You might know someone who earns a lot but still struggles to get by financially. There are some people who earn salaries that are three or four times the salary of an average person but still struggle with their budgets until the next pay check.
If you peruse celebrity magazines, chances are, you’ll come across an article about how a former A-list actor is now broke. The list is long, and there are many examples out there. There’s Mike Tyson who reportedly earned $300 million in his career but had to file for bankruptcy in 2003 after incurring $27 million of debt. Nicolas Cage is another example—he’s famous for being part of blockbuster movies like National Treasure[/i] and Con Air[/i] and he earned more than $150 million between 1996 and 2011. He eventually owed the IRS $13 million despite all the money he made.
Their spending habits are part of the reason they got into this mess. They kept lifestyles, and spent on things, that were way beyond their means. Tyson had pet tigers when most settled for an adopted cat.
These are just examples of bad financial habits that will sink anyone into debt. So, want to know if you’re bad with money? Let’s look at five signs that could tell you if you are or not.
Cristina Beltran is a blogger and at present she works as marketing staff at comparehero.my, Malaysia's leading comparison website. This portal helps individuals in making the best decision by comparing rates from different finance and insurance providers.
If you peruse celebrity magazines, chances are, you’ll come across an article about how a former A-list actor is now broke. The list is long, and there are many examples out there. There’s Mike Tyson who reportedly earned $300 million in his career but had to file for bankruptcy in 2003 after incurring $27 million of debt. Nicolas Cage is another example—he’s famous for being part of blockbuster movies like National Treasure[/i] and Con Air[/i] and he earned more than $150 million between 1996 and 2011. He eventually owed the IRS $13 million despite all the money he made.
Their spending habits are part of the reason they got into this mess. They kept lifestyles, and spent on things, that were way beyond their means. Tyson had pet tigers when most settled for an adopted cat.
These are just examples of bad financial habits that will sink anyone into debt. So, want to know if you’re bad with money? Let’s look at five signs that could tell you if you are or not.
- · You don’t save money – Whether it’s for an emergency or a college fund for your kids, there’s always a reason to save. Even if you’re single, you won’t always be productive. Retirement will come and you’ll stop working. Contribute to your 401(k) sooner and save the maximum amount that your employer will match.
- · You buy things you don’t need – Is your house getting full of things you don’t need? Is your closet full of clothes you never wear? Perhaps you can’t pass by a garage sale without getting something? That’s a sign that you’ve no self control and this can lead to financial problems. Going back to our example, Cage reportedly had 15 properties, including a castle in England that he never spent a night in. If you have family or friends that you trust, you might want to entrust your earnings to them every payday for a few months and ask them to only give you money for necessary expenses like bills and daily expenses. Getting a buddy to keep you financially fit helps motivate you.
- · You neglect to pay your credit card bill – A credit card is good for buying stuff that you can already afford so you can take earn rewards like cashback or air miles. But if you neglect to pay your credit card bills when they’re due, you’ll be charged fees and interest so that’s money going out of your pocket. Avoid charging purchases on your credit cards that are outside your budget. Sign up for email alerts from your issuer if they have this type of a service so you don’t miss a payment.
- · Overdrafting on your checking account – Here’s another unnecessary expense. If you charge more over your balance, your bank hits you with overdraft fees. Getting charged an overdraft fee is a sign that you’re not monitoring your checking account’s balance. Balance your checkbook, it will help you avoid these fees.
- · Getting unnecessary subscription plans – think premium cable TV or mobile phone plans. If you’re watching TV for just 30 minutes a day or if you’re not maximizing your data plan, you’re probably paying too much for a service that you’re not getting the most use of. Consider cutting your cable subscription and going for free TV. You could also go for lower-priced phone plans if you’re not maximizing the one you have currently.
Cristina Beltran is a blogger and at present she works as marketing staff at comparehero.my, Malaysia's leading comparison website. This portal helps individuals in making the best decision by comparing rates from different finance and insurance providers.