Americans are making smarter financial choices, but still lose an average of $948 a year due to money mistakes. In 2025, these errors cost a total of $246 billion nationwide. The amount lost has decreased and was lowest in 2025 compared to the past seven years.

The most expensive financial mistake for Americans is racking up credit card interest and fees, totaling $120 billion in 2022. Credit card balances reached $1.23 trillion in the third quarter of 2025. Carrying a balance can lead to inflated costs, especially for borrowers with lower credit scores.

Overdraft protection fees can be costly, with a median fee of $34 for overdrawing a debit card. Consumers spend around $17 billion on overdraft and non-sufficient funds fees. Monitoring account balances and setting low-balance alerts can help avoid these fees.

Many Americans are spending on luxury goods they don’t need, contributing to the $115.22 billion U.S. luxury goods market. Experts suggest using fun money for high-ticket discretionary spending to avoid accumulating debt. Opting out of overdraft protection can also prevent unnecessary fees.

Financial literacy is crucial in avoiding costly mistakes. By staying informed and making informed decisions, individuals can protect their finances and avoid unnecessary losses. Subscribe to Moneywise for weekly insights and exclusive interviews for clear financial guidance.

Read more at Yahoo Finance.: Americans lost an average of almost $1,000 to financial errors in 2025. 3 big money mistakes to leave behind this year