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Warning signs that you're headed for financial ruin

Posted Aug 26 2008, 01:49 PM by Karen Datko
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To borrow a phrase from Dave Ramsey, bad financial behavior has become acceptable and "normal." Are you engaging in all-too-common practices that can lead to ruin?

"Mr. ToughMoneyLove" of the deliciously snarky Tough Money Love blog describes 10 common financial practices that really should be avoided. For example: "You are comfortable being upside down." Somehow, owing more on your house, car, etc., than they're worth has became routine, Mr. ToughMoneyLove laments.

Here are a few more samples from this exceptional post, called "10 warning signs of a normal financial life":

    • You brag when you buy something with no money down.

    • You think repaying the loan you took from your 401(k) is an investment. "This is nonsense," Mr. ToughMoneyLove writes. "Please don't go there."

    • You refinance your house to get cash to pay off debt. He says, "Uh ... what part of 'debt' don't they understand?"

    • "You spend more time monitoring your credit score than you do evaluating the performance of your investments."

    Bonus: If these situations seem all too familiar to you, you might want to take advantage of a free opportunity at MSN Money to pose questions to a certified credit counselor.

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    Comments

     

    I'm 78 and instead of saying here is what to avoid, let's say what to do. No matter how much it hurts save money every DAY. Put it in the bank or into a US Savings bond. Get the habit of saving. For every dollar per day that you put away, you will have that dollar plus interest for a day when you retire. Your savings will supplement your social security when you retire. Good Luck.

    George Fallos (Posted 09.05.08 2:22 PM ) Report Abuse

    My suggestion to all regardless of their age is to at least take the 401(k) limit that their employer will match.  This is free money, plus your 401(k) contribution reduces your taxable income.   Most companies will allow you to borrow from your 401(k) if you have an ememgency.  We spend too much money for fancy cell phones and  tex messages.  I suggest get a basic phone that cost less and use the money saved to buy stock in the cell phone companies instead.

    Ann Webster (Posted 09.09.08 2:19 PM ) Report Abuse

    I am 32, I do not judge but others my age judge me.. WHY? Because I live in a mobile home (which is paid for) Drive a car that is 10 years old (which is paid for) I live on 22 acres of beautiful land (which is paid for) I carry a pre-paid cell phone that costs me around 10 dollars a month.  Ok, so, I may not look as rich as they do. BUT I have savings. My son will be able to go to college without student loans. If I get to live to 80 I will be able to eat. Doesn't that make me the rich one?

    PH (Posted 09.12.08 9:05 AM ) Report Abuse

    To Ring of Jade:  If we are going to point fingers at number of homes people own, let's not just *cough* blame McCain.  There are MANY in both political camps who are wealthy beyond measure.   Look at the entire picture from Democrats to Republicans PLUS all the wealthy actors and actresses who actually think that having money makes their opinion count more than the average American.  Marty and AL, good suggestions:  People do need to take responsibility for their own actions.   People also need to stop tying to  keep up and live within their means.  Americans, for the most part,  have become accustomed to instant gratification and have no concept of saving to buy something.

    sue (Posted 09.28.08 9:17 AM ) Report Abuse

    you have 200000 bond matures oct 09 with ford motor credit corp, worth 145000..do you sell or gut it  out to maturity???

    tony b (Posted 12.25.08 10:23 AM ) Report Abuse

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