 

Financial emergencies are inevitable, so it is crucial to keep yourself prepared. The best way to create a buffer that prevents you from using your savings or going into debt is by building an emergency fund and investing in insurance. As a rule of thumb, you should build a rainy-day fund that can help you cover at least six months' worth of expenses.

You need an emergency fund because:

  1. Spending your savings to pay for emergencies might delay you from achieving your financial goals
  2. Taking on debts to finance your emergencies eats from your future income
  3. Liquidating assets and investments to pay for unexpected expenses lowers your net worth

Read Also: What is an Emergency Fund and Why You Need One

Spending all your Income on Living Expenses 

To stay financially stable now and in the long term, you must spend your monthly income wisely. When you blow all your money on living expenses, you won't be able to save, prepare for emergencies or accomplish financial goals like buying a house. The first step to ensuring that your income accounts for your current and future needs is to embrace budgeting.

Ideally, you should be able to separate your income into three categories: wants, needs, and savings. Following the 50/30/20 budget rules allows you to achieve that. This budgeting technique allows you to live within your means and ensures you pay yourself first.

Finally, you should also ensure that you are constantly increasing your income to keep up with inflation, which might cause you to spend all your money on living expenses.

Read Also: 10 Warning Signs You are Living Beyond Your Means

Not Planning your Purchases

Did you take time to think before making a purchase this year, or were you a slave of consumerism? One of the most significant ways you could waste money is through impulse purchases. This is because you usually buy things you don't need, and occasionally, you'll regret it later. 

Impulse purchases breed a bad spending habit that can have devastating effects on your finances. It can cause you to waste money, prevent you from saving, and worse, pull you into debt. 

There are only two ways to overcome impulse buying: planning your purchases and shopping wisely. Before you buy something, think about how it could help you and if you need it. Sleep on it. Wise shopping involves adopting strategies such as shopping with a list, avoiding name-brand products, and looking around for better deals.

Falling for Get-Rich-Quick Schemes

Get-rich-quick schemes have been rising in Kenya for some time, and scammers keep coming up with elaborate, long-con games. They always seem to target two types of people: the greedy and the ignorant investors. If you are either of those people, you have likely fallen for one of their schemes and wasted money in 2023.

The most common types of get-rich-quick schemes you should avoid are pyramid schemes (also known as multilevel/network marketing), Ponzi schemes that promise high returns and no risk, and advance fee scams that ask for registration, connections fees, or handout.

To avoid falling for such scams, always do enough research, ask hard questions, and ensure any investment scheme you choose is registered and regulated by a reputable organisation.

Read Also: Too Good to be True? Signs It’s a Get-Rich-Quick Scheme, Scam 

Spending Money to Please People

There are three ways people spend money to impress or please people. The first group does it because of peer pressure from people around him or social media. The second group is the exhibitionists; they spend extravagantly to show off. And the third group does it to retain their place in the social pecking order.

If you fall into any of those groups, you should go back to the drawing board and rethink your financial decisions. While it might seem OK now, spending money to please people can have long-term effects on your finances. It will waste your money, prevent you from saving, and ultimately you will have to go into debt to keep up this habit.

Read Also: How to Figure Out if Someone is Worth Spending Money On 

Putting all your money in Illiquid Investments

Earlier this year, James, a 32-year- old doctor, had to go into debt after experiencing an emergency because of an avoidable mistake. His car developed a mechanical problem that needed about Ksh60,000 to fix. But James had to cash on him. 

Most of his money was in treasury bonds, and, to get maximum interest on his cash, he stashed them in high-yield fixed deposit accounts. The earliest one could mature in two months. James had two options, liquidating his accounts or taking a loan. The latter was cheaper, so he took that path.

If James had kept some of his money in liquid investments, he couldn’t have found himself in that dilemma. Now he’s had to pay interest and other loan fees to be able to address his emergency. Putting all your money in illiquid investments can cost you money and cause you to miss out on some investment opportunities.

Read Also: Where Do I Keep my savings? The 7 Main Places to Put Your Savings 

Loaning Money to Friends and Family Without any Guarantees

Every once in a while, family members and friends will approach you to lend them money or cosign a loan for them. When that happens, you have to make a decision. As much as you could want to be there for your loved ones, you also have to think about how your response will affect your finances. 

