We all do it sometimes; A pair of shoes you didn’t really need, a new car to celebrate your promotion, a ‘bigger’ screen television to replace the ‘big screen’ one from last year, because you just got another tax refund.
When times get tough or a great opportunity comes up and you don’t have the money to make a move, sitting back and thinking about all the money you’ve wasted can very painful. But, what can prove to be even more painful is the fact that many people are wasting money and don’t even know they’re doing so. Here is my list of the Top 5 Ways People Waste Money.
This is a big one. If the other 4 weren’t so good (or bad depending on how you look at it) this would be higher on the list. Yes, a car is a great way to independently get around and having reliable transportation is a must for certain jobs, but when you’re making $40,000 a year and you go out and finance a $60,000 vehicle it’s apparent that you do not have your financial freedom in mind. This is a move made for 2 reasons; impulse buy or trying to keep up with the Jones’. Either way you slice it, it’s a bad idea.
Think about it like this; Add up your car payment, monthly insurance, then add in gas and maintenance costs. Now total that all up and take a long look at the result. Oh let’s not forget that your car depreciate in value as soon as you drive it off the lot. Yup. Think about what you could do with that kind of money by the end of the year. What’s the alternative? Simple, get a less expensive, reliable vehicle that you can pay off quickly. If you pay off your car in a year or two and it lasts you 5 years after that, that’s 5 years and thousands of dollars you can use to invest in your future.
On the flip side of this is the celebrities and athletes who go out and buy dozens of expensive cars before the check even clears. I don’t get it. You have two feet, how many cars do you need? Of course a lot of these people end up broke years down the line. Don’t let this shit happen to you.
A few years ago this would apply to mostly women, but things have changed. Through the popularity of movies and music -cough- (hip hop), the fashion industry has changed the perception of success in many people’s minds. There’s a difference between being a salesman who needs to look the part for a meeting and buying a $1500 bag just so people can say you’re ‘balling’. One catastrophic mistake in your investments, brand, or overlooking your expenses can have you in a situation where you need cash as soon as possible.
What if you or someone you love has a health emergency? Do you think the doctors are taking a bag full of your expensive shit as payment? Look at Bill Gates and Mark Zuckerberg. These two guys look like they shop at Old Navy, but they are two of the wealthiest men in the world. This is why they will never go broke. They know and understand the fickleness of our economy and the difference between rich and being wealthy.
I’m not talking about investment properties here. Those are thumbs up all the way. I’m talking about the people who go out and buy a 5 bedroom Barbie Dream House just because their credit score is over 700 and they have a nice nest egg in the bank. I’m also talking about the newly rich that go out and buy a few 20 room mansions knowing that they are single, with no kids, and will hardly ever be home. I’m shaking my head right now. Other than a multi-family as an investment property, a house is a big liability. More often than not whatever money you put into improving it will not matter when it comes time to sell. But, if you disagree go roll the dice if you want and find out the hard way.
If used responsibly credit can in fact help you get rich, but I’m not talking about responsible people here. I’m talking about the ones who use credit to buy all the stuff I listed above in numbers 5-3. If there is anything you learned from the 2008 financial crisis it’s that you have to respect credit just as a gun owner would respect a loaded AK-47. You have to know how to safely handle it and only use it if necessary. It’s far too easy to get caught up in the moment and reach into your back pocket or purse to indulge just this one time. The problem is that one time can start a domino effect that will take you years to recover from if you ever do. Honestly who can afford to waste that much…
The time you waste on your phone, computer, television, dead-end job or hanging with friends or relatives who live their lives by the battle cry, “You Only Live Once” is going to leave you running on the hamster wheel until the day you die. That is of course if you don’t make a change right now. Go ahead and add up how many hours a day you spend ‘vegging out’ or wasting time doing things that have no positive effect on your future. Sure it’s okay to take some time to relax and have fun, but some of us are doing that shit full-time. If you’re one of those people, you don’t deserve fun time. You’ve already had enough to last a life time haven’t you?