Personal finances is about learning important lessons regarding wealth building.
If, however, one does not learn how to handle their money, the little they have will be of no value. There are certain common and predictable qualities of those who are continually financially struggling. To avoid making those mistakes we need to explore the phraseology of financial losers.
Isn’t it amazing what you can learn about a stranger from the comments you overhear?
Several weeks ago I was in line at the bank and there was a lady beside me. Her son was looking at the bank statement and said, “Mommy, there isn’t any money in the bank.” The mother grabbed the paper and said, “We will have money on Friday, but we just need to see if we can get something to hold us over until then.” Immediately I knew this person was not winning with money.
What sayings make it clear you are financially unprepared?
“I’ll start saving tomorrow”. When you are more concerned about tomorrow’s needs than you are about today’s, you are bound to run into financial trouble. Starting early is the best investing advice you could ever get.
“How much are the payments?” or “Do you have an installment plan?” People who buy items based on the monthly payments and not the total cost will pay way too much for the item. It is impossible to get ahead when you can only think about this month.
“What is the biggest loan I can get to buy a house?” Loans can assist you to get things you want. Loans can also quickly financially suffocate you. Determine your own debt tolerance and never ask someone else to tell you how much you can afford based on what they are willing to give. Take control.
“I got this with no money down.” No money down means keep your dollar today because I’ll be back for $10 tomorrow. If you have no money to put down, you should put the item down and run away. Run as if your financial life depended on it – because it does!
“I plan to live off social security.” This does not sound like a plan. Instead, it sounds like a lack of a plan. To rely on someone else (even the government) to take care of you is irresponsible. Make your own plan because there is a possibility that the government’s plan will fail.
“If the price of “x” wasn’t so high I would be doing OK”. If the price of “x” is too high, you need to stop using it. The beauty of purchasing is that individuals have freedom to buy or not to buy. When prices go up, your consumption must go down. Control what you can and ignore the rest.
“If I got a raise, then I would start working harder”. This is not like the chicken or the egg. It is clear which comes first. The raise is at the end of the tunnel of hard work, not the beginning. Always work as if you were getting paid more than you are because there is a good chance that tomorrow you will be getting paid more based on your performance.
“I just got a hot investment tip, you want in?” If your broker gives you a hot investment tip, you know he has no idea what he is doing. If the tip is so hot, that person would sell everything and buy as much as possible. Furthermore, they would keep that knowledge to themselves. Good investors act regardless of the market conditions.
“My business plan is fail proof. I’m sure to make millions. This business is a cash cow”. There is no such thing as a fail proof business. Sure, some have less risk than others, but all carry a level of risk. Ask the right questions to reduce the risk and avoid all Get rick quick ideas. Before venturing into any business endeavor explore all the things that could go wrong, not just everything you wish would go right.
“I just heard about a program where you can make $100,000 a month in just 10 hours.” Ready for this? If it sounds too good to be true, it probably is. I don’t think I’m the first person to say that out loud. If everyone could get in on that gig ,why are there people working 40 hours a week for several hundred dollars?
“I don’t need insurance because I’m really healthy.” Since the number one cause of bankruptcy is medical bills it seems that insurance would be a wise choice. Insurance money is never wasted (even if you never use it) because the function of insurance is not to get money, but to protect your financial future. Just in case you are wondering, yes, insurance is biblical.
“I don’t make enough to give”. I hesitated to include this in the list, because I hate to think someone might be motivated to give out of guilt. However, giving is not based on your income. It’s based on your heart. Giving is healthy – even if you are in debt.
“If the government would just pass that law …” You sure you want to rely on the government for your financial future? Focus on events you can control. Spending is something you always control.
“Why should I learn about money? I’m broke.” You will be broke for as long as you refuse to learn about money. Don’t wait to have money before you learn about it. Learn about it today which will enable you to responsibly handle money. Bad money managers must learn about money.