Always do your due diligence
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Credit Card Troubles
She knew nothing about credit, so she allowed her friend to guide her into applying for back-to-back credit cards until she finally got approved.
Her next question was, “What do I do now?”
She had a new credit card and didn’t even know what to do with it. Hence, she ended up negatively affecting her credit because of late and missed payments due to a lack of knowledge and understanding of how credit cards work.
Though her friend didn’t have bad intentions, they also didn’t positively affect her financial situation.
They also failed to mention that you need to make payments on time or the late payments will be reported to the credit bureau; she also didn’t understand how credit utilization worked (i.e., keep your credit utilization within 30% or less).
Unnecessary Bumper-To-Bumper Insurance And Bad Investments
I also made a bad investment deal after signing up just because a person had faith in the deal. Since I had the money and trusted them, I decided to go for it. It didn’t end up horribly, but we lost money we didn’t have to lose.
There were a couple more financial mistakes after these, and I can’t promise myself I never will make more financial mistakes, but I can do more due diligence in the future.
Ignorance Can Cause Inertia
Have you ever made a poor financial decision? Maybe it was an investment, a credit card, a loan, a large purchase, etc., that you messed up on and didn’t do your due diligence on. Many people have because they don’t have the knowledge or financial experience.
The simple solution to avoid these situations is to educate and learn for yourself, but this isn’t always the initial reaction or next step for some people - especially when receiving advice from a trusted person. Why would a trusted family member, friend, or colleague try to lead you astray? I don’t believe people necessarily have malicious intentions; they just don’t always have all the facts themselves.
Why don’t more people educate themselves before making big financial decisions? Outside of trusting the person introducing the deal, it’s likely inertia! When you’re unfamiliar with a subject, you might fail to learn or understand where even to start, which can lead to inaction or allowing others to make decisions for you.
So many people sign up for financial advisors because they don’t know what to do with their own money. But people who give up power over their money often don’t understand and know what is happening with it, which displaces them to a disadvantaged position.
It took me a few times to finally learn that I have to take the time to gather context and details about certain purchases or investments before going all in. You can’t avoid all financial risks, but you can mitigate them with due diligence.
Most people follow the follower. “Hey, invest in this!” “Buy that!” “Put your money here!” “Apply for that credit card or loan!”
The Pause Principle: Where Financial Mistakes Get Prevented
A wise person asks, why, and what are the details? After they gather the details, they analyze them to ensure they align with their financial goals.
One of the most valuable financial skills you can develop is the ability to pause. Pause before signing. Pause before applying. Pause before transferring money. That space between impulse and action is where most mistakes are prevented. Financial decisions rarely need to be made immediately, even when they’re presented as urgent.
Another important shift is learning to separate confidence from competence. Someone can sound convincing, experienced, or well-intentioned and still be wrong. Confidence doesn’t equal accuracy. This is especially dangerous in financial matters because trust often replaces verification. A second opinion, independent research, or even a short delay can save years of regret.
Education isn’t about memorizing terms or becoming an expert overnight. It’s about understanding enough to ask better questions. When you understand how credit works, how interest compounds, and how risk functions, you regain control. You’re no longer reacting — you’re choosing.
It’s also worth recognizing that mistakes don’t define your financial future unless you repeat them. Many people get stuck in shame after making poor decisions and avoid engaging with their finances altogether. That avoidance is more damaging than the mistake itself. Ownership restores power. Awareness creates momentum.
Financial literacy compounds just like money. The first lesson feels small. The second builds clarity. Over time, patterns emerge. You stop making the same errors because you can see them coming. That’s when progress accelerates.
Ultimately, the goal isn’t to eliminate risk or rely on perfect information. It’s to become an active participant in your financial life. Ask questions. Read the fine print. Understand the downside before chasing the upside. When you take responsibility for your decisions, even imperfect ones, you move from reaction to intention.
Money rewards awareness. And the more aware you become, the harder it is to be led blindly into decisions that don’t serve you.
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This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.