1o Things you are doing to WRECK your finances!
We all want to have enough money to live the life we dream about. We see our friends and neighbors living this big life and we feel like we deserve that big life as well! It’s hard to see the people around you going to dinner, going shopping, buying new cars and living in fancy houses! I know it’s hard. It can be frustrating and bring you down when you don’t live like that.
The truth is, they are probably living a life that they can’t afford!
But, for the rest of us, we see their great life and feel envious!
We want that life!
But at what cost…?
The plain fact is that most people live with a tremendous amount of debt. Somehow having debt is a “good thing” in our society, just look at all of the cheap car financing! Zero down, $199 per month and you drive away with a brand new car. But that’s all we hear because it’s so APPEALING, we forget that we can only drive so many miles, and we have to return it in 36 months because it’s a LEASE. But… the car is so pretty, …. and its smells new…..and I deserve it right?
We kid ourselves into thinking we can live a certain way, but our checkbook and those poor credit cards of ours can’t foot the bill (for long anyway).
Do you want to live without the worry of debt and bill collectors? I know I do…
I want you to build a successful future, I’m not going to mince words here. I am going to tell you exactly how you are messing up your financial life.
If you are looking for someone to pat you on the back, and tell you it’s going to be OK, STOP READING NOW!
Here are the Top 10 ways most people totally trash their finances and rob themselves of options and future possibilities, because living under water takes away your choices….
Spending more than you make (AKA Living BEYOND your MEANS)
Having a credit card in our wallet is probably the worst thing that has ever happened to American families. A credit card gives you a sense of security that you can buy anything you need or want. We don’t see the amount we owe flashing in big bright numbers on the front of our card (although I would suggest that it did). A credit card is the biggest enabler to overspending that we have. It’s super easy to swipe the card, and before you know it, you’ve spent more than you can afford.
You have just spent more than you make!
I have 2 suggestions to keep your daily spending in check (no pun intended)
*Use cash and leave your credit card at home! Plan out expenditures before you leave home, and take just enough cash to cover it. It’s not hard to plan, it just takes a little time! Challenge yourself to see how much you can buy, and or save given the amount of money you brought. Make it a game, have fun with saving!
*If you insist on using the credit card for “miles” or “perks” or whatever you accumulate, then pay off your credit card each day! YOU HEARD ME RIGHT! Pay off the amount you just charged as soon as you get home! You will very quickly see how your bank account is dropping, and hopefully you will curb your “spendy” ways. If your bank limits your monthly transactions, then pay off your card EACH WEEK! If you wait until the end of the month, that big credit card bill is going to slap you in the backside, and it’s gonna hurt.
It’s gonna hurt real bad!
You don’t pay your credit cards off each month.
When you continue to build up credit debt on your credit cards, you put yourself and your family at risk. Interest accrues as soon as you make a charge and it starts piling up if you don’t pay off your statement in full. Month after month this interest starts to snowball and it gets harder and harder to pay it off. I understand that there are times in our life where we HAVE to use our credit card to cover an emergency and are unable to pay it off that month. But that should be the EXCEPTION, NOT the norm.
Chances are very good you are living beyond your means if you can’t pay your card off each month!
You need a budget, you need a plan, and you need it NOW! It only gets worse if you ignore the inevitable!
You keep buying new cars every 3-5 years.
Constantly having a car payment during your adult life can lead to hundreds of thousands of wasted dollars, maybe even more!
Dave Ramsey gives an example of having a $300 something dollar a month car payment your entire life means you spent close to 4 MILLION DOLLARS! Holy Crap! And we wonder why our retirement accounts are undernourished and scrawny! What if you had that 4 MILLION DOLLARS in your retirement and savings account? Well, you’d be enjoying life as the rest of use sweat over our delinquent credit card bills, and that’s the ugly/pretty truth depending on which side of the equation you are on.
You live in a Big Ass House with a Big Ass Mortgage to go along with it!
This is what it means to be house poor, but really you are choice poor. When you are constantly having to cover a mortgage payment that takes most of your paycheck, you lose so many other opportunities to enjoy life. Your friends invite you to go away for the weekend, you have to say no because you have no money after you pay the mortgage. You want to get that new large screen TV so you can watch fall football in high definition, well nope, can’t afford that either! Forget about paying for your child’s field trip to New York with their orchestra class, you’ll all be staying home! Maybe their friend could send your child pictures of the trip? “It will be just like you were there honey”, or so you tell your child.
When your mortgage broker gives you the “maximum” amount you can spend, why do you NOT hear maximum? We tend to get the biggest house we can squeeze into or budget. Better advice is buy a smaller house, with a smaller mortgage that you can pay off in 10-15 years. Think how envious those neighbors will be of you then. Imagine, no house payment! That should make you feel all warm and fuzzy all over! That’s exciting!
