5 Money Mistakes I Saw Over and Over Again While Working in a Bank

There are things about money you can only learn if you have worked with it firsthand in a bank branch.

Things like, how the quietest, most ordinary-looking people you’d never pay attention to are often richer than you and everyone you know; how expensive clothing doesn’t mean financial stability; and, perhaps most surprisingly, how most people have no idea how much money they have in their accounts.

In my decade-long career as a consultant and bank office manager, I saw so many things, but the main takeaway is this: educated people can make money mistakes, make poor financial decisions and end up in a whirlwind of debt just as easily as anyone else. Unfortunately, money management and financial stability are never taught in schools so most of us end up with a diploma, a job, and no idea what to do with our first, second, or 30th salary.

So this post lists the five most common mistakes I saw people making over and over again, and trust me, nearly everyone around me has made at least one of them. I am certainly not here to judge, but I do want to highlight these financial decisions as real mistakes, because if you are making them, there are simple ways to break the cycle and get yourself out.

By avoiding these financial traps, you can absolutely set yourself up for success fast. Ready? Let’s go.

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Costly Money Mistakes I Saw Again and Again 

Money Mistake 1: People counting on their overdraft

There was one question I often asked my colleagues: What is the worst banking product ever? The answer was the same 90% of the time: the overdraft.

It is the biggest silent trap a bank can offer you. I despise it, and most of the people offering it to you don’t like it either.

Why?

People count on their overdrafts too much. They see them as a buffer, an extra pile of money that is “theirs” just because it’s sitting in their current account and is often linked to their monthly income.

But once you see your overdraft as a safety net you can count on, you’re basically halfway to spending it all. That product doesn’t have a monthly payment or an expiry date. The debt just stays there, the interest is relatively invisible (if you don’t check your bank account often enough), and you are in no rush to pay it off. In fact, I’ve seen people literally forget they even have an overdraft, and that is not okay.

The idea behind an overdraft is to have it just in case, use it once in a blue moon, and only apply for it if you have an emergency fund, good payment habits with credit cards, and actually don’t really need it (not joking here).

Money Mistake 2: Not saving ANYTHING because “tiny” savings make them feel bad about themselves

I’ve seen people close their saving accounts thousands of times. The face of disappointment is always the same, the heavy swallow of hopes that just got crushed.

Most people treat their savings account like a plant – it always needs attention and water, and if you don’t look after it for a period of time, it withers away.

But your savings account isn’t a living thing. It’s a virtual space that stays safe and well regardless of whether you pay attention to it or not. It can exist without a large amount of money flowing into it every month, and you can certainly leave it with just £20 for a few months.

The act of closing a savings account is like giving up on trying to save anything ever again. It encourages self-disappointment, carelessness, and low self-esteem. You literally feel like a failure while doing it, so why do it?

Saving small is my style of saving, and I swear by these three methods for building up a good chunk of money without noticing. And if life happens and I need to use it all up, that’s fine. I know it’s just a season, and I leave my account there, waiting for me to get back to it whenever I can.

Money Mistake 3: Maxing out the credit cards

Here’s a straightforward advice by someone with a financial background who doesn’t win (or lose) anything if you listen to it: If you have one credit card and you max it out, do not even think about getting a second one. If you need some help from the bank anyway, go for a simple loan, but stay away from additional credit cards.

You know very well that the idea behind having a credit card is to use it for online and in-store payments throughout the month and then pay it off in full by the end of the next month. That way you can use some nice discounts, travel insurance, medical insurance, and more goodies. Some online companies used to accept only credit cards. Also, a credit card is a good buffer for monthly payments and travel expenses.

It’s okay to have it “just in case”.

It is not okay to use it all up, then get another credit card, use that one all up, and keep going that way just because the monthly payments are convenient.

Firstly, if you only pay the minimum payment due on a credit card, a surprisingly large portion of that payment can go towards interest rather than reducing the debt itself. What’s left goes towards fees and charges, and only a small amount actually reduces the principal balance. You are paying a massive premium on top of the principal. The minimum payment due is designed by banks to look small and manageable, but it barely touches the principal.

From my experience, the people in the worst financial situation weren’t those with mortgages, but those with credit cards. The product itself isn’t bad, but the ways it is often used is.

Money Mistake 4: Getting a loan to go on a vacation or celebrate a holiday

One of the most common reasons people applied for loans was not an emergency, a medical expense, or a broken car. It was a holiday. And I know that because I’ve spent years asking people questions about their plans with the money they ask for. The statistics support this too: summer and the end-of-year holiday season are among the most popular times for taking out loans.

And while it’s hard to swallow your pride and admit you don’t have enough to meet relatively basic (and perfectly normal) wants (not needs), skipping a holiday for a year and making sentimental gifts for family and friends by hand for just a season could help tremendously improve your overall financial situation.

Spending money is easy, and I know that experiences are important, but getting on top of your finances while you can is actually one of the most grown-up decision most of us have had to take at some point in life.

Money Mistake 5: Not knowing how much they actually have in their accounts

This might be surprising to many people, but it is probably one of the clearest signs that you have an unhealthy relationship with money. When I was working in the bank, all of us (my colleagues and I) had that insanely annoying habit of checking our bank accounts all the time. It was just a matter of a few clicks, and when you’re bored, it’s the most natural thing to do.

But it is also the healthiest.

Knowing how much you have, at any given point of the day, makes you money-aware. You don’t just “have” money, you “know” what you can and cannot do with it. You know if you should be splurging on new things or whether lying low for a few days or a week would be the better option.

When someone asks me what’s the best money advice is that I can give them, I always surprise them by saying that checking their accounts multiple times a day is the absolute first step to building a money mindset and focusing on how to save, make more money, and spend what you already have more wisely.