Unexpected Financial Setbacks? 5 Mistakes That Could Derail Your Long-Term Goals—and How to Avoid Them

Life is full of surprises—some good, some not so much. When it comes to money, unexpected setbacks like car repairs, lost jobs, or health issues can throw even the best plans off course. But here’s some good news: by recognizing and steering clear of a few common mistakes, you can shield your future goals from getting derailed. Let’s explore the top five money missteps that trip up many people (often without them realizing)—and most importantly, how you can sidestep them starting today.

1. Forgetting to Budget and Save for Emergencies

One of the most frequent reasons folks run into trouble is simply not tracking where their money goes every month. Making and following a budget gives your money a “job,” so you’re less likely to overspend without realizing it. Even a simple spreadsheet or free app can help you see how much goes toward rent, groceries, streaming, and coffee runs. Without this map, it’s easy to spend more than you earn—and that means you could be caught off guard when the unexpected hits.

Another closely related mistake? Not having an emergency fund. Imagine your car breaks down or you have a surprise medical bill. If you don’t have money set aside, you might need to use a credit card, take out a loan, or dip into your retirement savings—each option can cost you a lot more over time. Many experts recommend saving at least three to six months’ worth of basic living expenses for emergencies. This may sound like a lot, but even stashing away $500 or $1,000 can provide a helpful buffer for smaller surprises.

“A budget isn’t just about restrictions—it’s about having choices for your future,” says personal finance educator Linda Cartwright. “And even small savings can mean the difference between a minor headache and a major setback.”

If you’re new to budgeting, don’t worry about making it perfect. Start by jotting down everything you spend for a month, then look for patterns or areas to trim. Challenge yourself to build up your emergency fund by automating small transfers into a separate savings account—out of sight, out of mind. The important thing is to begin somewhere—and keep going.

Next steps:

• Track your expenses for 30 days (apps like Mint or Goodbudget can help)
• Set a realistic target for your emergency savings—even $20/week adds up
• Review your budget monthly and adjust if things change

2. Relying Too Much on Credit Cards and Putting Off Retirement

Credit cards can be both handy and hazardous. On one hand, they’re great for emergencies. On the other, carrying balances from month to month means you’re paying extra in interest—sometimes 20% or more per year. That adds up quickly! Overusing credit also lowers your available limit, which can hurt your credit score and impact future loans.

Here’s another pitfall: waiting too long to save for retirement. It’s easy to believe you’ll have plenty of time to catch up later, but the magic of ‘compound interest’ works best when you start early—even with small amounts. Think of your retirement account like a snowball, getting bigger as it rolls downhill. The earlier you start, the bigger it can get, thanks to interest building on itself over decades.

According to a 2025 GoBankingRates survey, many older Americans regret not starting their savings sooner and wish they’d borrowed less during their working years.

If you do use credit cards, aim to pay them off in full each month. If you have existing balances, focus on paying more than the minimum payment. As for retirement, even if you don’t have a workplace 401(k), you can start an individual retirement account (IRA) and set up automatic contributions. Many banks and financial apps make this super simple and free to open.

Next steps:

• List all your credit cards, balances, and interest rates; prioritize paying off the highest-interest one first
• If your work offers a retirement plan, contribute enough to get any company match—it’s free money
• Open a Roth or Traditional IRA if you don’t have a retirement plan, even if you can only save a small amount each month

3. Letting Impulse Purchases and Lack of Planning Hurt Your Progress

It’s so easy to get caught up in the moment—especially with online shopping just a click away. Impulse buying happens when you purchase something without planning for it, whether it’s a sale, a late-night snack, or a new gadget you didn’t actually need. These little splurges might seem harmless, but over time, they can drain funds you could have used for emergencies, investments, or long-term goals. Practicing mindful spending—pausing before you buy—can save you hundreds (or thousands) of dollars each year.

One simple trick: try the “24-hour rule.” If you see something you want, give yourself a day to think it over. Chances are, you’ll realize you don’t need it—or find a better deal. Even better, use a wish-list app or keep a running note of things to purchase later, so you’re less tempted by ‘buy now’ buttons.

“Every purchase is a choice between something you want now and something you want later,” says money coach Darrell Jones. “It’s not about never having fun—it’s about having more control, so surprise bills don’t wreck your plans.”

Another area where impulse can bite: overlooking the right amount of insurance or forgetting about taxes. Not having health, auto, or renter’s insurance could mean a single accident wipes out years of savings. And if you work freelance or have a side hustle, remember that taxes aren’t always automatically withheld. Planning now avoids a scramble at tax time.

Next steps:

• Try the 24-hour or 48-hour pause before all non-essential purchases
• Review your insurance coverage annually—make sure it fits your life changes
• If you have extra income (freelance, gig work), set aside 25-30% for future tax bills

4. Overlooking Credit Health and Not Asking for Help

Your credit score is like a report card for your money habits. Lenders, landlords, and sometimes even employers may check it. Regularly reviewing your credit report helps you catch mistakes and spot possible fraud before it turns into a crisis. You can get a free credit report each year from all three major credit bureaus. Look for accounts you don’t recognize or errors in your payment history.

At the same time, many people feel embarrassed or unsure about asking for financial advice. That’s normal—money topics can be tricky! But not seeking professional help can mean missing out on strategies, savings, or benefits you don’t know exist. Financial counselors, non-profit advisors, or even trusted friends can offer new ways to save, pay down debt, or grow your savings—no judgment needed.

“You don’t have to solve everything alone,” says certified financial planner Maya Lee. “Asking questions early can help you avoid much bigger problems down the road.”

Debt management plans, credit counseling, or apps that help track and improve your score can all help. Even simple actions—like paying bills on time and keeping your balances low—go a long way. If you feel stuck, reach out! Free and low-cost advice is easier to find than ever online or in your community.

Next steps:

• Request your free annual credit report and check for errors
• Set up alerts to remind you of due dates or low balances
• If you’re unsure where to start, contact a non-profit credit counseling organization (like NFCC or local community help centers)