Here on Ultimate Money Blog, we focus on strategies, tactics and tools to help you strengthen your financial health. And so, you might be taken aback by the title of this blog — and perhaps wonder if we’ve lost our minds, or if we’ve been hacked by credit card companies and the like who want you to spend, spend, and spend some more (and then borrow money for further spending).
Well, don’t worry: we haven’t lost our minds, and we haven’t been hacked. Rather, we know that sometimes in life highlighting what we shouldn’t do is more effective — and more memorable — than highlighting what we should. Yes, this is kind of a pessimistic way of looking at things. But occasionally it’s necessary — and this is one of those times.
And so, in a clearly tongue-in-cheek manner (read: don’t do any of these things, and don’t let anyone you care about do them either), here are three sure-fire ways to destroy your financial health:
Regularly Making the Minimum Payment
“Minimum payment” should be deleted from your vocabulary. In fact, it’s a wonder why consumer-advocacy groups or the government hasn’t stepped in and outlawed this phrase. Why? Because the minimum payment isn’t the minimum payment. Rather, it’s the minimum debt payment.
Of course, “minimum debt payment” doesn’t sound nearly as pleasant as “minimum payment,” which explains why credit card companies use it: it gives people a false sense of comfort and security that they’re staying even, when in truth they’re sinking deeper into debt.
Now, this doesn’t mean that you shouldn’t pay the minimum amount when there is no other option. Obviously, that’s better than not paying anything at all! But always remember: it’s not a minimum payment. It’s a minimum debt payment. And if that kind of bugs you, then good! You want it to. That will motivate you to pay off the balance as quickly as possible.
Keeping Up with the Joneses
Advertisers have long since known that the simplest and cheapest way to get people to buy more stuff isn’t to sell it to them directly: it’s to make them covet their friends (and indeed, their enemies) possessions.
Don’t fall for this trap, because keeping up with the Joneses is another guaranteed way to sink deeper and deeper in debt. And to make things even worse, you won’t enjoy your purchase for long, because it wasn’t motivated by an authentic desire for something better. You simply wanted to stop feeling bad because someone had something that you didn’t. Within weeks — or maybe days — of needlessly buying a new smartphone, a new pair of shoes, or maybe even a new car or new hours, you’ll stop feeling euphoric, and start feeling envious: because there’s always something else out there that you don’t have. This doesn’t mean that you shouldn’t treat yourself to new stuff (provided, of course, that you can afford it!). But if you do, then ensure that it’s something you truly want. Play by your own rules — not theirs.
Not Having a Budget
If you want to have chronically bad financial health that lasts forever, then your path is simple: constantly spend more than you have.
Fortunately, avoiding this road to ruin is also simple. Put together a realistic budget based on your income (all sources) and expenses. There are plenty of apps to help you with this, and many of them are free. Don’t assume that you’re saving money when you aren’t.
A Final Word
If you’re already deep in debt and the above advice won’t help you escape, then don’t panic. You have options, which may include filing for bankruptcy protection. To learn more about this possibility and see if it’s the right move for your long-term financial health, speak with a bankruptcy attorney at the Law Office of Charles Huber.