Worst Personal Finance Mistake

By Gene Khalyapin - Published on

My grandpa once gave me the most important piece of advice on personal finance:

“You are young - save as much as you can. Cut your spending to a minimum, cut life activities - and save it all”.

My grandpa was wrong.

No, “save as much as you can” is not wrong and may be a decent advice for some. He was wrong in making me focus on MONEY vs. LIFE.

#1 Mistake: Prioritize Finances over Life

Don’t do this one! Personal finance is just a tool that helps you live the life that you want. 

Your life comes first. Always! Your life priorities come first. Once you settle on that - you can think about personal finance and how it can allow you to live the life that you planned.

Don’t: Don’t mold your Life around your finances.

  • Don’t miss the important life events - the events that you will never get later, no matter how wealthy you become.
  • Don’t miss that very important fishing trip with your little son just to save an extra $100 - you’ll never get this time back!

Understand what’s important for you in Your Life and only than think about the ways how finances can help you get that. Money is not a goal in itself - it’s a tool that helps you live a fulfilling Life.

The worst personal finance mistake is missing on the important things in Your Life!

Brian's Story: the man who traded his Time for Money.

By Gene Khalyapin - Published on April

When Brian was 25 he decided to do 'what's right' and save $2K for retirement, instead of taking a backpacking trip across Europe - something that he had dreamed about since he was a kid. His family assured him that saving the money was a very 'mature' and 'responsible' thing to do: after all he was just out of college and didn't have much money. Plus, with the compound interest, "the earlier you save - the more you will have later".

Other 'responsible' decisions followed the successful first one, and Brian continued to save money.

He took special pride in knowing how many 'wasteful' activities he could cut: travel, going out with friends...

His retirement savings started to grow even faster when he decided to put 'wasteful' leisure time to good use and get a second job instead.

Fast forward 50 years. That $2K that he did not spend on backpacking trip in Europe grew at about 5% to become $20k. $2K became $20K! Amazing, right?

Not so for Brian.

He hardly walks now. He has more money than he cares about spending and he regrets his decision to forgo so many things in life.

Now he would have given up much more than $20K if he could make younger self take that trip. Yes, that would look like an irresponsible decision for some, but it would be the right one for him - it would be his decision based on what's important for him in his life.


But Brian can't go back in Time. None of us can. Brian made a mistake and wasted his Time and he'll never get it back.

Spending everything today is not ideal either.

The best approach is to understand what's important for you in life and not to miss it.

Find the right balance unique for you personally. And before you follow somebody's advice - remember: it's Your life and you are the one who will be living with the consequences of your decisions.