Most people made financial mistakes that seem very sensible at the time but it turned in stupidity over a time. Those decisions are may be Budgeting for the short-term, Overspending on housing, Skimping on career investments, Falling victim to spending traps, Failing to negotiate prices, Earning income from only one source, taking too much debt, Trying to beat the market, Paying too much attention to the Dow, Counting on Social Security, Overspending on gifts and Underestimating tax bills. Amongst all, below mentioned five mistakes are regularly seen in people.
Buying Something Because It Is Interest-Free for Awhile
It seems quite interesting when a person reads and buy zero- interest window or 90 days same as cash offer. Person will not charge any interest if he pays in 90 days.
A Chicago-based certified public accountant said that people do not save excess money instead of that they buy things more and more and then pay high interest on remaining payment. For example, consumers make such mistakes when they open a store credit card to get a 15 percent discount, but then carry a 22 percent interest on balance payment.
Buying Long-Term Care Insurance When You’re Broke
People usually buy long term care insurance to get benefits on daily basis. But it is ridiculous to buy the same when there is a weak financial condition.
Buying Life Insurance for a Child
Insurance for a child is worthless unless a kid is Justin Bieber. Many people buy it for a safe side or for a worst happen.
The reason may be correct but generally, parents take out life insurance because their child depends on them for financial support. CEO of the LIFE Foundation, Marvin Feldman says that otherwise than a history of significant health problems in a family, child doesn’t have trouble getting it as an adult.
Not having a credit card
It is not a sign of smart person if a person has a mountain of credit cards. Unfortunately, most of the people believe it. In fact, it is sign of debt on your head.
Not Allotting Space in Your Weekly or Monthly Budget for Fun
Some people believe that there is no space for entertainment in budget. One must have to spend in food, shelter and rent and not even a single time in movies. But the fact is far. Kevin Gallegos a vice president of Phoenix operations for Freedom Financial Network says that depending on income, person have to spend a small amount for a dinner out each month or for a movie as he is a human being.
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