CCPA: The Top 3 Ways to Lose Money
As accountants, we’re privy to client financial decisions by the baker’s dozen, the score, the peck, the boatload, the (insert ever increasing weird units of measurement), and many of these are great choices that we’re proud of our clients for making. It feels great when we work with our clients and they heed good advice and succeed.
Then there are the other kinds of decisions. The head scratchers, the facepalm moments, the ones that inspire expletive laden ‘wtaf’ responses. Those are the ones that keep me up at night. They’re so frustrating because they’re so avoidable: most of the time they just come from fearful, quick decisions made without consulting the accountants to look for better options.
Heading into 2026, one of my goals is to help Harmony clients avoid these financial traps, so here are my Top 3 Ways to Burn Money Without Even Realizing It.
#1 - Instant Deposits
Want to pay 2,272% interest on a loan? Take the instant deposit option from your POS system, your Venmo, or your Paypal!
Look, it sounds reasonable, right? Pay a small fee of 1.75% and you can have access to your money today instead of waiting two days, right? You need the money now and it’s a small price to pay to improve cash flow velocity… right?
Wrong. A 1.75% charge for a 2 day loan period equates to an APR of 319.38% or an Effective Annual Rate of 2,272%. And it rarely happens just once - once you get on the Instant Deposit train, you rarely get off. It’s a weird addiction - like having that money in the bank two days earlier is going to actually change anything. It’s the same cash flow, minus additional bank charges, and they add up: a $2,000,000 business doing instant deposits daily will burn $35,000 a year to have that quick fix.
How You Can Stop: Just say no. Pretend the quick fix isn’t an option and do one of the following instead:
Delay other payables a few days - almost all vendors will be reasonable if you let them know a payment is on the way. Just have a conversation with them.
Fix the underlying issues - if you’re finding yourself hard up regularly, there’s something awry with your business. Work with Harmony to find out what it is and then make the choices to fix your business. Cut labor, renegotiate rent, address your cost of goods sold, raise prices, invest in marketing.
Take an actual loan - if you’re willing to pay a major corporation 2,272% interest on a loan, why not find a friend or family member and take the same loan amount (remember, you’re only borrowing 2 days worth of cash flow) with 50 or 100% interest over a year while you fix underlying issues. Or borrow from a credit card loan - you won’t often hear accountants tell you to do this - but 29% interest is a heck of a lot better than 319% interest.
#2 - Merchant Cash Advances
We hate these so much, we wrote our very first Lessons from the Line about them. MCAs are predatory lending at its very best.
These always sound somewhat reasonable at times of crisis, just like instant deposits. Borrow $90,000 now and repay $119,700 with daily deductions from your credit card receipts. It’s expensive money, but $29,700 to borrow $90,000 sounds like 33%, so it’s kind of like a credit card, right?
Wrong.
Since you’re paying back the principal daily and these are always targeted to be repaid in a year, at most, these loans are extremely expensive. You’re paying $29,700 in fixed fees to use an average of half of the borrowed amount, so your actual APR on the working capital is usually in excess of 70%. That’s extremely expensive for a relatively short term fix, and once you’re on the MCA hamster wheel, it’s awfully hard to get off. It can work to bridge a short gap during a transition to profitability, but it’s a terrible source for long term working capital.
How You Can Stop: Shake off the cobwebs and find better sources of money.
Take an actual loan - If you’re willing to pay a major corporation 70%+ interest to borrow money without any flexibility, use your personal network to find a better solution. Someone you know is willing to lend you the same money with actual 30% interest over a several year period, and you can work out terms that make sense, like interest only for the first year, then amortization over two years, for example.
Fix the underlying issues - If you’re considering taking an MCA, you’d better believe in yourself and be ready to make hard decisions. Something is ‘off’ in your business structure - it could be that you opened your business without enough working capital and you just need time to earn enough money to have cash to run it with, and that’s a good situation. If you’re losing money, however, work with Harmony to find out what it is and then make the choices to fix your business.
Sell equity - people have an aversion to working this hard to give up part of their business, but sometimes the best way forward is to bring on investors. You just have to be willing to give them an attractive deal. Owning 50% of a business that’s consistently profitable is better than owning 100% of a business that pays all of its profits to merchant advance companies. Or, again, seek the personal loan option and pay high interest with terms that work for you. We can help you craft this offering.
#3 - Don’t Max Out the Matching on Your 401k
We see this all the time on the individual level when people set their retirement contributions around their short term budgets, instead of setting short term budgets around retirement contributions.
Look, I’m not here today to give investment advice (I leave that to our talented friends at Harmony Wealth Advisors), but I know one thing: an employer match is free money. Don’t leave it on the table.
Max out your 401k to the match point, no matter what. That’s an automatic 100% return on investment. You may not want to put too much money into the market, and you may have other uses of funds, but employers are obligated to match some portion of your salary deferrals and you should max this out. If your employer matches 3% of your salary deferrals, set aside at least 3%. If they match 4-5% of your salary, set aside that amount of money. It’s a guaranteed 100% return on your investment, even if you just put it into a money market account or default savings account in your retirement plan. You don’t have to invest it, but you’d be crazy not to get that match.
“But Matt, I don’t have room in my budget to save 5% for retirement. Life is expensive!” I get it. I know. My Pumpkin Spice Latte addiction is bankrupting me now that they’re like nine f*ng dollars per drink, and I gave up on breakfast when eggs hit $7 a dozen. Inflation is real. But what’s more expensive than life in 2025 is throwing away your own money. Your employer *has* to give you those matching funds, but you have to make it happen.
What You Can Do: Reset your deferrals to max out your employer match. Reach out to HR and make the change, or get ready to do it when you have the next annual deferral change. And use this reminder as the catalyst for a financial health checkup.
Do a personal financial statement - you should do one of these each year for yourself. Treat it like an annual physical: see where you are, take an honest assessment, and then start goal setting for where you want to be.
Set a budget - Calculate how much you can get matched from your employer and what you have to defer to make that happen. Then work backwards into a personal familial budget. Just make sure you get your match.
Understand your vesting - Every retirement plan is different. If you own your match right away, like in a lot of plans, you could even distribute the deferrals and match each year to yourself (I wouldn’t recommend it!) and you’d still end up better off after the penalty for early distributions.
#4 - Bonus Mistake: Not Working With Experts Like Harmony
Think you’ve got everything under control? Maybe you do, but we bet we can help your money work for you better, even if you’re not falling into any of the traps above. Just click below to start the conversation if you don’t already work with us.