7 ways to commit financial suicide
These common mistakes make it difficult to set aside money for emergencies and save for a comfortable retirement.
This post comes from Len Penzo at partner blog Len Penzo dot Com.
Of course, one of the most popular attractions in San Francisco is the beautiful Golden Gate Bridge. It's absolutely breathtaking to behold in all its majesty.
The gorgeous span is also an extremely popular suicide location; more than 1,300 people have jumped off the Golden Gate Bridge since it was completed in 1937.
While most people would never consider committing physical self-destruction, more than a few folks unwittingly choose to commit financial suicide every day.
How so? Here are seven of the most popular methods:
Having children too early
There is nothing more destructive to one's financial future than bringing children into the world without having an established and stable means to support them. Raising children requires a tremendous investment, not only of money, but of time as well. Unfortunately, when those resources are in short supply, it becomes extremely difficult to start a business or gain the necessary experience, on-the-job training and/or education required for the type of career advancement opportunities that lead to significantly increased earning power.
Abusing credit cards
There are thousands upon thousands of careless people who have been driven to financial ruin by burying themselves under a mountain of debt via credit card abuse. In most cases, it's because they lacked the financial acumen and discipline to understand that credit cards must be treated with respect and used responsibly.
Maintaining financial dependency on others
We are constantly being admonished by officials to avoid feeding bears, squirrels and other wildlife in order to prevent them from eventually becoming dependent on handouts. For the exact same reason, I'm absolutely convinced that the longer we stay dependent on government assistance or friends and family for financial support, the tougher it becomes for us humans to achieve financial independence.
Failing to accurately track income and expenses
Trying to get a handle on your personal finances without knowing how much money you are earning and where it is all going is tantamount to trying to drive while blindfolded. People who fail to take the time to analyze their finances typically end up crashing and burning because they lack a means of ensuring they get the most from their income. As a result, they end up succumbing to a severe case of lifestyle inflation.
Setting down roots in the wrong location
Whether you realize it or not, one of the most critical financial decisions you'll ever make is where to live. True, sometimes we have little choice in the matter. However, it's important to keep in mind that choosing to live in a high-cost-of-living locale without the income to support such a lifestyle makes it extremely difficult not only to make ends meet, but also to accumulate wealth over the long haul.
Failing to establish a plan for the future
The young always seem to have more time than money, which is why financially important things like putting aside money for short- and longer-term emergencies -- or feathering a retirement nest egg -- often are never even considered until people approach their golden years. Of course, by then, it's usually much too late. The old bromide really is true: Failing to plan is the same thing as planning to fail.
Marrying the wrong person
Choosing a spouse is another epic decision with major implications. Remember: Marriage is a financial contract. As such, it can be a financially dangerous proposition. There are countless responsible people who ended up bankrupt becasue of the antics of a financially undisciplined spouse. And those who eventually recognize their matrimonial mistake after saying "I do," still often end up paying dearly. The average cost of a divorce is about $20,000, which just goes to show that the people who prosper from a divorce are usually the lawyers.
More from Len Penzo dot Com and MSN Money:
My husband and I married at age 21 and had our first child at age 22 and second at 24. I was a stay at home mom until my youngest was in first grade. I then got a job as a teacher's aide, so I could be on the same schedule as our children. Money was extremely tight, but, we learned to economize. It became a long lasting habit. Our family took frugal, but fun camping/hiking vacations, played chess and Monopoly and took advantage of borrowing books and movies from our library. We made our meals at home, with the occasional dinner out. We were involved in church and school activities. Our children got financial aid and merit scholarships to pay for college, in addition to small student loans. My husband got promoted in his company several times over the past 35 years. He went from making $16,000. in 1977 to $110,000 in 2012. We are still frugal, but have a good life. Our children are on their own, with good jobs. Now here is the point of my story: we have friends and relatives, like us in their late 50's. They either had children late in life, or not at all. They took expensive vacations, bought new cars, lots of clothes and lavish homes. They ate out often. Since the economy tanked in 2008, they have been struggling to get by financially. They never learned to economize when they were younger, because they didn't feel they had to. They got into the habit of spending money freely and sometimes foolishly. Now, they are under water on mortgages for houses that they can't afford, steeped in credit card debt and stating that they can't afford to retire. So, having children young is not necessarily financial suicide....but, not learning frugality when young, certainly can be.
Most of the time when you marry young you don't know who you are married to until they turn 28. I got married young also and my first wife was a lie, steal and cheat type. It takes two to be married and one cannot make it work alone. I paid child support on two children and raise a third a lone without any support from the mother. The judges were not kind to men in my day. You can work your way out financially but it does mean not much spare time. The wrong mate male or female is a big step backwards financially. How can you save or gain when you can't trust the one your with? Most must learn that it's not what you want but what you don't want in the other person that makes a successful marriage.
YES People...listen to this article and BE RESPONSIBLE FINANCIALLY...follow the example set forth by the American Financial industries where the experts know....you know, Banks, Wall Street Financial whiz's (ala Bernie Madoff, a clown deemed brilliant for 20+ years by the pundits), Congress, the Federal Reserve, Mortgage Houses et al.
In contra to this article, here are the top ways you can commit "character suicide:"
You place your personal finances above everyone else
You commit security fraud
You take a huge corporate bonus at the tax payers expense
You act like a miser and deny and begrudge charity to those less fortunate
You don't work a day in your life and complain about having to pay your employees a living wage and giving them benefits.
You refuse to enter into a committed relationship because you only want to spend your money for your own personal benefit.
All of us should place more value on moral character and less on financial character
I suggest you learn about Dave Ramsey. If you like what you see, it is easy enough to follow his advice. Basically he says track your money, don't spend more than you make, avoid debt and be an equal partner with you spouse on all financial matters. I'm not 100% on board but I'm trying. I'm close to being totally out of debt and I swear I will never go back. And on top of that, my life is the best it's ever been.
The article is right on target, but what isn't is many decisions of major importance are made when a person is very young. The point being that maturity usually comes with age.
Anyway, why do any of you fools think the rest of us want to hear about your personal lives? Just a couple of sentences from any of you on any topic clearly indicates what a pack of losers you are.
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