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Seven Common Financial Mistakes


1: Excessive/Frivolous SpendingGreat fortunes are often lost one dollar at time. It may not seem like a big deal when you pick up that double-mocha cappuccino, stop for a pack of cigarettes, have dinner out or order that pay-per-view movie, but every little item adds up. Just $25 per week spent on dining out costs you $1,300 per year, which could have gone toward an extra mortgage payment or a number of extra car payments.

#2: Never-Ending PaymentsAsk yourself if you really need items that keep you paying money every month, year after year. Things like cable television, subscription radio and video games, cell phones and pagers can force you to pay unceasingly but leave you owning nothing.

#3: Credit Cards
Living on borrowed money has become somewhat normal as an ever-increasing number of consumers are willing to pay double-digit interest rates on gasoline, groceries and a host of other items that are gone long before the bill is paid-in-full. Paying interest as a result of failure to pay off credit card bills makes the price of the charged items a great deal more expensive.

#4: New Cars
Millions of new cars are sold each year, although few buyers can afford to pay for them in cash. But the inability to pay cash for a new car means an inability to afford the car (being able to afford the payment is not the same as being able to afford the car). Furthermore, by borrowing money to buy a car, the consumer pays interest on a depreciating asset, which amplifies the difference between the value of the car and the price paid for it. Worse yet, many people trade in their cars every two or three years even though an increasing number of cars offer factory warranties that provide 100,000 miles or 10 years of coverage.

#5: Buying More Car Than You Need
Sometimes a person has no choice but to take out a loan to buy a car, but how much does any consumer really need a large SUV? Such vehicles are expensive to buy, insure and fuel. Unless you tow a boat or trailer, or need an SUV to earn a living, is an eight-cylinder engine worth the extra cost of taking out a large loan? If you need to buy a car and/or borrow money to do so, consider buying one that uses less gas and costs less to insure and maintain.

#6: Buying Too Much House
When it comes to buying a house, bigger is also not necessarily better. Unless you have a large family, choosing a home with 6,000 sq ft may cause you to pay for more than you need or use. Taxes, maintenance and utilities on such a big home will put a significant, long-term dent in your monthly budget.

#7: Refinancing Your Mortgage and Taking Cash Out
Your home is your castle. Refinancing and taking cash out on it gives ownership of your castle to someone else. It also costs you thousands of dollars in interest and fees. Smart homeowners want to build equity. They don't want to make payments in perpetuity.


I dont think there's any wrong with spending money.. we came to this world naked and naked we depart. Why bother to make all the money and not spend it.:confused:

The key phrase is DONT SPEND BEYOND YOUR MEANS! and build your nest slowly..

1. Make all the necessary provisions/buffers before you put aside money for investments
2. Understand the risks and consequences before you make any investment with your money.
3. Learn to walk before you run. Dont over invest.
2. Nobody can be right all the time. You aim is to achieve more 'correct' than 'wrong' judgements over a specific period of time and repeat that process over and over again.

The misery sets in when you have to crack your head to raise the funds to finance your mortgage and car loans every month. For those people who live from hand to the mouth the current times will be trying and they will have sleepless nights everytime the equity market dips.

For those who have managed their expensed within their their budgets then they are positioned to make some medium to long term investments in the coming months. They may choose to adjust their lifestyles to move in line with the current market condition but should not be overly worried.

There's nothing wrong to pamper oneself if one can afford it. As long as we spend within our means. Life is short! LIVE it!!


All the problems boil down to the fact that people will always be inebriated by a good economic run to the point of taking for granted that it will never end. I am an optimistic person too as I always believe that 'Today will be better than tomorrow.'