14 financial moves you should never make
There are some things you should never do because if you do, you can get really burned. I'll admit that it's happened to me. In many cases you have to learn the hard way and that's a true life lesson that you only have to learn one time. That old proverb says "fool me once shame on you, fool me twice shame on me". Let's hope you never have to live that reality! Keep this list in mind so that when that dangerous day comes, you won't ever experience what many others have had to endure. Remember, never ever and I mean never do these 14 things!
1. Never, ever loan money to someone that already owes you money
We have all been there at some time. A good friend or relative is way down on his luck and really needs help and asks you for a "big favor". Somehow that usually winds up being a loan and if it is, you feel the pain and agree to lend the money. Sometimes we may even be super generous and give terms that are, well, some may even say stupid. Things like "pay me back when you get back on your feet" or "take your time, I'm not in any hurry". Not setting an agreement of terms and getting a signature for a loan can and will come back to bite you.
These kinds of loans seem to always be hard to collect and even worse, they can result in a request for loan #2. The rule here is simple: if loan one hasn't been paid, never go for round #2. You are a nice person but shouldn't be taken advantage of this way. Get everything in writing and make sure you get repaid. If the person is reliable, they will pay you. If not, write off the loan as a gift if you have to, but don't pour gasoline on the fire, ever!
2. Never buy a used car without having it checked by an expert auto mechanic
Buying a used car is a wise decision if you need a good value and frugality is important to you. After all, if reliable transportation is your goal, this is a way to accomplish that and save money too. A certified used car dealer means the car has been carefully checked and has a limited warranty. However, thousands of people buy used cars from individuals or from sellers on Craigslist and they can be buying a real lemon if they're not careful. All of these cars have no warranty (unless it's in writing) and are thus purchased "as is", buyer beware.
I always tell people, if you buy from anyone other than a dealer or certified seller, always get the car checked out buy a reliable mechanic. If the seller really has a reliable used car, they won't object to that and they should be willing to split the cost with you to make the sale. If they won't agree, just look elsewhere. Never, ever do otherwise!
3. Don't buy high octane gasoline for your car
Here's one many people just don't get. If you think that premium gasoline means it's better quality or will improve your mileage or be better for you engine, think again. Unless your car requires premium gasoline stated so from the manufacturer, you are just wasting your money and paying extra...up to 30 cents per gallon, you do the math! Almost every car will operate just as well or better with regular gasoline and would never benefit from premium. The rule here is: don't fill'er up with your hard earned money and premium gas!
4. Please don't ever pay just the minimum on your credit card or fail to pay at all!
The damage that is done to your finances by making minimum payments to your credit card may take years to recover. Making a payment of the minimum $25 on a balance of just $1,000 can wind up taking you over 5 years plus interest to pay off in full. While paying the minimum on a rare occasion is better than not paying at all, never ever make that your goal. Missing a payment or taking years to pay off your card is a plan to fail so don't ever, ever plan to fail!
5. Don't forget to ask for a discount when you make a big ticket purchase
If you are a shopper like I am, you have learned that almost everything can be negotiated. Asking for a discount is something you should always do on any big ticket purchase like a car purchase, appliances, car and homeowner's insurance policies, credit card interest rates, cable packages, etc. The worst case scenario is a "no". However, in almost every case, after a salesman has spent his valuable time with you, he may be willing to give you a discount to save and close the sale. There are tricks you can use such as the time of the month you shop or the day of the week or even your customer history and your loyalty to the business. Whatever the ploy, always ask. It will never cost you a penny to try!
6. Do not lose track of your bank account balances
Don't be lazy or disorganized, please. Keep accurate records of all your bank transactions if you use checks or even online payments. Overdrawing your checking account is very damaging, costly, and inexcusable. As a former bank manager, I never saw or experienced a bank error that produced a mistaken overdraft. It was always due to a customer not recording his transaction or knowing what the extent of his spending was on an active account. That leads to overdrafts and fees. In some cases, a persistently flawed account will wind up being closed by the bank and that should never happen.
