Good money management is such an essential aspect of ensuring your financial success. Unfortunately, not everyone has the best judgment when it comes to handling their money. Here are ten of the worst financial decisions someone could make.
Gambling addiction is a real problem and can lead to severe financial ruin. It's fun to try your luck occasionally, but blowing your entire savings on one game? Not so much. “I knew someone who got a loan for their wedding but decided to blow it all at a casino. Now they have a loan for 20k to pay off and nothing to show for it,” one man said.
2. Basing Mortgage on Overtime Wages
“A coworker I used to have worked every second of overtime he could for several years to save up for a house. When he applied for the house loan, he based his mortgage payment on all of the overtime he had been working. I tried to tell him that wasn't a good idea, but he didn't want to hear it. He ended up divorced a few years later because his wife got tired of him always working,” one man commented. We're all guilty of counting our chickens before they hatch, but relying on overtime pay to make ends meet could lead to disaster.
3. Poor Business Investment
“A dude who owned a small convenience store in our town spent like $20,000 on fidget spinners. He was posting for like a year begging people to buy them as he would lose his business, and his marriage was falling apart due to it,” one man shared. Although the saying says that you have to spend money to make money, you could lose everything if you don't research to ensure you're making smart business investments.
4. Gave Up Free College Tuition
Education is expensive, and if you have the opportunity to get your kids through college for free, take it! “I had a coworker with 5 kids who could all go to USC for free once he has worked there for 15 years (even if he quit). He quit at 14.5 years for a job that barely paid more than he made at USC. Cost all 5 kids a free education at a top school since he couldn't wait 6 more months,” someone said.
5. Tried to Hide Assets from the IRS
Trying to hide assets from the IRS is illegal. But doing so by putting all your assets in someone else's name is just plain risky. “Put everything in his girlfriend's name to hide assets as he owed the IRS, the girlfriend sold his business, cashed out his accounts, and ran,” one man shared.
6. Massive Figurine Collection
Unless they could be sold for a profit, a massive, expensive figurine collection just takes up space and drains your bank account. “My coworker has $25k in anime figurines. He is in mega debt right now,” someone commented.
7. Used Food Delivery Services Every Day
“My roommate buys doordash almost every day. They'll maybe cook for themselves once or twice a week, but other than that, they order food 5-6 times a week. I know how much they make, and I have no clue how they can afford that,” one man said. Food delivery services are convenient, but those fees add up fast, and before you know it, you've spent a small fortune on takeout.
8. Sold Home to Realtor
“My (awful) aunt was the trustee for my grandparents' estate. When they passed, she decided to sell their house to a random realtor who put a leaflet on the door (to the realtor, not WITH the realtor). It wasn't put on the market, and the aunt rejected a matching offer from me after I argued hard to actually list the house and have people bid on it. The realtor slapped a new coat of paint on it and sold it a couple of months later for literally a million dollars more than she bought it for.” Realtors are in the business of making money, and they'll lowball you on your home's value to make a profit.
9. Responded to Scam Emails
Many scammers use emails to lure people into sending them money or making phony investments. If an email sounds too good to be true, it probably is. “Knew someone who answered those scam emails thinking they would get rich. Last I heard, he lost around $50k. Emptied out savings account and maxed out credit cards. Left in debt and had to move back with ailing parents.”
10. Spent 401(K) on a Pet Store
If you're going to dip into your retirement savings, make sure it's for something worthwhile. “Retirement age person emptied out their 401(k) to open a pet store. Five years later, no more pet store.”
This post was inspired by this thread.
She started her blog, The Money Dreamer, when she realized the 9-5 job was not the lifestyle she wanted anymore. After designing for a while, she wanted a more meaningful life, which was freedom, so she decided to venture out. She took action so that she can live her dream life and decided to help people to live theirs by helping them how to save, budget, and invest.