i wish we all possess the superpower of being financially savvy no mishaps in our financial
decision nor dumb choices but let's be real we are as human as can be that means that
we do make mistakes with our money no matter how hard we work for it we fall into the same
stupid traps every single day today we will be looking at some ways people are dumb with
money you'll be as surprised as i am that you've probably committed these dumb mistakes
yourself but fear not we are here to rescue you and give you some tips and tricks on how
to avoid them 9.
free money equals reckless spending when it's mid-month on a friday night and you have plans
to spend the entire weekend indoors because you're broke as each of your party friends
call you to join them on a night out adventure you're adamant to politely decline the invite
your mission is going on smoothly as you've already declined three invites but as you
talk to your work colleague you receive a text the one you've been waiting for since
monday last week a bank deposit confirmation from a cousin you borrowed money from to keep
yourself afloat for the rest of the month it's at this point that all logical reason
leaves your body and you're overcome by foolishness you just got free money that has no strict
pay off time limits so you accept the invitation to go out with your colleagues you believe
that there's no harm in a single night out and promise yourself to spend just a small
amount from that money but when you wake up monday morning you're filled with regret and
despair since you spent a really good amount of that money you still don't have groceries
to last you till the end of the month and your gas is almost out this is just one of
the ways that most of us are dumb with money we treat bonuses loans and commissions like
that's money that you aren't accountable for in a real sense it doesn't matter how you
come about acquiring money whether it's a gift or a paycheck every dollar should be
treated with respect and put into good use eight living a lifestyle you can't afford
if you consistently watch our videos then you've heard us speak a lot about this topic
a large percentage of the population is keener to look rich instead of focusing on actually
being rich they buy designer bags shoes and even clothes just to look lush but are struggling
in debt because of these purchases you can't begin to imagine how many people are willing
to go into major debt to fit in with their crowd this spending trend has become so rampant
that mastercard has been on the top of the stock market for a couple of years for the
past 16 years it has realized only profits except the year 2020 alone which was due to
the pandemic statistics show that the average credit card debt is as high as six thousand
dollars monthly car payments are at five hundred and thirty dollars and don't get me started
on how much people are spending on dining out in vacations most of these purchases are
made on credit because salaries haven't increased that much over the years and many people still
feel the need to keep up with the a-lists i beg you not to fall into this trap because
you'll be in a never-ending financial rat race for all of your life trying to keep track
of your debt payments seven investing conservatively in your twenties the stock market is the biggest
pool to make money in 2021 but it's evident that not enough people are investing in it
they have this profound fear of being inexperienced enough but truth be told who does no one has
an understanding of the market that they can truly without a doubt predict a market crash
and even when the market does crash it surely will get back on track in time if you're under
the age of 30 you need to understand that there's great benefit in being in the market
over time rather than being on the sidelines choose to be smarter than the older generation
who were dumb enough to forgo investments in their 20s you're not too young to begin
learning the tricks and trades of investments also you are by far more flexible than all
those old folks you think have much experience go big and go wild with your investment portfolio
before responsibilities tie you down to only making well thought through investment decisions
if you win you'll be glad you took the advice if you lose you'll be glad you learned a lesson
you'll never forget 6.
signing contracts you don't understand this is by far the dumbest most common mistake
many people fall into whether it's signing your job contract loan agreement or mortgage
many folks don't take the time to fully understand what the terms say may god save you when you
realize much later that you're bound to an unfavorable contract with a nasty owner instead
of cringing your face at the thought of this you should start reading through every contract
handed to you no one will crucify you for requesting more time to read through a contract
in any case if need be have your lawyer go through it after you have it or give him a
copy and hear what he has to say about it ask questions about it so those unclear clauses
can be explained to you in a language that you can understand only sign the contract
when you're 100 satisfied and you've understood every inch of that piece of paper 5.
