Insider’s experts choose the best products and services to help make smart decisions with your money (here’s how). In some cases, we receive a commission from our partners, however, our opinions are our own. Terms apply to offers listed on this page. Being reactive instead of proactive in your finances can cost you money. It’s normal to have financial concerns, but making knee jerk decisions will do more harm than good. Get a jump on starting an emergency fund and earning extra income by having a financial plan. Loading Something is loading. Thanks for signing up! Access your favorite topics in a personalized feed while you’re on the go. Download the app I’ve worked as a personal finance journalist for eight years, and I think the No. 1 mistake people make when dealing with money is being reactive. Being financially reactive can cost you real money. It’s easy to hit the panic button whenever the topic of money arises. The solution: Be proactive. Start before you have to. It’s never too late to take control of how you handle your money and make it work for you for the rest of your life. During a time of economic or financial uncertainty, it’s normal to worry about what you should be doing with your money right now to ensure financial stability, but the steps that you take after you recognize that there may be a reason for concern about your financial situation is crucial. Here are a few signs you’re being reactive when handling your finances:1. There is a disconnect between your spending habits and your bank account Every dollar you make should get you closer to your financial goals. Saving is the foundation of any financial plan. There can be times, however, when your spending can leave your savings goals in the dust. When this happens, it can be easy to make a knee-jerk decision to cut all spending. Thinking that you will cut all spending for the next six months in order to make ends meet can set you up for failure. Typically, that level of restriction just doesn’t last and it can lead to overspending in the end. Tip: You cannot make up for lost time in saving. The best thing to do is to start where you are now and create — and stick — to a reasonable savings plan. That is more sustainable and will give you the desired results over time. See Insider’s picks for the best high-yield savings accounts »2. You don’t have a safety net More and more consumers are living paycheck to paycheck. When you don’t have an emergency fund, one job loss or medical issue could totally upend your life. And an unexpected financial obstacle would not only negatively impact you, but it could also affect your loved ones. The wrong reaction here is to think that there is nothing you can do, or that if you don’t have $10,000 right now to fund an emergency account, nothing else will help. Tip: Start building your emergency fund now. Consistent saving will get you to the goal of six months worth of living expenses. This will take time and effort to accomplish, but the peace of mind and confidence that an emergency fund gives you will be well worth it. You’re neglecting home and physical maintenance needs ‘to save money’ Healthy check ups, maintaining and updating home appliances, and keeping everything in good repair are all a part of maintenance tasks that need to be performed to avoid expensive financial ramifications. However, when facing money challenges, maintenance tasks are usually one of the first items people cut from their budgets. This can often lead to disaster when something breaks down and needs total replacement, which can lead to spending money you are not prepared to spend. You might take out a high interest loan or put the purchase on a credit card, both of which are debt that now needs to be repaid. Tip: Instead of avoiding the costs of maintenance altogether, try to take on as many of those tasks yourself as you can, within reason, to save money, or look for less expensive services. For example, dental schools often offer free dental cleanings, there are ways to get free medical screenings, and staying ahead of necessary car and home appliance maintenance will give you time to shop around for the best price for replacement or repair. 4. You have a single source of income With the lingering uncertainty of the economy and more layoffs, there is an increased interest in developing multiple streams of income and for many it has become necessary to have a side hustle. The worst thing to do is to wait until you need extra money or have experienced a job loss, then think about building multiple streams of income. Waiting to think about finding other sources of income after you lose your job is being reactive, and will put you in a position where time is not on your side. Tip: Being proactive is creating another stream of income now — even if it’s small. You will be more financially secure and ready to respond effectively to any financial situation that comes your way. When handling your money and thinking about the future, being proactive rather than reactive can save you money and help you be more financially secure. Jennifer Streaks Senior Personal Finance Reporter and Spokesperson Jennifer is a Senior Personal Finance Reporter and Spokesperson for the Personal Finance vertical at Business Insider. She started her career covering personal finance at Black Enterprise Magazine, went on to CNBC where she covered personal finance, women and money and tech and then Forbes, where she reported on personal finance, business, tech and money matters related to the economy, investing , credit and entrepreneurship. Jennifer is also the author of Thrive!…Affordably: Your Month to Month Guide to living your Best Life without breaking the bank. The book offers advice, tips and financial management lessons geared towards helping the reader highlight strengths, identify missteps and take control of their finances. In addition, she has extensive experience as an on-air financial commentator and has been a featured expert discussing credit and savings, investing and retirement, mortgages and all things money and personal finance. She has an ability to discuss and simplify complex financial issues and make them easier to understand. Follow her on Twitter @jstreaks. Read more Read less