There are many people out there who are supposedly knee deep in debts for reasons that one could be sympathetic to. It could be an education of a child, health of a spouse, a home mortgage, financial problems and many other such heart wrenching situations. But there are also some people who are so careless with their money management skills that they end up landing in debts due to foolish and dumb reasons. 11 most committed foolish mistakes that lead to debts are stated below.
1). Car Lease
Some people just don’t get it! They plan to use a car for only a few years and end up wasting thousands of dollars on just leasing the car. The question arises here is as to why even need to lease a car when you know you have to use it for a short term.
Instead why can’t you save that much money for a better purpose. Car leasing however does give you a chance to sport new looks, but is it worth it? Your getting into debts just because you want a few complimentary oohhss and aahhs over your car! Pretty dumb!
2). Materialistic Obsession
It seems like men and women alike have gone crazy over possessing materialistic things and too in an abundant quality. They want to buy more clothes, more shoes, more makeup and everything available at a shopping mall, when in actual they hardly need them at all. Credit cards are flashed out of the wallet at every moment and by the end of it, your in new suit and new pair of shoes just walking to a debt consolidating company!
3). Financing An Unaffordable Car
You see a brand new SUV car costing above $60,000 and knowing the kind of income that you have, you still want to pursue that car. The result? You try to finance a car that you cannot afford by picking up a loan and spend years in trying to pay off money for a commodity that changes its look as well as its value every other year. A car depreciates up to 25% of its total value as soon as it is taken for a drive. What you are going to pay is for something that will keep you in loss.
4). Credit Card Mania
Credit cards are so easy to use right? You want that new plasma TV, you flash out the credit card, the new laptop, again credit card. And though these are things you cannot afford, still you will put up paying with 20% interest on those depreciative items. So, a laptop costing you $300 will end up costing you $600, courtesy of the interest rates.
5). Latest Gadgets Craze
People will happily get themselves into debts and loans just in order to gain approval over some latest gadgets that is far beyond their income status and also far beyond their need. Desire to look cool and trendy leads to looking foolish and dumb with debts being paid for the next five to six years of your life!
6). Celebrity Hobbies
Knowing that your bills are driving you crazy, your kids need some kind of educational savings and your family needs better money management skills, you still end up joining the latest swimming club or golf club. You make an excuse of “refreshment for the mind” by actually paying for something that will cause you more pain than gain! Choose hobbies that doesn’t cost you a penny! That would be truly mind refreshing!
7). Spiraling Debt
The spiraling debt is usually occurs when you land yourself in a best buy financing offer or when your at a sales area in a shopping mall. All the items come tumbling in your mind and you end up purchasing more and more of them, just to land up in more and more debts, without even realizing it.
8). Loans to Relatives
You try to be philanthropic and give friends and family member a loan without considering any pro and cons. If your income savings are not much, you might just end up in debts too! In a very foolish manner that is.
9). The Need To Be On Top
Again the desire to be trendy and up to date on all activities. Whether it is a premium membership to an online store, a VIP club membership, an expensive and upgraded version of a gear or gadget, you want it all! And you also pay for it all when all these stuff will loose their value halfway down the lane.
10). Gambling
Casinos, sports, gambles and cards are known to be the most fearful factors of landing in debts. You might just land up on the streets within a matter of minutes when playing with these fear factors.
11). Renting Stuff
Most people have the silly habit of renting things they can’t afford, just to know that they are paying double the amount each month instead of purchasing it at the original amount.
Conclusion
These may be dumb but real reasons why some people have had their lives destroyed. Do not ignore the fact that money comes and goes and it can only stay if you know how to deal with it.
