I know people love lists like this, so I thought I’d
copy promote my friend Len Penzo’s 10 financial no-nos he recently blogged about. Along with my own thoughts on his list here, especially since I don’t agree with them all the way :) Maybe my “doo-doo” bar is a bit more conservative, though?
Check them out and let me know what you think… Here were Len’s top 10 signs you’re headed towards financial ruin, followed by my own 5 to boot:
- You have revolving balances on your credit cards. Len says this is a major breakage of the 10 commandments of money, but I see it as maybe a semi-break. It’s def. not ideal, but I’d be more concerned with the *amount* we’re talking about here. $200 vs $20,000 is a huge difference!
- You rely on payday loans to cover your bills each month. YUCK!!
- You’ve been turned down for a consolidation loan. Probably here too, but there are many reasons you’d be turned down outside of just financial concerns… Shoot, I can’t even consolidate my own mortgage loans!
- You’re hiding your spending behavior from family members. This is one of the most scariest ones here :( Mainly because it means you’re probably not ASKING FOR HELP either and thus not working on resolving your problems… Unless you’re one of those who keeps your personal lives completely separate – which of course is fine too – but again only if you’re aware of how bad the situation is and you’re working on fixing it!
- You finance your vehicle for more than five years. Is that really that bad?? Haha… You waste more money in the end, but financial ruin?
- You get more than one late notice per year. That sucks, but even 2 or 3 is understandable in my view. Not ideal, but not horrible.
- You get more than one bounced check per year. Thoughts are the same here, and I’d one up it and ask WHY YOU’RE USING CHECKS STILL?? Haha… This could easily be more avoidable going electronic and/or setting up auto bill pays :) Depends on how comfortable you are with all that though… maybe the missed fees doesn’t make it worth it?
- You need a co-signer to get a loan. This tells me that you’re probably younger and don’t have much credit to your name yet, as Len also points out in his article. If the reasons for this is poor management of your money, then yeah – of course it’s bad.
- You find yourself borrowing from your family and friends. I have a love/hate relationship with this :) I always do my best to not borrow or loan out money to friends and family, but there always seems to be exceptions I find, haha… 90% of them work out just fine, but you are always concerned with ruined relationships/etc. So probably best to avoid altogether if you can. The more important question to all this though is *WHY* you need the money to begin with. And are you making all this loan-taking-out a habit?
- You lack an emergency savings account of at least three months living expenses. I would make this 1 month or 1 paycheck cycle, but yes – in general without an emergency fund you can get screwed REAL fast…. And not in the good way ;)
And here are 5 I would chime in with as well:
- You’re losing money every single month. This is a pretty obvious one, but you’d be amazed at how many of us *are* losing cash every month without even realizing it :( I was in that boat myself 6 years ago before I started tracking it all and SEEING those numbers go down! My mental calculations thought I was saving $200 every month when in fact I was *losing* around $200 a month – scary stuff. The moral of the story is to track your money for at least a month or two so you have a much better picture of your overall cash flow there.
- You’re always transfering money from your savings to your checking. Another game I played allll the time back in the day! Haha… It’s the worst. You set a budget for yourself, go over by a few dollars (or hundreds), pull money out from savings to cover everything, and then tell yourself you’ll move it back next month when you magically budget better. HAH!
- You ignore debt collectors. Or worse, you’re GETTING CALLS from debt collectors! Haha… But just like everything else in life, the more you ignore it the worse it’ll get. Whether you believe you’re in the wrong or not, it’ always good to face this stuff head on and work on a game plan to rid yourself of all that stress and nonsense once and for all. Contrary to popular belief, most of these people/places are willing to work with you if you speak up! (And they’re not all shady scammers either, although you do have to keep a watchful eye out)
- You can’t afford anything off the McDonald’s Dollar Menu. Or at the Dollar Store! Haha…
- You don’t read BudgetsAreSexy.com. I mean, come on, right? “Epic fail” right there ;)
Okay, I’m gonna stop here before this list goes downhill, haha… Just don’t do any of these things and you’ll hit Baller status in no time.
Have anything to add? Preach it to the world in the comments below! Big thanks again to Lenny boy for the inspiration today – I needed something fresh to sink my teeth into :)
[Photo by mil8, tweaked by J$]
PS: Some of my favorite tools:
|Personal Capital (FREE) -- If you’re looking for a robust financial tracker, Personal Capital is the way to go! They’re like Mint, but on steroids and have much better tools for investment and net worth tracking. // Full review|
|Digit (FREE) -- A super easy (and automated) way to save. Every day Digit analyzes your income and expenses and will push money aside for you any time it sees extra sitting there. I've saved over $4,000 myself using them so far! // Full review|
|Acorns -- Having trouble finding money to invest? Check out Acorns – they round up all your transactions to the nearest $1.00 and drops the difference into an investment portfolio for you. Easy way to start investing! // Full review|