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10 Signs You’re Committing Financial Suicide Though You Don’t Feel You Are

10 Signs You’re Committing Financial Suicide Though You Don’t Feel You Are

Being able to properly handle your finances is one of the things that proves that you are a mature person. This is easier said than done, and even if you are in possession of some extra cash at the end of each month, it’s still not proof that you’re being responsible. In other words, simply not being irresponsible does not necessarily make you a prudent individual.

The act of financial suicide is not something that happens instantly, it is something you have plenty of time to back out from. Unfortunately, we can constantly see how people are either struggling with their finances, or how they ended up completely broke. When something like that happens, the blame is usually placed on the country’s economy, or on the tax system, etc. Although there is truth in that statement, it still does not completely justify one’s recklessness. If you are aware of the conditions you are living in, you need to work towards solutions, not excuses. Here are the most common mistakes people make that cause them to collapse financially.

1. You decide to have children, but you are financially unstable

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    If you plan on raising kids properly, you need to have financial stability, and enough time on your hands to do it properly. Without a stable financial state, you may be setting a bad role model for them. After all, the apple does not fall far from the tree, and financial suicide is likely to be inherited.

    Being able to provide for your child’s health care, clothing, education, and so on is not cheap (over a lifetime you may end up spending millions), but necessary for a brighter future. Take these expenses into consideration when you plan on raising children. If you truly want to have a healthy family, prioritize your career, and use your desire to allow your ambitions to properly bloom.

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    2. You are financially dependent on other people

    Our friends and family are always willing to help, however going through life as a charity case is definitely not the way to live. Everybody has his or her boiling point, and no one will tolerate your incompetence forever. Sooner or later, your relationship with your loved ones will get worse if you do not start doing something productive with your life.

    When you borrow money, do everything in your power not to get into the same situation again. Calculate how to lower your expenses, think about what you can do to earn some extra cash. To say it bluntly, you need to realize that you are in a serious problem.

    3. You start settling your debts by turning to money loans

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      Regardless of how difficult your financial situation is, you must never allow yourself to settle your debts by turning to payday loan companies. These are just seemingly easy solutions, meant to lure you in and deplete your finances faster than you think. These companies are very widespread and they are extremely profitable. If you want to get out of debt, this is not a solution – you will only end up owing more money. Any financial adviser will tell you the same thing. These are just quick solutions that sound appealing in order to masquerade the intentions of completely draining your budget. Settle your debts by using any other alternative.

      4. You rely on bank credit all the time

      Another form of financial irresponsibility is constantly relying on bank credit. We hear stories all the time about how people are barely making ends meet, so they are waiting for their credit to be approved, so they are basically always in the red. The problem is the unpredictable future: if you are constantly tapping into your cash reserves, you are completely defenseless. What if something happens that throws your living situation out of balance? You will have no efficient solution, and it’s all downhill from that moment forth.

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      To avoid this, start living more modestly. Focus your efforts to return to a balanced budget, and consider all the possible options for earning a little extra. Ask your employer if there are more responsibilities that you can take on and be financially compensated for. Restoring your emergency fund is of utmost importance.

      5. You frequently gamble (or gamble large amounts of money)

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        Gambling in casinos, playing the lottery, and placing bets on sports games can be extremely addictive. When there is enough money in your budget, starting to place bets for the sake of earning a little extra is a terrible decision. Winning is far from impossible in these cases, but as mentioned, the problem lies in losing control. It is still unclear whether gambling should be defined as addiction or compulsion, one thing is certain however – people tend to use it as an escape mechanism, to relieve themselves from the anxiety, or to get their dose of adrenalin rush. Eventually, the condition takes over to the point where you are no longer concerned with the consequences.

        Whenever you think about gambling, put all the money you would invest in a piggy bank. Gradually, you will accumulate a handsome bank deposit that you can place in your local bank and allow it to grow.

        6. You are negligent towards office equipment

        This mostly applies to business owners. It is extremely difficult to balance your priorities, but still, your future and your business’s well being depends on the quality of your service. Always make sure everything is functioning properly, otherwise the whole situation can be followed be an unfortunate turn of events – also known as financial suicide.

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        Computers need to be maintained and function properly. Office printers do not last forever and you need to know when they might need a replacement. Headphone sets, cables and every minor detail that may seem unimportant need to be fully functional or they may harm your professional image. In this world, appearances and first impressions matter, so always strive to be at your best.

        7. Choosing the wrong/luxurious home

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          Living in a place you cannot afford, or living in an inconvenient location, is one of the most common causes for financial suicide. If you need to commute a lot in order to work on a daily basis you are likely to encounter problems with budget. Luckily this is a manageable issue, carpooling and saving money on gas is one of the best solutions.

          Much larger problems occur when you take a bigger bite than you can chew, or to be more precise, buy an expensive house without enough support. This kind of costly lifestyle will have a troublesome aftermath. Honestly, if you are not completely certain you can afford something, chances are you probably can’t. Opt for a home that you can afford one hundred percent – even if you are hoping to use it as an investment.

