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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.
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 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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Some other articles by David Wilding | |
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