forgetting to cancel subscriptions our emails are filled with spam messages from advertisers
begging us to sign up for a free trial on different services while it's not a crime
to try out some of these apps or subscriptions we forget to unsubscribe to them afterwards
i've been a victim on many occasions where i see an interesting app and try it out only
to realize that it's not worth purchasing but i forget to cancel the subscription because
many times the fee is deducted directly from my card it's a hard purchase to track down
unless you religiously read through your bank statement every single month in a bid to steer
clear of this damn money move i suggest that you go as far as marking up your calendar
with subscriptions that need to be cancelled or set a reminder in your phone before the
free trial timeline runs out because being that precise is the only way you and i could
save ourselves four investing in something you don't understand over a long period i've
learned a few things on my financial journey that have become my principles in life a good
example of one of these principles is if i don't get it i don't buy it or in this case
i don't invest in it the dumbest thing you can do in your lifetime is investing in something
you have zero understanding of i'm talking of investing in understandable life insurance
that a broker is trying hard to sell you the probability of this type of insurance costing
you more without paying you back well enough for your investment is high and the person
who stands to benefit the most when you make such a decision is the broker three dipping
into your 401k there are two major reasons why people feel the need to dip into their
retirement savings parents see it as a sacrifice to ensure their children graduate debt-free
to pay off credit card debt i can't pick which of these two is the dumbest decision one could
make the first one is almost pathetic i know that sounds a bit harsh but let's be real
it is pathetic no matter how bad we want to ensure our kids are debt-free that cannot
come at the cost of your retirement your retirement is what will support your children moving
forward as they won't have to worry about providing you with a comfortable lifestyle
i'm not trying to be pessimistic but i have to put this out there what happens when you've
sacrificed all that only for your kids to drop out you'll be devastated and depressed
because you don't have a safety net on the other hand you're living with a dropout who
costs you about ten thousand dollars that's money you would have put into good use in
the future you should always remain unemotional when making these tough decisions now on to
the person who takes out some part of their money to pay off credit card debt i understand
that being in debt is scary and no one wants to be in such a circumstance but the worst
and most foolish way to solve your debt problem is to dip into retirement savings firstly
the extra charges from early withdrawals of your retirement fund will cost you heavily
as there are penalties put in place to discourage people from any early withdrawals your best
option is paying back the credit card debt little by little two indulging in something
horrible just because you paid for it the author of why people do dumb things suggest
that humans divide their money into different categories at the back of everyone's mind
is a vivid breakdown of what portion of the money goes into what a middle-class person
can have the categories broken down into utilities entertainment food and bills each of these
has a specified amount which their intent on ensuring that they break even on meaning
that they get their money's worth from the money they spend because of this factor many
people are willing to eat through a plate of horrible food with the justification that
they paid x amount of money for it and since most won't let any money go to waste even
if they got it on sale finishing that whole bag of stale potato chips that you got at
target for a couple of cents subconsciously means that you did get value for your money
but in the real sense did you get your money's worth you didn't enjoy how they tasted or
that wacky soap flavor as you swallowed then why did you put yourself through the torture
it's foolish to think that you can redeem the value of your money if you can just finish
the whole bag of chips it doesn't matter whether you throw it away or eat it you'll still have
bought something you didn't value or appreciate it's much better to spend a reasonable amount
on fresh quality food or service that you'll enjoy one borrowing money for school then
dropping out parents parents do not force your kids to go to university or else you'll
be left paying the price when things don't work out imagine convincing your child to
take on this challenge they're unsure of you promise them that you'll help pay at least
half of their tuition fee for the whole course but they'll have to take a student loan to
top up the rest only for them to realize midway that a degree isn't for them and they'd be
better off not going to uni worse they decide to drop out of school and venture into other
things noI wish we all possessed the superpower of being financially savvy, no mishaps in
our financial decision nor dumb choices.
But let's be real, we are as human as can be.
That means that we do make mistakes with our money.
No matter how hard we work for it, we fall into the same stupid traps every single day.
Today we will be looking at some ways people are dumb with money.
You'll be as surprised as I am that you've probably committed these dumb mistakes yourself
but fear not, we are here to rescue you and give you some tips and tricks on how to avoid
them.
9.
Free money = reckless spending
When it's mid-month on a Friday night, and you have plans to spend the entire weekend
indoors because you're broke.
As each of your party friends call you to join them on a night-out adventure, you are
adamant to politely decline the invite.
Your mission is going on smoothly as you've already declined three invites, but as you
talk to your work colleague, you receive a text.
