From Yahoo! Finance "My 10 Dumbest Money Moves – And How You Can Avoid Them"
Not Having a Goal
The 3 most common goals that most of us will try to achieve are getting a car, buying a house and get married. In order to reach these 3 goals, money is one of the most important factors. Most of us are able to achieve all 3 goals in early age but it takes 10~30 years to pay out all the debts. For some people, getting a loan either purchasing a car or a house is necessary as this is the only way they know how to save money. It's very difficult to resist the temptation to spend money if we have lots of cash in hands.
Not having a spending plan
If you don't track how you spend, you won't realize how much you spend. At the end of the month you'll spend more that you expected and you won't know where and how you spend it. Keeping a record of how you spend your money can cut down all the unnecessary spending and create a healthy way of using money without exceeding your budget.
Attempting to derive self-esteem from possessions
The question of either looks rich or be rich. That's a really good question. What will you choose? I think it is easy to look rich than actually being rich. Everybody have the chance to look rich. The question is how long can it last. We can have the house, the car and anything we need by just taking up loans. We can choose to work for the rest of our life to pay for the loans or we can choose not to have all the things we want so soon. Taking one step slower without having to take up so many loans can make life easier. Most important of all it will cost you lesser if you reduce the loans.
Doing what everyone else is doing
This is actually very simple but still most people choose to do what everyone else is doing. I suppose people think it's safer to do what everybody else is doing. It might be safer but most likely it won't make much money. The only way to make money is to do what everybody else is not doing. The one place that proves this theory over and over again is the stock market. But still most people are still doing what everyone else is doing.
Starting to save large and later rather than small and soon
Honestly I have this question in mind since I was in high school. I know that we should practice saving but the question is save large and later or small and soon. I got my answer after almost 20 years. I rather use the money for investment and building my money making opportunities than for saving.
Paying interest to buy things that drop in value
This is the two golden rules that we should follow. First is when the purchases go up in value at a rate greater than the rate of interest you're paying to finance. Second is when you can earn more on your cash that you're paying in interest. I suppose that is why we are always advice to purchase a house rather than a car.
Turning down free money
This only applies to US citizens regarding company's 401k and retirement plan. Employees should participate to get the full match offered by employer in company's 40ik or other retirement plan. All the allowance, benefits, insurance and medical given to employee by the company are money not in cash. Those are your money unless you claim them.
Buying a new car
I always see a car as a transport and nothing more. Everybody knows the value of a car drops instantly once it's on the road, and the value keeps on dropping over time. There is actually no need for a fancy or new car unless you're not planning to get most of the money back.
Buying more house than you need or can afford
Unless you're into real estate investment, there is actually not need to buy a big house or lots of houses. In my previous post which I introduced Yahoo articles related to billionaires, most of them actually live in a regular normal size house for years. They have the money but still they don't switch to big houses. Living in a big house eventually increases other expenses like housekeeping, electric bill, water bill, security and many more.
Not protecting your good credit
There is only one thing that I can think of when it comes to protecting a good credit. I suppose I need a good credit to borrow money, taking up loans and work on other financial related issue. A good credit record will makes things easy.
Review your spending habits and see if you are making one of the ten dumbest moves. If you are, this is the time to stop the habit!
Not Having a Goal
The 3 most common goals that most of us will try to achieve are getting a car, buying a house and get married. In order to reach these 3 goals, money is one of the most important factors. Most of us are able to achieve all 3 goals in early age but it takes 10~30 years to pay out all the debts. For some people, getting a loan either purchasing a car or a house is necessary as this is the only way they know how to save money. It's very difficult to resist the temptation to spend money if we have lots of cash in hands.
Not having a spending plan
If you don't track how you spend, you won't realize how much you spend. At the end of the month you'll spend more that you expected and you won't know where and how you spend it. Keeping a record of how you spend your money can cut down all the unnecessary spending and create a healthy way of using money without exceeding your budget.
Attempting to derive self-esteem from possessions
The question of either looks rich or be rich. That's a really good question. What will you choose? I think it is easy to look rich than actually being rich. Everybody have the chance to look rich. The question is how long can it last. We can have the house, the car and anything we need by just taking up loans. We can choose to work for the rest of our life to pay for the loans or we can choose not to have all the things we want so soon. Taking one step slower without having to take up so many loans can make life easier. Most important of all it will cost you lesser if you reduce the loans.
Doing what everyone else is doing
This is actually very simple but still most people choose to do what everyone else is doing. I suppose people think it's safer to do what everybody else is doing. It might be safer but most likely it won't make much money. The only way to make money is to do what everybody else is not doing. The one place that proves this theory over and over again is the stock market. But still most people are still doing what everyone else is doing.
Starting to save large and later rather than small and soon
Honestly I have this question in mind since I was in high school. I know that we should practice saving but the question is save large and later or small and soon. I got my answer after almost 20 years. I rather use the money for investment and building my money making opportunities than for saving.
Paying interest to buy things that drop in value
This is the two golden rules that we should follow. First is when the purchases go up in value at a rate greater than the rate of interest you're paying to finance. Second is when you can earn more on your cash that you're paying in interest. I suppose that is why we are always advice to purchase a house rather than a car.
Turning down free money
This only applies to US citizens regarding company's 401k and retirement plan. Employees should participate to get the full match offered by employer in company's 40ik or other retirement plan. All the allowance, benefits, insurance and medical given to employee by the company are money not in cash. Those are your money unless you claim them.
Buying a new car
I always see a car as a transport and nothing more. Everybody knows the value of a car drops instantly once it's on the road, and the value keeps on dropping over time. There is actually no need for a fancy or new car unless you're not planning to get most of the money back.
Buying more house than you need or can afford
Unless you're into real estate investment, there is actually not need to buy a big house or lots of houses. In my previous post which I introduced Yahoo articles related to billionaires, most of them actually live in a regular normal size house for years. They have the money but still they don't switch to big houses. Living in a big house eventually increases other expenses like housekeeping, electric bill, water bill, security and many more.
Not protecting your good credit
There is only one thing that I can think of when it comes to protecting a good credit. I suppose I need a good credit to borrow money, taking up loans and work on other financial related issue. A good credit record will makes things easy.
Review your spending habits and see if you are making one of the ten dumbest moves. If you are, this is the time to stop the habit!
