We all make silly decisions from time to time. Whether you’ve signed up to your local gym on a whim and can’t get yourself motivated enough to hit the treadmill, or you’ve accidentally eaten an entire tray of freshly made cookies without even noticing, oops moments happen. In everyday life, a silly decision can cause you embarrassment or attract the anger of your friends or relatives. We get it: It’s a painful situation, and you wished you had thought about it twice before doing whatever it is that you did. But in the piggy bank world, a stupid decision can have serious impacts on your budget. Spontaneous or poorly thought ideas can even blow your savings, throw your budget in the red, or completely bankrupt your company. In other words, it can make you significantly poorer, whether it’s permanently or temporarily. Here are 8 of the most costly bad financial decisions that you could take throughout your life. So, remember to keep your eyes open and your wallet firmly shut in future!
Too cool for a budget? Nah
A lot of individuals love the idea of being spontaneous. It’s about living in the moment and doing something that is both exciting and romantic. Planning and more importantly budgeting are good for boring people, they think. Oh really? You may want to ignore their words and consider the damages of an unbudgeted lifestyle. Not planning for the invoices to come or for the long-term future is never a good idea. You will work until your mid-60s and then what? If you haven’t planned for a pension, there’s no way you’ll be able to retire. Managing a budget is the best strategy to protect your income and defend your due. Without planning, there’s no possibility of building a future, let alone a day-to-day existence.
Are you a planner?
Drink and drive is a no go but what if it happened?
So, there you were, partying with friends and you didn’t feel like spending 50$ on a cab. So you decided to drive back home. You probably talked yourself into driving, convincing yourself that you were as good as sober. And that’s when you got arrested for Driving Under the Influence of alcohol. Here’s something important that you need to know. It’s no small mistake. With a good DUI lawyer to fight for your rights, you may lose your driving license. Here’s the catch: What if your only way of getting to work is by car? Without a driving license, you can’t work; ergo you lose your income.
Drink and drive, no thanks!
Car insurances are an extortion!
Yes, we get it: Car insurances are expensive, especially if you want a comprehensive insurance that protects your car and helps you in case you accidentally damage another vehicle. But uninsured drivers are putting everyone at risk, whether you refuse to buy your insurance or collide against an uninsured vehicle — if this is the case, you can protect yourself with the right coverage against underinsured motorists. In fact, 1 in 8 drivers in the USA has no car insurance. But driving with insurance is not synonymous with saving. It’s a crime that can include severe punishments from a fine to jail time and license suspension. It’s a risk that is not worth taking. Saving a few hundreds $ now might send you to jail if you’re getting caught.
But I really need these shoes!
Ah, credit cards, the little marvels that allow you to buy anything you want. Do they really let you do that? American households collectively have more than $1 trillion in credit card debt. The reason for that is that a lot of people still think of the credit card like a magical buy all you can card. Postponing payment is, in theory, a good idea, but in practice, it has generated a scary milestone for American consumers. The rule is easy: Don’t buy what you can’t afford in your budget — hence the importance of planning. Lack of budget management combined with a credit card is leading the USA to a monstrous debt.
Shopping mall: First destination of all credit cards
First home, first mortgage, first big mistakes
First homebuyers often make big mistakes when sorting out their financing options. This starts by spending everything they can afford on the house. Of course, you want the best possible home; but you need to plan for future expenses, from improvements to growing the family. A lot of first-time buyers don’t check their credit scores, and consequently, are unable to improve it to get a better mortgage deal. As a result, it can be difficult to afford your dream home or to handle repayments if you’re forced to pay a big deposit first.
Fundraise your business with ICOs without a plan
If you want to launch your startup, the quickest and smoothest way to gather the necessary funds is to use cryptocurrency. Everything would be perfect if ICOs were not subject to vast scams and suspicious transactions that can cost you a lot of funds, if not your entrepreneur career. For a start, if you’re new to the crypto world, you want to read about the safest and trust-worthiest exchange platforms. Some popular exchanges have been known for stopping transactions or disappearing overnight.
Love your wedding day, not your wedding debt
Getting married should be one the best days of your life. However, for more and couples, it’s becoming the first day of their wedding debt. So it’s essential to plan your wedding accordingly, starting with a reasonable and thorough budgeting plan. Discuss openly with your family the amount of each contribution, and never assume that the bride’s family will pay for the lot. This will end up being a terrible surprise on your wedding day. It’s essential to understand that it’s not a day designed to show off your wildest dream. It’s about celebrating love. It doesn’t have to cost an arm.
Children are cute AND expensive
Let get things clear from the start: The cost of raising a child is $233,610, according to a report from the Department of Agriculture. The reports tracks costs related to housing, transportation, and clothing, among others. In other words, planning to have a child begins with budgeting for it and then managing a family budget closely.
This non-exhaustive list focuses on the most common financial faux-pas in everyday life. The bottom line is: Stay alert, budget first, then decide.
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