You Might Be a Financial Fool if…

  1. Your vehicle costs more than your after tax income for one year
  2. Your car loan has a duration of longer than five years, ie 60 months. That means you have purchased a vehicle that is too expensive for your budget and will be paying too much interest.
  3. You live in a rental apartment but drive a $40,000 to $70,000 vehicle. They depreciate in value whereas if you saved for a down payment on a house/condo/flat you would have an appreciating asset on your hands
  4. You go out for sit down lunch every day at work at a restaurant. This gets expensive. Bring your own lunch somedays to save a bit.
  5. You buy multiple $5 cups of coffee from Starbucks or some other chain each day. Yes, I understand you need caffeine to function but making coffee is not rocket science contrary to what Starbucks and other chains would have you believe. It’s water and coffee beans. That’s it. No different than making Kool Aid or instant juice from concentrate.  But I need a flat white non-fat two pump mocha for $6. No you need caffeine.
  6. You run a balance on a credit card. Really? You are paying 19% interest on some trinkets you probably should not have bought in the first place.
  7. You are using a store brand credit card because it gives you reward points and then end up paying 25% interest per year on the stuff that was a “good deal”. Well it wasn’t.
  8. You are choosing your college/university based on how the place “makes you feel” instead of looking at return on investment and how long it will take you to pay back the loans you take. You are there for an education and to train for a career. That should be done at the best and most reasonably priced school possible. You can discover yourself on a trip to Italy or France or Japan for a $2000 which is a lot of less than $60,000 per year at some slick brochure private school. But I want to study liberal arts! Ok then get a public library card. Those books are all there to loan out for free.
  9. You are spending all your money and not saving anything for a rainy day, a down payment on a property and retirement. What happens if you get laid off? We are in a recession.
  10. You have no real retirement savings meaning you are saving less than 10% of your income per year for retirement. Do you really think the government is going to take care of you? You plan to work until you are 70? How many 70 year olds do you see working at your local big name company? Very few! Because they get rid of the old timers who are expensive and replace them with young cheap blood. Do you plan to work at McDonalds when you are 65 and have some 22 year old manager telling you what to do? By then the job will probably be done by some burger robot anyways.
  11. Your idea of investing is putting money in savings account earning 0.01% interest per year. You are going to need to invest in some stock funds to get money to grow.
  12. Your investments consist mainly of bonds and bond funds earning 1-4% interest. Sorry buddy that isn’t going to cut it either for a comfy retirement when inflation is running at 2-4% per year.
  13. You buy expensive wine bottles off the wine menu at a restaurant. Those same bottles can be had for much less at your local liqour store or wine shop. Stick to the house carafe wine and get the the good stuff later cheap.
  14. When you go out you get the appetizer, full meal, desert and drink too. That’s pricey and a lot of calories to burn off the gym. Maybe skip the aps and desert and take half of the huge meal home for later. If you keep doing that you might need buy next size up pants too or spend lots of time at the gym.

So if you are a fool then what? Well you better develop a plan. Start by educating yourself! Then take action. You can do it!

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