          8. You spend more than you earn on a monthly basis

          This is a very common trait in people who are newly employed. During payday week, they live like royalty, and for the rest of the month, they adopt a lifestyle similar to hermits. You may not have serious troubles with maxed out credit or loans, but you are still not making good use of what could be a very lucrative setup in future.

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          Know your limitations, calculate your expenses, and at the end of the month, treat yourself with something – but at the same time, avoid straining your budget. Work towards creating a solid nest egg and securing a more stable future.

          9. You are not planning your future

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            Responsibility merits healthy ambition, realistic goals, and always thinking ahead. Living in the moment is for high school kids and college students. With that kind of mindset, reality is bound to hit you hard. Spending cash and enjoying life is what people usually do during a summer break, since doing it throughout a whole year will leave you broke.

            Do not be satisfied with your life for too long. Too much hedonism is toxic for your future. Take time to enjoy, but never forget to push yourself and make endeavors, for the sake of progression. Organize your life, set goals and objectives, and devise strategies on how to realize them. It is imperative that you devote at least two hours of your day time working towards these achievements. Even failing is not a complete waste of time and money, as long as you have gained something valuable that you can implement in the future.

            10. You are lazy

            If you are done with your work and you go home and you have no other responsibilities, then you are lazy. It may seem like a strange definition, but it is true. It means that you have at least 5 hours of productive time and you decide there is nothing that you can do. Lazy does not necessarily mean you are lying around doing nothing, it also means you have a mortifying lack of ambition. In other words, not working towards increasing your budget means you are working against it, and once again, a step closer to financial suicide.

            When you are blessed with enough free time, do not let it go to waste, learn to invest it into something that can be lucrative. Even taking up a hobby can be a judicious investment, as long as there is someone who will appreciate your work.

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            Djordje Todorovic

            Blogger, Gamer Extraordinaire

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            Last Updated on March 4, 2019

            How to Use Credit Cards While Staying Out of Debt

            How to Use Credit Cards While Staying Out of Debt

            Many people will suggest that the best thing to do with your credit cards during these tough economic times is to cut them up with a pair of scissors. Indeed, if you are already in huge debt, you probably should stop using them and begin a payback strategy immediately. However, if you are not currently in trouble with your credit cards, there are wise ways to use them.

            I happen to really love my credit cards so I will share with you my approach to how I use mine without getting into deep financial trouble.

            Ever since about 1983 when I got my first Visa card, I continue to charge as many of my purchases as possible on credit. Everything from gas, groceries and monthly payments for services like my cable and home security monitoring are charged on credit. Despite my heavy usage, I have maintained the joy of never paying any interest fees at all on any of my credit cards.

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            Here are some tips on how best to use your credit cards without falling into the trap of paying those nasty double-digit interest fees.

            Do Not Treat Credit Cards as Your Funding Sources

            Too many people treat their credit cards as funding sources for major purchases. Do not do this if you want to stay out of trouble. I use my credit cards as convenient financial instruments so I do not have to carry around much cash. In fact, I hate carrying cash, especially coins. When you buy things on credit, the purchases are clean and you will not get annoying coins back as change.

            I do not rely on my Visa, MasterCard or American Express to fund any of my purchases, large or small. This brings me to my golden rule when it comes to whether I will pull out any of my credit cards either at a retail or online store.

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            I never purchase anything with my credit cards if I do not have the actual cash on hand in my bank account.

            If I really cannot pay for the item or service with cash that I already have at the bank, then I simply will not make the purchase. Remember, my credit cards are not used as funding sources. They are just convenient alternatives to actual cash in my pocket.

            Make Sure to Always Pay Off Balances in Full Each Month

            The next very important part of my overall strategy is to make absolutely sure that I pay the balances in full each and every month no matter how large they are. This should never be a problem if the cash has been budgeted for my purchases and secured in the bank. I have always paid my full balances each month ever since my very first credit card and this is why I never pay interest charges.

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            Using Credit Cards with Rewards

            Most of my credit cards are of the “no annual fees” type, including one MasterCard on a separate account I keep at home as a spare in case I lose my wallet or incur any fraudulent charges. However, I do use a main Visa card which does have an annual fee because all purchases on that card reward me with airline frequent flyer points. For me, the annual fee is worth it since I do travel and I get enough points to redeem many free flights.

            You have to decide for yourself if you will charge enough purchases on credit each year without paying interest charges to warrant a credit card that rewards you with airline points (or other rewards). In my case, the answer is “yes” but that might not be the case for you.

            I occasionally use a MasterCard or American Express card on small purchases just to keep those accounts active. Also, I have been to the odd retailer that accepted only a certain type of credit card, so I find that having one from each major company is quite handy. Aside from my main Visa card which earns the airline points, the rest of my cards are of the “no annual fees” variety.

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            So this is how I use my credit cards without getting into any financial trouble with them. This strategy is recommended only if you are not in debt, of course. In fact, it is worth keeping in mind once you’re out of debt so that you can keep your credit cards active and treat them responsibly.

            What are your credit card usage strategies? Let me know in the comments — I’d love to hear what methods you use.

            Featured photo credit: Artem Bali via unsplash.com

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