We all have our favorite treats, but a $6.50 cup of coffee on the way to work each day adds up to $150-$165 dollars PER MONTH! If you do that for a whole year you’ve spent about $1,700 dollars per year. That’s a LOT of money folks! Add a pack of cigarettes or a drive-through meal and you have spent the equivalent of what you would make with a part-time job. I don’t know about you, but having an extra $3K-$4K per year would make a nice “donation” in my savings account…
Just saying folks! Those little habits can break your monthly budget and wreck your financial choices.
- Pricey Gym Memberships
Did you know that most Americans pay for some type of pricey gym/fitness club membership each month? Did you also know that MANY DON’T EVEN GO, THEY JUST PAY?
High Cable Bills
I don’t know about you, but I love the convenience of turning on my TV and being able to watch anything I want, any time I want.
I LOVE binge watching Game of Thrones and Billions! Woot! They are awesome shows….
I like being able to flip through 241 channels 24/7 to find a show to hold my interest, even at 3 am when I should be sleeping (or writing), or anything else productive, sigh.
BUT, these conveniences come at a cost!
Do I really need all of those shows?!?! The answer is NO, I do NOT need all of those shows.
We took a look at our cable bill and we were shocked at how much we were paying for the convenience of our service. When we originally signed up, we got a great rate of the $99 bundle for TV, phone and internet.
That was a fair price, but we were shocked to see the fees after the “initial period” wore off. We went from $100, to $175 dollars, to $250 dollars a MONTH within 2 years. This is as much as a CAR PAYMENT!
We knew it was time to CUT THE CORD!
It’s hard, and it’s scary, and it’s worth it!!!
There are many ways to get around those high costs. You are still going to need internet service for most of these, but you will see not all of them.
Here are a few of our favorites:
- Amazon Prime:
The other night my husband and I went out for a quick bite at our local sushi restaurant for date night. We each ordered a drink, a salad and we split a few sushi rolls (3 to be exact). It was just the 2 of us since kids were home and we thought it wouldn’t be that bad.
WELL WE WERE WRONG!
It was $70 with tip!
Don’t get me wrong, the food was good, we had a fun time and we were able to escape for a little bit. BUT, on the way home all I could think about was how that $75 was equal to HALF OF OUR WEEKLY GROCERY BILL.
Eating out costs more than eating at home. PERIOD!
It’s not always as quick, and it isn’t as glamourous, but it’s budget friendly and usually a lot healthier.
We make weekly meal plans at our house. It is the only way we can resist eating out AND control our grocery bill at the same time. We have found that making a grocery list ahead of time saves us lots of time and MONEY! Even better, the order ahead curbside service saves us even more. If we go in the store we are always tempted to buy something else. Those little “something else” purchases can really add up over time.
Make a home meal plan, stick to your shopping list and enjoy family meals at home, your budget will thank you!
Not Paying Yourself FIRST
You can get a loan for a car, a house, an education, and just about anything else you purchase, but no one will be there to help you when it is time to retire. In fact, most people don’t get to have that retirement they dreamed about their whole life. They just don’t have the money.
It’s a sad, but true, reality…
So what do you need to do? Put money away for your future. NO ONE ELSE WILL DO IT FOR YOU!!
Do you want to still be working when you’re 80 years old? I know I don’t!
Pay your mortgage first (hopefully you are smart enough to NOT have a car payment) and then pay your savings and investment accounts. The best way I have found is to have it automatically withdrawn or use direct deposit. Once it is in your account, you are VERY likely to see it as spending money.
IT’S NOT! It’s your future…
Don’t loan friends or family money (you’ll never get it back and usually it ruins relationships), don’t buy a new car because you want it (boo hoo), and don’t blow it on gadgets and junk. SAVE YOUR MONEY!
Unless you want to work your ENTIRE LIFE! Come on, this isn’t rocket science! It feels painful now, but it will be pure pleasure later on when you are reading the paper and drinking coffee (AT HOME) while your neighbor drives off to work.
A bit of commitment now, means you can have that future you dreamed about (if you save your pennies)
Not Taking Advantage of Matching Contributions
Speaking if paying yourself, I am shocked and a bit angry when I hear people tell me their company matches contributions to their retirement account but they can’t afford to contribute to it.
I want to smack them in the head and ask “Are you DUMB?”
This is FREE money. This is FREE money that you get to keep. This is FREE money that will earn interest for your future!
Usually companies only match a few percent of your income, I get that, but it’s still free money folks.
Do the math with me…
Imagine your company matches 3% of you salary if you contribute 3%.
That’s 6% of your income, EACH YEAR, making interest and compounding!
Multiply that by 40-50 years of working and you’re suddenly talking about a small fortune! GEEZ!
What are you waiting for???
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