Keep accurate records and know what's in the pipeline even if it hasn't yet cleared. If you draw it online, at the ATM, with your debit card, or write a check to buy something or pay a bill, consider that money gone immediately no matter what day it is. Otherwise you will receive a very rude and expensive surprise.
7. Say no if you're asked to lend your car to someone
Lending your car is a real no-no unless you are in the car with the person while they are driving. Otherwise, you are at high risk. An accident or a violation can be assessed against the owner of the car even when you aren't the driver. It's bad enough to get a ticket or be involved in an accident if you drive, but letting someone else be the party that causes you damages, injuries, and fines is just not very smart. Just say "no, I can't take the risk". That's why they have taxis, Uber, and Lyft!
8. Don't forget to take pictures of any auto accidents you are involved in
Speaking of accidents, this is really a no brainer. You have a smartphone with a camera, so use it. So many people don't record what may be important evidence if there is an accident and it can prove to be a real aid if the matter involves a ticket, injury, or court time. It may only take a minute but it will save you hours and hours of aggravation in the long run.
9. Don't skip out on your mandatory health insurance
It's the law now in the U.S. that you must have health insurance (or an equivalent like a health sharing ministry) otherwise you will be paying a surcharge on your income taxes. Why do that and take a risk? Your health insurance is important and a safety net in the management of your health and well-being. It saves you money if something does happen and it can provide real peace of mind even if you are currently in tip-top condition. Besides, giving the money for no reason to Uncle Sam is just not a good idea!
10. UGH! Never ignore or fail to file your Federal Tax return (at least file an extension)
Once again, it's a federal law no matter what Wesley Snipes and his attorneys say! Even if you have a small or no tax bill, the government doesn't excuse you and I and recommends filing a 1040 in all cases. You may discover that you are entitled to an EIC (Earned Income Tax Credit) even though you didn't owe a dime or even pay any withholding. If you did have withholding, it's the only way to get your tax refund if you have one so just do it.
11. Never skip on your medications to save money
You have probably heard about seniors and others who are having trouble affording their meds and "skip" dosages to save money. Not only is this dangerous practice, it will wind up costing you even more if your health conditions worsen...believe me, I know. There are many options for you to use like generics that are cheaper, pill splitting of a higher dosage approved by your doctor that can stretch your supply, or even senior discount plans like PAAD here in NJ (check your own state for this kind of program). Drug companies may offer free or discounted programs if you qualify so investigate the manufacturers' websites for information on that before you do something rash! In addition, programs like Medicare Part D and discount prescription drug cards (free) should be on your list of options instead of forgoing your meds.
12. Don't lend your credit card to someone
Your credit card is just that...yours. It belongs to you and any "authorized user" who has their own card. Lending your card to someone else is an invitation for trouble. If you do it, you do it at high risk. Your bills can be run up by someone in just one an afternoon and in the long term your credit may be ruined! If they don't have a credit card of their own, there's probably a very good reason. Don't be fooled.
13. Never sign any document or contract without reading and understanding it first
When you sign a contract you are legally bound to it. It's your responsibility to read and understand what you are getting yourself into doing. If you think you can just walk away from a deal that you find out later that you don't want or like, think again. You may wind up in court and have penalties, fines, and even worse if you act out of ignorance. Get an attorney if you must to review a contract and then only sign when you're completely at ease and satisfied with all terms.
14. Never lie on a job application
People think that they can enhance their job application or fudge their way through a job interview without getting caught. While there are some legit ways to make your work experiences more appealing, lying about real facts isn't one of them. With the security systems for hiring and investigating potential employees in the 21st century, you are bound to be found out if you lie. Doing that will more than likely result in your termination and a big black mark on your record. Losing a job for other reasons, even a poor performance, can be explained if you are prepared to be honest. Never lie. It's cardinal rule #1.
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