Poor financial decisions can set you back in life. Unfortunately, many financial decisions we make are influenced by peer pressure. A user asked an online forum, “What screams – I make poor financial choices?”
Read on as we list out the most common financial missteps people make.
DRIVING AN EXPENSIVE CAR THAT YOU CAN’T AFFORD TO FIX
“Driving a costly car with tons of body damage because all their money is going to their $800 a month car payment, and they can’t afford to fix the damage they caused with their bad driving.”
BUYING DESIGNER CLOTHES AND JEWELLERY FOR YOUR INFANT
“Listen. Some people are just that rich to do that.
The real kicker is if they can barely afford the same items that are the adult size for themselves.”
“My sister-in-law is loaded and bought our son Air Jordans at two months old. It was adorable but 100% functionally useless. Diapers or formula would have been preferred.”
TAKING A LOAN TO GO ON A VACATION
“A guy I know took a 25k loan on his house to go on vacation for a month with his family.
Said you only get to live once. The thing is, he went on vacation back to his birth country and wanted to live large so people think he’s successful.”
“My grandfather was a Greek immigrant, master chef. Built a restaurant up into something someone else would pay good money for, sold it to take my mom and her six brothers and sisters back to Greece to flaunt his wealth, returned to America with nothing, and did it again, three times.”
USING CHECK CASHING STORE OR PAYDAY ADVANCE
“Oh, this is 100%. As someone who has worked in financial services, I HATE these places and have no idea how they are legal. I always advocate that if you have a lower income or cannot seem to work up savings for whatever reason, try switching from a bank to a credit union for your banking needs. They may not be as large as banks or be as good if you need to travel, but they are local and try to help their local communities since they own them. A local Credit Union I worked for started to help its members by offering very low to no-interest short-term loans. This kept them from going into massive debt for some hiccups in their lives. So, if you have that car breakdown or a rent cheque due but need a couple of weeks, they’ll lend it to you at 1% or less. It helps keep members from spiraling into debt by going to those payday loan places.”
ALWAYS BORROWING MONEY
“I had a friend who constantly hit me up for $40 every other week. He paid me back every payday. One time I told him not to pay me back until he was sure he could go without asking for money. He was feeling guilty and two months later paid me back $50. A month later, he asked me for more money. I didn’t have extra, and I felt bad. Long story short, I haven’t talked to him in a few years.”
GOING INTO DEBT FOR A WEDDING
“My wife’s parents are well off (FIL is a partner at a huge law firm) but by no means wealthy.
They’d been putting money away forever for their only daughter’s wedding. They gifted us $50k and covered everything.
It was a beautiful, meaningful, and wonderful time.
I still wish we’d had a small event and bought a house instead.
I own my home, which is great, but I didn’t need the wedding, nor did my wife. It was all the relatives we were truly appeasing.
I love my in-laws like my parents and am grateful for what they have done for us; I’m not looking for a gift horse in the mouth or anything like that. I don’t see the reason to put money like that towards a wedding when it would have been much more helpful in practically any other way.”
HAVING MORE KIDS THAN YOU CAN AFFORD TO RAISE
“I once had a coworker whose husband was disabled. They had three kids in her income and his disability and were barely scraping by. She started talking about having another baby, and I said, “I thought you were having financial troubles, and your husband is getting worse?”
Her answer – Well, the state will offer more benefits, and if he dies, I’ll get even more benefits for the kids, so we’re not worried about money.”
MAKING PAYMENTS ON A TATTOO
“I met a woman on a dating app once with several tattoos. She had a low-income job, so I wondered how she could afford them. It turns out she was on a payment plan with the tattoo studio. I was like yeah, no thanks.”
CALLING YOURSELF AN ENTREPRENEUR WITH NOTHING TO SHOW
“Calling yourself entrepreneur but having nothing to show for it. These days it’s usually code for crypto and NFT Bros.”
“Nobody who’s an entrepreneur calls themself an entrepreneur. They say what their business does, like “I sell flooring,” “I’m an electrician,” or whatnot. And then it turns out they own the biggest flooring retailer in the tri-state area, and they’re worth tens of millions of dollars.”
ALWAYS HAVING THE LATEST IPHONE
“It’s insane how much new phones cost. I will probably have to replace my Note 20 in the next few months, and I’m already dreading it.”
PEOPLE WHO COLLECT TENNIS SHOES
“I’m sorry, bro, it isn’t dope or cool that you paid multiple hundreds of dollars, sometimes even going to thousands, for something that is made to slowly degrade as you wear them because they are made from cloth that isn’t nearly as durable as leather shoes of the same price. It goes double if you choose to penguin walk in your new shoes because you paid 800$ for them 2nd hand and can’t let them crease, so you can sell them 2nd hand in a few months when they are worth $730.”
BUYING LOTTERY TICKETS
“Regularly buying lottery tickets. You might as well flush your money down the toilet.”
BUYING BOTTLED WATER
“It costs more per gallon than gasoline, and most people have been told that city water is terrible even though many bottled water companies get it from municipal sources anyways. And if you care, filter it at home.”
OWNING EXPENSIVE HANDBAGS
“I know I’m in the minority here, but spending thousands of dollars on something to use as a status symbol is just so stupid. It doesn’t hold your phone and wallet better than a moderately priced bag. I have a friend that gets a new one every year but complains that “she’s broke” or “oops had to pay rent late again,” but she’s carrying around a Louis.”
BANKRUPTCY
“Nothing screams ‘poor financial choices’ like bankruptcy.”
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Anika Jindal
Anika is a CPA and founder of What Anika Says. She shares simple and actionable frugal living, money management and money-saving tips to live a debt-free financially independent life. She has been featured on popular websites like Bankrate, Forbes, Mint ,and Authority Magazine. Byline: MSN