But when involving money and family, it's crucial that you take emotions out of the equation and make rational decisions. First, you should only lend out money you are willing to lose. That means that if your loved one defaults, it won't significantly affect your finances.

When lending money to loved ones, you should also consider their ability to repay and how they plan to use it. Conduct your due diligence to ensure the risk of losing your money is low. Finally, you should have an agreement and take collateral. This reduces risk and allows you to claim your money in case of default. 

Read Also: Money and Friends: How to Lend to a Friend 

Ignoring your Risk tolerance When Investing 

Ignoring your risk tolerance when investing can be a costly mistake. Risk tolerance is an individual's willingness to take on financial risks, which varies from person to person. Understanding and considering your risk tolerance before making any financial decisions is important.

Ignoring your risk tolerance can cost you in two ways. It can result in taking on too much risk, which can lead to significant losses when you exaggerate your risk tolerance. On the other hand, not taking on enough risk can result in missing out on potential growth opportunities when you are fearful and risk-averse.

Taking your risk tolerance into consideration while investing helps you choose investment strategies that align with your goals, prevent impulsive decisions, give you peace of mind, and ensure you get the best out of your money when investing.

Read Also: 6 Clever Ways to Overcome Your Fears and Take More Risks in Your 30s 

Buying a Car Without Factoring in all the Ownership Costs

Most people only think about fuel, insurance, and maintenance costs when buying a car. But a car comes with a lot of hidden costs. Some of these costs can run in the tens of thousands per year, and as the car ages, the costs will only increase. Some of those costs include the following:

  1. Security - You will need to Install riveting parts to keep away petty thieves and avoid accidents, car alarms if you usually frequent unsafe neighbourhoods, and a car tracking system.
  2. Opportunity Costs - Did you buy your car for convenience, and is it helping you make more money? If not, it is a dead investment.
  3. Depreciation Costs - While your car will cost you hundreds of thousands in maintenance and makeover, its value will keep dropping as it ages. When you decide to sell it, you will likely fetch less money than you spent acquiring it.

Read More: The 7 Hidden Costs of Car Ownership in Kenya

Renting a House That Costs Over 30% of Your Income

Rent is one of the single most significant expenses on most people’s budgets. As a renter, it can be tempting to stretch your budget and spend a larger portion of your monthly income on rent to secure a nicer apartment or a more desirable and secure location. 

However, it is important to remember that spending more than 30% of your monthly income on rent can affect your financial health and overall well-being.

Spending more than 30% of your monthly income on rent leaves little room for other necessary expenses such as groceries, utilities, and transportation. This can lead to a constant state of financial stress and instability, making it difficult to save for emergencies and future goals. 

Read Also: From Bedsitter to One Bedroom: Biggest Financial Mistake of My 20s 

Assuming Buy now, Pay Later is not a Loan

Buy now, pay later (BNPL) is a payment option that allows consumers to purchase goods or services, pay a fraction of the cost as a deposit, and the remaining in instalments. BNPL is often sold as just a payment option; in reality, it is a type of asset financing loan.

You should stop assuming BNPL is not a loan for several reasons. For starters, BNPL companies charge fees and interest for their services. While the fees may not be as high as those associated with traditional loans, they can still add up quickly and strain your budget. 

Second, it could impact your creditworthiness as defaulting will lead to you being listed on CRB. Finally, it could lead to a debt trap as you will be forced to take other loans to pay the instalments when you are broke.

Read Also: Buy Now, Pay Later: Should You Avoid Lipa Pole Pole Deals?

Signing a Contract you Don't Understand

It is not a secret that contracts are boring to read. They’re filled with jargon that can make you fall asleep and, in most cases, hard-to-understand language. But that's not an excuse to skim through them and sign one blindly. 

So whether you are signing a new job contract, taking a loan, buying land, or signing any other type of agreement, take your time to understand the terms and conditions. Failing to do so can impact you in many ways, including:

  1. You might end up paying extra fees
  2. You might be held liable for things you assumed weren’t part of the contract
  3. It might hurt your reputation when you fail to deliver what you “promised” when you signed the contract.

