Sometimes, you do not have to interrogate someone to know they make poor financial decisions. How people live will tell you outright whether they are frugal or not. And we are not talking about the occasional dining out. Some people always complain about being broke, but they still spend ridiculous amounts on things they do not need.
Being frugal requires discipline. This means learning how to make sound financial decisions. Here are examples of things people do that scream they make poor financial decisions.
Using Fake Stories To Borrow Money
When you find friends avoiding you when you ask for ’emergency’ money using fake stories, you should know you are making poor financial decisions. If you need money from your friends, do not come up with fake stories because sooner or later, they will realize you duped them, and they will try to avoid you.
Neglecting Your Kids To Spend on Unnecessary Things
One person could not pay school fees for her kids but could comfortably afford to have custom rims and wheels on her car. Another comfortably affords new cars and all sorts of expensive toys but cannot put his kids through college. Such people invest in liabilities while neglecting important things in their lives.
Prioritizing Short-term Gratification Over Long-term Financial Goals
Constantly seeking immediate gratification by spending money on non-essential items instead of saving for future goals (such as retirement, education, or investments) may indicate a disregard for long-term financial well-being.
You Do Not Know How Much Something You Own Costs
Some people who finance their stuff do not know the ballpark figure of what they will have paid in the end. When you ask them how much they paid for something, they do not know. They only know about the monthly payments they make. Some of these items are highly overpriced when financed.
Ordering Deliveries Online While Struggling With Money
How can you always complain about struggling with money when you order food and expensive coffee online while working at home? You could at least save some money by making a pot of coffee for yourself at home. These deliveries cost a lot of money, and you may have to tip the delivery person.
Always Out Having Fun and Can’t Pay Rent on Time
How can one afford to go out every night and spend a lot on drinks and food and cannot pay their rent on time? These people have their financial obligations and priorities all wrong.
Money Burns a Hole in Your Pocket
Every time you get money, the first instinct is how you will spend the money. You try to look for ways to spend the money you have all the time. You do not feel comfortable having a lot of cash with you, so instead of finding ways to invest or save, you spend it all on things you probably do not need.
Buying Luxury Products on Debt
There is a reason these products are luxury. They are meant for people who can truly afford them. If you have to get into debt to buy these products, you probably cannot afford them, and doing so is a poor financial move. Companies that make luxury products market them to people who earn below 6 figures but want to look and feel like millionaires. Rich people do not like showing off these brands. They go for quality clothes that are not smeared with logos of luxury brands all over.
Signing Up for an MLM/Pyramid Scheme
When you can look at each company’s income report and see 99,7% of the sellers lose money, you must have some critical thinking issues to think it won’t happen to you.
Going to Disney and Complaining About Money
Going to Disneyland should be on everyone’s bucket list. However, if you go there and spend thousands of dollars and then start complaining about how you are broke, you should know you are making a poor financial decision. A trip to Disneyland should be a trip to remember without having to break your bank account. Start saving for such a trip as early as possible.
Having Everything on Monthly Payments
It feels good to have beautiful gadgets and new stuff. However, paying for these things monthly may not be a great financial move. You would rather save money and buy these gadgets one by one in cash. You will pay more in interest payments when you finance these items.
Neglecting Savings and Emergency Funds
Failing to prioritize saving money or having no emergency fund can leave individuals vulnerable to financial shocks. This makes it difficult to handle unexpected expenses or achieve long-term financial goals.
You Can Afford Tattoos but Cannot Afford Food
Before you buy a tattoo, ensure that all your bills are paid, animals and humans in your care are taken care of, your debts are settled, and you have some savings in the bank. Spending thousands of dollars covering your body in ink and then lining up for food stamps is not prudent.
Buying Branded Stuff
Buying unreasonably expensive branded bags, clothes, shoes, etc, when you cannot afford them is a poor financial decision. Many people do this to impress their peers and end up in debt. Most of these branded items are poor quality anyway.
Taking Payday Loans to Shop
Payday loans should only be taken when you have a real emergency and cannot access money. Do not take payday loans for shopping because the interest payments on these are quite brutal.
Impulse Buying and Impulsive Spending
Regularly making impulsive purchases without considering the long-term consequences can accumulate unnecessary debt and hinder financial stability.
Ignoring Budgeting and Financial Planning
Avoiding or neglecting budgeting, not tracking expenses, or lacking a financial plan can indicate a lack of financial discipline and a tendency to make haphazard financial decisions.
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