Look, I get it – you feel like you’re in control of your finances and you think that you understand everything. You’re the king of the friggin’ world. Yeah, and I’m Donald Trump. Not. The fact is that we all do financially stupid things at one point or another; but if you do all seven of these things then you are indeed the king – the king of the financial fools.
Living Beyond Your Means
Hey, I get it – you want to keep up with the Joneses. Well good for you. You go and piss away your future just so you can have a shiny new car in the driveway and that nice big Jacuzzi in the back of your McMansion. Never mind that you’re up to your ears in debts – hey, I’ll pay it off later. No biggie – my credit is good.
Trust me, I love nice things too. I enjoy fine wine and I love wearing a Rolex and dressing in Armani. But I also know not to go overboard because if I do, I could end up like I did when I divorced my ex-wife – totally broke and dealing with a moronic divorce lawyer who only cared about trying to suck more money from me, but not about doing what I was paying him to do (i.e. deal with my insane wife).
But I digress. My ex-wife as regular readers here know loved to waste money. She was the queen of spending my money and she drove me to bankruptcy. Now I admit – I like nice things too; but I learned my lesson and I live within my means – I also try to get what I want at cheaper prices so I don’t go overboard.
Failing to Have an Emergency Fund
As the old saying goes – sh*t happens. It’s just a fact of life that something is going to happen to screw up your carefully laid plans. If you have extra money in the bank, you’ll be fine. If not, you’ll be fighting your wife about visiting the pawn shop to sell the family jewels. Do yourself a favor and even if it’s just a few hundred bucks, get yourself an emergency fund and build it up.
Giving in to Temptation
Okay, I admit it – I’m very often guilty of this one and I admit to being a financial fool at times. It’s especially true if I see a great deal on a great bottle of wine. Hey, I admit and all my friends know it too – I’m a wine snob. Yes, I can tell the difference between a cabernet sauvignon and a pinot noir and the pinot tastes like crap to me. I’ll also go ape when someone tells me about a nice cabernet franc because it’s one of my favorites.
Bottom line though, it’s okay to splurge once in a while but if you do it all the time, you are just asking for trouble. Don’t just buy something because it’s on sale. Buy it because you need it. Not sure you need it? Take five minutes before doing an impulse buy and let the moment pass. Then go ahead and do it. You’ll find that five minutes saves you big money.
Paying the Minimum on Your Credit Cards
Yeah – go ahead and charge up those cards baby! It’s plastic and you’re good to go. Oh the bill came, meh – I’ll just make the minimum payment. No biggie. Uh, yeah, it is a biggie. Oh boy it’s a biggie. Credit cards carry some of the highest interest rates around and you’re paying the minimum??? Tell you what – go and take out a $20 bill and burn it instead. It will be less painful than paying all that revolving interest.
I get that you can’t pay it all but pay as much as you can. Seriously people, don’t fall into the credit card trap.
Falling for a Scam
Okay, this one just falls into the just plain stupid category. Frankly, if you really do believe that some Nigerian prince wants to share millions of dollars with you then you deserve to lose every penny. I have zero sympathy for anyone that gullible.
But there are some scammers who are trickier – like an email that seems to be from PayPal or your bank. If they have links in the email, don’t click them. Go to the PayPal website and just open it directly. If it’s legit, your actual PayPal or bank link will show whatever it is they emailed you about.
Or, if you’re trying to be clever, hover your cursor over the link and make sure it’s really going to PayPal.com or your bank. Every so often, you get a fake email that looks legit but is really just a way to get your bank or PayPal password. Don’t fall for it and be a financial fool.
Posting Drunk or Wasted Pictures Online
Yeah, I know what you’re thinking – how the heck is that something financially stupid? Ever hear of a background check? Seriously people – banks have learned to check you out on social media. If you’re looking for a job, you can bet your new employer is Googling you. Think the bank is going to give you a mortgage if they find out that you spend every penny on coke and meth?
I get it – remembering passwords sucks. So it’s tempting to go with password or 1234 or even your birthday. Thing is, the thieves of the world aren’t stupid. Well, most aren’t – the stupid ones get caught. The smart ones learn to steal your money because you were too dam* lazy to come up with a real password and they managed to guess it.
Take the time to put together real passwords and even use second forms of ID. It sucks but it’s the world we live in.
Getting Rid of Every Luxury
Times are tight so it’s time to eat ramen noodles every night and forget about the Netflix account. Let’s just watch TV on a broken down POS which gets in two of the local broadcast channels. Hey, I get it – you’re trying to save money. Well good for you.
Thing is, we’re not built to deprive ourselves of everything. Give up everything you love to save money and at best you’ll be miserable and at worst, you’ll splurge and end spending even more than you would have, making your biggest financial fool in the world. Cut down sensibly and allow yourself to splurge once in a while. Just not all the time.