‘Shark Tank’s’ Kevin O’Leary Says These Are The 4 Dumbest Money Mistakes People Make

Kevin O’Leary of ABC’s Shark Tank is known for his love of money. Considering himself a very careful and shrewd investor, O’Leary doesn’t part with cash very easily.

The millionaire – also known as ‘Mr. Wonderful’ – can easily spot when money is mismanaged, from everyday transactions to embarking on business ventures. The financial guru lists these four particular mistakes in the ‘dumb’ category when it comes to spending.

Spending on ‘crap’ clothing you won’t wear (his words, not ours)

O’Leary sees many consumers buying apparel that they don’t need, which usually ends up at the bottom of a drawer. “Most people buy more crap than they use. This includes men and women alike, especially when it comes to clothes,” O’Leary told Entrepreneur. “They love the feeling of clothing shopping, but the truth is, if you actually look at your closet, you probably wear the same 20 percent 80 percent of the time, and the rest of the stuff you bought is wasted.”

Instead, Mr. Wonderful advises the fashion conscious to invest in high-quality clothing that will last, and wear them until they’re worn out. “If you’re going to buy clothing or fashion accessories, make it something really good that’s going to be timeless, that you’re going to spend a lot of money on and spend a lot of time thinking about, and that you’re actually going to use,” O’Leary said. “Save your money and put it toward quality items and be very selective. It’ll pay off in the long run.”

As viewers may notice with his Shark Tank wardrobe, O’Leary practices what he preaches. “I wear the same suit every day. I have 20 of them, so I don’t have to worry about my style anymore. I travel with four at a time and I burn them out. Then I throw them out or give them to charity,” he revealed.

Not knowing how much money you need each month

The Shark Tank star finds it unfathomable that many people have no idea how much money they need to cover their monthly expenses. “What I find so remarkable, and this includes very wealthy people I know, is nobody knows what they’re monthly nut is,” he said. “Whether you’re single, married, a single parent or otherwise, most people don’t know what it costs them to live every 30 days, and that’s living on the edge.”

Mr. Wonderful highly recommends a written budget to keep track of spending. “Write down everything. All of your habits of spending. All of your income. All of the extra ways you make money,” he said. “Capture it, down to the penny, over a 90-day period. Do it with pen and paper. You don’t even need a computer for this. Then do what needs doing — budget accordingly and stick to it.”

Spending more than you make

O’Leary witnesses people overspending on a regular basis. “Not knowing what’s coming in and what’s going out puts you at risk, in a state of never getting ahead,” he said, according to Entrepreneur. “Most often, you’ll find you’re spending more than what you’re bringing in.”

The millionaire investor says there’s only one solution – stop spending and bank your cash. “It’s simple and requires discipline: Spend less and save more,” O’Leary advises. “Adjust your lifestyle because overspending manifests itself usually in credit card debt, which is so expensive that it buries you.”

A monetary evil – accumulating credit card debt

Ah, the evil credit cards – an invitation to sky-high spending. Mr. Wonderful sees nothing wonderful about them. “A credit card is a horrible thing. Under no circumstances should you have one, let alone more than one, not unless you can fully pay them off each and every month. Even then I’d avoid them,” he warns.

The Shark Tank investor draws a hard line when it comes to those plastics. “Pay off your credit cards, then cut them up. You won’t regret it. It’s the best thing you can do to put yourself in a better financial position right now,” O’Leary recommends.

With a net worth of approximately $400 million, O’Leary apparently knows of what he speaks!