Top 5 Worst Personal Finance Mistakes
NEW YORK ( MainStreet) Ever had buyer's remorse for an expensive pair of shoes you bought? These personal finance mistakes go way beyond that. These are the worst money blunders that are present in plain view.
Imagine being a slave to student loan debt for the next 20 or 30 years (or forever) because you didn't even try to find a less expensive college or choose an employable, useful college degree. If you think having a brand new sweet ride every two years, a huge house and a new iPhone is the way to spend your hard-earned money, what would happen if you lost your job? Picture yourself at the foreclosure court losing that house you've made payments on and getting nothing in return, handing over your car keys to the re-po man or ending up on the unemployment line with no cash, a baby on your hip and a long list of creditors calling your house every day. Worse yet, picture yourself 65 or 70 years old scrimping by because you never saved enough and then being told your beloved granddaughter defaulted on the loan you cosigned and now you have to pay it for the rest of your life. Scary, right?
Mainstreet polled several personal finance experts, each with a different specialty such as debt, credit, family finance and wealth-building, and found these to be some of the worst, yet most common, personal finance decisions people make. In fact, in a recent National Foundation for Credit Counseling (NFCC) poll, 80% of respondents said they make the worst decisions involving their personal finances, over marriage, health and job mistakes.
Dave Ramsay, debt-free expert and author of The Total Money Makeover , says our culture teaches us to live for the now and it can lead to these types of life-long financial mistakes.
"It's human nature to want it and want it now," he says. "And you can always get it, especially if you are willing to go into debt."
He says willingness to delay pleasure is a sign of financial maturity.
It's also a way to avoid making the biggest personal finance mistakes of your life, at any age.
20s: Too much student loan debt
"Getting into to more than $30,000 in student loan debt in a profession that pays less than six-figures a year is a huge mistake," says Ellie Kay, family finance expert and author of Lean Body, Fat Wallet .
Ramsay says we have to break the mindset that college students need student loans. He says you don't have to choose pricey private college just because you were accepted there. "You can reduce your student debt by sticking to a state college, always keeping a part-time job, keeping your GPA as high as possible - during high school and college - and the higher your SAT/ACT scores, the more scholarship money they are worth," he said.