If the contract is too hard to understand, it is advisable that you seek legal help from a lawyer to help you.

Read Also: How to Get Conned When Buying Land in Kenya 

Sticking to your Comfort Zone 

Sticking to your comfort zone can have significant financial effects. The most apparent effect is that you may miss out on opportunities for growth and advancement in your career. If you're content with your current job and salary, you may not seek new opportunities or challenges that could lead to higher pay or better benefits.

Also, staying in your comfort zone can limit personal development and growth. This can lead to a lack of motivation and drive to improve your financial situation. Without a sense of personal growth and development, you may become complacent with your current financial state and not take the necessary steps to improve it.

You can improve your career prospects, personal development, and financial situation by taking steps such as learning new skills, asking for more challenging roles at work, starting a side hustle, and constantly looking for better opportunities.

Read Also: 10 Financial Blunders 25-Year-Olds Make That Haunt them Later

Putting all Your Money Into one Investment, Not Diversifying

Diversification means spreading your investment dollars across different types of assets, such as stocks, bonds, SACCOs, MMFs, and real estate. This way, if one investment doesn’t perform well, the others can help balance out the losses.

For example, let’s say you invest all your money into one SACCO. If that SACCO registers a bad year or goes down, you’ll lose a significant portion of your investment. On the other hand, if you had diversified your investment portfolio, you would have a range of different vehicles, so the loss on one wouldn’t be as significant.

Diversification is a critical component of any successful investment strategy. It can help you reduce the risk of loss and improve your returns. 

Read Also: 7 Common Investing Mistakes To Avoid

Buying Things you Want but Don’t Need 

You open your phone, log into your social media account, and are bombarded with ads before you can even make three swipes. It's all too easy to fall into the trap of buying things you want but don't necessarily need. But this is a bad habit that can have serious financial consequences.

One reason people indulge in this habit is the instant gratification it provides. You see something you like and want it right away, regardless of whether or not you actually need it. This can be particularly dangerous when shopping online, where it's easy to click "add to cart" without really thinking about the long-term consequences.

The financial effects of buying things we want but don't need can be significant. It can lead to overspending, debt, and financial stress. It can also prevent us from achieving our long-term financial goals, such as saving for retirement or building an emergency fund.

To avoid this habit, it's essential to take a step back and ask ourselves if we really need the item in question. It can also help to wait a few days before purchasing to see if the desire to buy it fades. Another effective strategy is to create a budget and stick to it, to ensure that we're only spending money on necessary expenses.

Read Also: How To Figure If Something is Worth Spending On

Not investing in Yourself

Many people overlook the importance of investing in themselves and their careers. They may think they don't have the time, money, or resources to do so, but this mindset can negatively affect finances.\

One of the main reasons people don't invest in themselves is that they prioritise long-term growth. They may be content with their current job and salary and don't see the value in investing in their professional development. However, failing to invest in yourself can lead to stagnation in your career and limit your earning potential.

Another reason people may not invest in themselves is fear. They may be afraid of failure or unsure of where to start. However, investing in yourself and your career can lead to greater job satisfaction and a higher salary, ultimately improving your financial stability.

You can invest in yourself by:

  1. Pursue further education or training in your field. This can enhance your skills and knowledge and make you more competitive in the job market. 
  2. Learning new skills that can help you create new income avenues
  3. Networking and building relationships with other professionals in your industry to open up new opportunities and get potential mentors who can help guide your career.

Read Also: 5 Lifestyle Changes to Make if You Want to Save Money


As a responsible individual, putting your money to good use is crucial. Not only does it help in achieving your short-term and long-term financial goals, but it also ensures a secure future.

There are numerous ways to put your money to use. First is by investing it. This will help you generate income and provide a safety net in case of any unexpected expenses. Second, you can save it. This is done by setting aside a certain amount from your monthly income towards a retirement fund or a child's education. This helps in achieving your future goals and ensures financial stability.

As you head into the new year, you must recognise all the financial mistakes you made this year and commit to avoiding them. This is the only way to ensure personal growth and take control of your finances.

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Farah Nurow is an experienced Content Writer who enjoys writing creative and educative articles meant to provoke readers' thoughts. He loves sunny weather and thick books. You can connect with him on LinkedIn.

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