The one that you've been waiting for, since Monday last week.
A bank deposit confirmation from a cousin you'd borrowed money from to keep yourself
afloat the rest of the month.
It's at this point that all logical reason leaves your body and you're overcome by foolishness.
You just got free money that has no strict payoff time limits, so you accept the invitation
to go out with your colleagues.
You believe there is no harm in a single night out and promise yourself to spend just a small
amount from that money.
But when you wake up Monday morning, you're filled with regret and despair since you spent
a really good amount of that money.
You still don't have groceries to last you till the end month, and your gas is almost
out.
This is just one of the ways that most of us are dumb with money.
We treat bonuses, loans, and commissions like that's money you aren't accountable for.
In a real sense, it doesn't matter how you come about acquiring money, whether it's a
gift or a paycheck, every dollar should be treated with respect and put into good use.
8.
Living a lifestyle you can't afford.
If you consistently watch our videos, then you've heard us speak a lot about this topic.
A large percentage of the population is keener to look rich instead of focusing on actually
being rich.
They buy designer bags, shoes, and even clothes just to look lush but are struggling in debt
because of these purchases.
You can't begin to imagine how many people are willing to go into major debt to fit in
with their crowd.
This spending trend has become so rampant that MasterCard has been on the top of the
stock market for a couple of years.
For the past sixteen years, it has realized only profits except the year 2020 alone, which
was due to the pandemic.
Statistics show that the average credit card debt is as high as $6000, monthly car payments
are at $530 and don't get me started on how much people are spending on dining out and
vacations.
Most of these purchases are made on credit because salaries haven't increased that much
over the years.
And many people still feel the need to keep up with the A lists.
I beg you not to fall into this trap because you'll be in a never-ending financial rat
race for all your life trying to keep track of debt payments.
7.
Investing conservatively in your 20's
The stock market is the biggest pool to make money in 2021 but it's evident that not enough
people are investing in it.
They have this profound fear of being inexperienced enough, but truth be told, who does?
No one has an understanding of the market that they can truly, without a doubt, predict
a market crash.
And even when the market does crash, it surely will get back on track in time.
If you are under the age of 30 you need to understand that there is great benefit in
being in the market over time rather than being on the sidelines.
Chose to be smarter than the older generation, who were dumb enough to forgo investments
in their 20's.
You are not too young to begin learning the tricks and trades of investments.
Also, you are by far more flexible than all those old folks you think have much experience.
Go big and go wild with your investment portfolio before responsibilities tie you down to only
making well-thought-through investment decisions.
If you win, you'll be glad you took the advice.
If you lose you'll be glad you learned a lesson you'll never forget.
6.
Signing contracts you don't understand
This is by far the dumbest most common mistake many people fall into.
Whether it's signing your job contract, loan agreement, or mortgage, many folks don't take
the time to fully understand what the terms say.
May God save you when you realize much later that you're bound to an unfavorable contract
with a nasty owner.
Instead of cringing your face at the thought of this, you should start reading through
every contract handed to you.
No one will crucify you for requesting more time to read through a contract.
In any case, if need be, have your lawyer go through it after you have it or give him
a copy and hear what he has to say about it.
Ask questions about it so those unclear clauses can be explained to you in a language that
you can understand.
Only sign the contract when you're 100% satisfied and you've understood every inch of that piece
of paper.
5.
Forgetting to cancel subscriptions
Our emails are filled with spam messages from advertisers begging us to sign up for a free
trial on different services.
While it's not a crime to try out some of these apps or subscriptions, we forget to
unsubscribe to them afterwards.
I've been a victim on many occasions where I see an interesting app and try it out only
to realize that it's not worth purchasing it.
But I forget to cancel the subscription because many times the fee is deducted directly from
my card.
It's a hard purchase to track down unless you religiously read through your bank statement
every single month.
In a bid to steer clear of this damn money move, I suggest that you go as far as marking
up your calendar with subscriptions that need to be cancelled.
Or set a reminder in your phone before the free trial Timeline runs out because being
that precise is the only way you and I could save ourselves.
4.
Investing in something you don't understand
Over a long period, I've learned a few things on my financial journey that have become my
principles in life.
