While wealthy people generally have a reputation for being good with money, even they are not immune to sometimes making poor decisions regarding their finances, writes Cameron Huddleston for GOBankingRates.

“I’ve documented some horrific money blunders some smart, wealthy individuals always seem to repeat,” said Tom Corley, author of Rich Habits and Change Your Habits, Change Your Life books.

Spending Habits

According to Corley, many millionaires pinch pennies on everyday costs and fees but then they splurge on expensive, emotional purchases, such as a boat, jewelry, or an extraordinarily expensive vacation.

Alternately, some wealthy people ignore the details and often end up wasting money. This includes not auditing their accounts for unnecessary fees or reviewing bills for overcharges.

Furthermore, many high-net-worth people do not track their spending, which leaves them with less money to invest or save than they expected. Even with a high income, you need to keep up with where your money is going.

A lot of rich individuals end up with credit card issues because they got into the habit of charging purchases when their cash was tied up in their businesses. It is essential to make a plan to pay down credit card debt as fast as possible.

Rich v. Wealthy

Fred Hubler, Chief Wealth Strategist for Creative Capital Wealth Management Group, which offers retainer-based advice and access to alternative investment strategies, noted the difference between being rich and being wealthy. “Rich,” according to Hubler, “can be temporary if you are not smart. Wealthy implies you know and follow the rules to get and keep your money.

“Living below your means is the best way to get rich and start to become wealthy. In my experience, wealthy and rich people just need a trustworthy team and I’d like to think that for our clients CCWMG is the glue that coordinates their team to keep them from making bad decisions,” he continued.

Sometimes wealthy people put most of their money into their own businesses or have their retirement funds invested into the company’s stock, which leaves their entire savings vulnerable if that company takes a hit. This risk can be lowered by diversifying your investments.

Many rich people do not start saving for a child’s college education because they assume they will use their income to cover those expenses. Ultimately, they lose out on the tax benefits of education savings accounts.

A growing wealth also means a more complicated financial life. People who attempt to continue to manage their own money can often make costly fiscal mistakes.

Read more about the biggest money mistakes in GOBankingRates.

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Want to know if you’re on the right path financially? CCWMG’S Second Opinion Service (SOS) is a no-obligation review with one of  Creative Capital Wealth Management Group‘s Wealth Strategists. 

It’s simply not possible to get a reliable second opinion from the same person who gave you the first one. Click here to schedule an SOS meeting with Fred and his team.

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