Stupid Ideas Can Ruin Your Financial Life
By David Wilding.
Stupid ideas come in all sorts of packages.
Bad debt, various loans, purchase decisions, and delayed savings. Most people
reach the age of 65 with little or no savings. They live off social security
and what little else they have. Is it any wonder the golden arches are filled
with workers in their golden years?
Anything that wastes your money or prevents
you from becoming debt free can be a stupid idea. The best way to save and
invest money does not include sending it to creditors each month. Only when
it’s yours to keep can you put it aside to work for you as hard as you
worked for it. |
It is not your job in
life to make your creditors rich. The goal is to make you rich. If you are
going to make that happen, stay away from bad decisions. Decisions, made
in the absence of good, or even any, information. Time pressured, desperate
decisions are seldom made with enough information.
Anything that slows down spending and requires
you to think twice before parting with your money is a good idea. Fill out
a Purchase Checklist for any decision that requires spending more than what
you find in your pocket. Look at these questions you need to answer:
Cost?
On sale?
Need or a want?
Can you pay cash?
Where will the money come from?
Do you know the cost of credit?
With that cost added in, is it still worth buying?
Could you justify this purchase to another person?
Would you accept these reasons from someone
else?
Stupid ideas abound when ignorance, greed and
pride, (definitely not the common sense triplets) form the basis of your
decisions. Ignorance is simply an absence of knowledge or information. Greed
is nothing other than wanting more than you should. Pride is caring what
your neighbor, or someone you don’t even know, thinks of you.
So, knowing there exists no winner in the contest
to see who is the most stupid, here are some things to avoid in your financial
life.
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Bad Debt. Any debt other
than a home mortgage, education loans and some business debt. Bad debt needs
to be avoided. If you have it, getting rid of it should be your number one
priority. Then get rid of your other debt. The more money you can put away
as opposed to sending to your creditors will make a dramatic difference in
your financial progress.
These particular types of bad debt need to be
avoided at all costs.
Auto title Loans
Payday Loans
Rent To Own Stores
125 Loans
Credit Cards
Pawn Brokers
If you find yourself even considering using
any of these, call a friend and have them talk you out of it.
Other bad ideas include some of our habits.
This is not moralizing here, just a hard look at how bad habits drain your
financial resources. Smoking, alcohol consumption, buying coffee and a donut
on the way to work, lunches at work, and anything else which has become a
habit can cost you a tremendous amount of money per month. Money you could
be putting away.
Make a fast calculation of what you spend each
day on these habits. Then times it by the number of working days in a month
(usually around 22). This is the money you waste each month. You need to
put it in your pocket, not in the pocket of someone else. And let’s
face it, you will feel better too.
There are plenty of people willing to benefit
from your stupid ideas and bad decisions. If you find you have already embraced
some of these stupid ideas, change your choices. Don’t double your mistake.
If you make a stupid decision, you don’t need to stick with it. Learn
from it and move on. Decide if you are going to have some burned fingers
or a ruined life. Live and learn from the burned fingers, let someone else
ruin their life.
(c) 2004 David Wilding
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About the Author
David Wilding has for the last ten years worked
with groups and individuals to help rid them of personal debt. Visit his
site http://www.debtattack.com for
other ideas to take care of your debt.
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