A good example of one of these principles is; if I don't get it, I don't buy it, or
in this case, I don't invest in it.
The dumbest thing you can do in your lifetime is investing in something you have zero understanding
of.
I'm talking of investing in ununderstandable life insurance that a broker is trying so
hard to sell you.
The probability of this type of life insurance costing you more without paying you back well
enough for your investment is high.
And the person who stands to benefit the most when you make such a decision is the broker.
3.
Dipping into your 401k
There are two major reasons why people feel the need to dip into their retirement savings.
● Parents see it as a sacrifice to ensure their children graduate debt-free
● To pay off credit card debt
I can't pick which of these two is the dumb decision one could make.
The first one is almost pathetic, I know that sounds a bit harsh but let's be real, it is
pathetic.
No matter how bad we want to ensure our kids are debt-free, that cannot come at the cost
of your retirement.
Your retirement is what will support your children moving forward, as they won't have
to worry about providing you with a comfortable lifestyle.
I'm not trying to be pessimistic, but I have to put this out there: what happens when you've
sacrificed all that only for your kids to drop out.
You'll be devastated and depressed because you don't have a safety net.
On the other hand, you're living with a dropout who costs you about 10,000 dollars.
That's money you would have put into good use in the future.
You should always remain unemotional when making these tough decisions.
Now onto the person who takes out some part of their money to pay off credit card debt.
I understand that being in debt is scary, and no one wants to be in such a circumstance.
But the worst and most foolish way to solve your debt problem is to dip into retirement
savings.
Firstly the extra charges from early withdrawals of your retirement fund will cost you heavily.
As there are penalties put in place to discourage people from any early withdrawals.
Your best option is paying back the credit card debt little by little.
2.
Indulging in something horrible just because you paid for it.
The author of "why people do dumb things" suggests that humans divide their money into
different categories.
At the back of everyone's mind is a vivid breakdown of what portion of the money goes
into what.
A middle-class person can have the categories broken down into utilities, entertainment,
food, and bills.
Each of these has a specified amount which they are intent on ensuring that they breakeven
on.
Meaning that they get their money's worth from the money they spend.
Because of this factor, many people are willing to eat through a plate of horrible food with
the justification that they paid x amount of money for it.
And since most won't let any money go to waste even if they got it on sale.
Finishing that whole bag of stale potato chips that you got at target for a couple of cents
subconsciously means that you did get value for your money.
But in the real sense, did you get your money's worth?
You didn't enjoy how they tasted or that whacky soap flavor as you swallowed, then why put
yourself through the torture?
It's foolish to think that you can redeem the value of your money if you can just finish
the whole bag of chips.
It doesn't matter whether you throw it away or eat it, you'll still have bought something
you didn't value or appreciate.
It’s much better to spend a reasonable amount on fresh quality food or service that you'll
enjoy.
1.
Borrowing money for school then dropping out.
Parents!
Do not force your kids to go to university or else you'll be left paying the price when
things don't work out.
Imagine convincing your child to take on this challenge they are unsure of.
You promise them that you'll help pay at least half of their tuition fee for the whole course,
but they'll have to take a student loan to top up the rest.
Only for them to realize midway that a degree isn't for them, and they'd be better off not
going to uni.
Worse, they decide to drop out of school and venture into other things.
Now you're housing a school dropout who is knee-deep in student loan debt.
You're also devastated because you invested heavily into that degree that didn't reach
maturity.
Both of you are out there looking stupid cause of making premature, impulsive decisions that
cost you heavily financially.
Please, if you know your family has invested a chunk load of cash for you, to go to school,
be prudent and see it all the way through.
So, thank you all so much for watching and before you go, remember to subscribe to the
channel, and leave a like for that YouTube algorithm.
With that being said, have a great day and see you all in the next one!
w you're housing a school dropout who's knee-deep in student loan debt you're also devastated
because you invested heavily into that degree that didn't reach maturity both of you are
out there looking stupid because of making premature impulsive decisions that cost you
heavily financially please if you know your family has invested a chunk load of cash for
you to go to school be prudent and see it all the way through so thank you all so much
for watching and before you go remember to subscribe to the channel and leave a like
for that youtube algorithm with that being said have a great day and see you all in the
next one