Tag Archives: Money Dangers

Avoid Greed

Too often, when we are dealing with money, we lose to greed. What exactly is greed and how can it hurt? Greed is an emotion that surfaces almost unknowingly. It is an exciting feeling that can overtake us, influencing our ability to be practical and logical. If you have ever played a slot machine, you most likely have experienced greed. Once you hit that first jackpot, the rush you feel, as those coins fall into the bin, is greed raising its ugly head. If you could collect your winnings and walk away… you have fought the evil greed monster. Most … Continue reading →

Finacial Pitfalls: The Miscellaneous Category

One area that many people have a difficult time with is the miscellaneous category. This is a category where you tend to put in unexpected expenses. It can be difficult because you may be putting things in this category that do not really belong there. There are several expenses that you should not be putting into the miscellaneous category. Eating out is a common expense that is not planned for and then shuffled into the miscellaneous category. Other entertainment expenses, such as movie tickets, also get put into the miscellaneous category. These optional expenses should be planned for with a … Continue reading →

Why Would You Take Out a Home Equity Loan?

What do you use your home equity loan for? There are as many different reasons for taking out a home equity loan, as there are home equity loans. It is important to examine the reasons that you are taking out the loan, and how soon you plan to repay that money. While there may be times when you need to use your home’s equity (a medical emergency) chances are you can avoid doing it. Many people take out a home equity loan versus another type of loan, because the interest is tax deductible. While this may seem like a good … Continue reading →

Finacial Pitfalls: Gym Memberships (That You Never Use)

One major financial mistake that several people make is joining a gym at the beginning of the new year. There is nothing wrong with joining a gym, if you are going to use the membership. If not you usually sign up for a year contract that is difficult to break, and you end up wasting money that you could use elsewhere. You can run into the same difficulty when you are considering joining a weight loss group as well. Here are five things to consider before you sign that gym contract. 1) You should try out the gym first and … Continue reading →

Financial Pitfalls: The New Car Mentality

One big financial pitfall is the new car mentality. Many people like to drive new cars and feel they need the safety and security. Here are four myths that support the new car mentality. 1) Many people feel that they need the latest model car. A new car is a status symbol. There is a certain feeling of accomplishment when you drive a brand new car off of the lot. You have achieved something. But you have also lost something. The average new car depreciates two thousand dollars the second you drive off the lot. If you have two thousand … Continue reading →

Financial Pitfalls: Failure to Budget Important Categories

One major financial pitfall is to neglect to budget the categories that allow for discretionary spending. These categories are the ones that can vary from month to month. These categories can include groceries, eating out, clothes, medical expenses, gifts, and fun money. It is important to track these categories because it is easy to overspend in each of these areas. Many people will sit down and write out a budget that includes only their bills. They see that they have a large surplus of money, and are constantly confused at where the money disappears to each month. At the end … Continue reading →

Financial Pitfalls: Failure to Establish Financial Independence

One important step in managing your finances is to become independent of outside help. Usually parents or in-laws offer this help and it may be small amounts of money monthly or it may be large gifts of money annually. If your parents are in a position to give you money this is can be seen as a blessing. Many parents are able to help their children with a down payment on a home. They may also help with the purchase of your first car. While these gifts are nice. It is important that you do not become dependent on them. … Continue reading →

Financial Pitfalls: Discretionary Spending

The biggest financial pitfalls for most people happen in the areas of discretionary spending. Groceries, eating out, fun money and miscellaneous categories all fit into the discretionary spending category. It is important to control the amount you spend on these categories, because it can affect your budget and the money that you have. Here are five tips on controlling discretionary spending. 1) Switch to cash for these purchases. Once you have run out of money for the month, you quit spending. It will take discipline, but it will be worth it. You can end up saving a lot of money … Continue reading →

Financial Pitfalls: Holiday Spending

Nearly everyone loves the holiday season. Along with its joy and excitement, the holidays bring a dangerous financial pitfall: overspending. It is certainly easy to overspend over the holiday season, but it can be dangerous, and have long lasting effects. If you have ever spend the next six months paying off your Christmas expenses, you should understand what I mean. You can avoid overspending by following these five little steps. 1) Set a limit for the amount you are going to spend on Christmas gifts this year. Then make a list of who you are going to give to, and … Continue reading →

Financial Pitfalls: “I’ve Got to Have It NOW!” Syndrome

One of the biggest financial pitfalls that many people face is the “Got to Have It NOW!” syndrome. You can easily spot those that suffer from it, because they are constantly acquiring new things. The things, which they generally buy, are the latest models with the most features. If you are related to someone (i.e. married) with this syndrome you have learned that looking through the latest technical or automotive or fashion magazines can be a big downfall. Here are five tips to help cure the syndrome. 1) Pay cash for all items. This means that you do not go … Continue reading →