January 3, 2008, 7:00 am

The Seven Sins of Personal Finance Part 2

by: The Financial Blogger    Category: Personal Finance
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Yesterday, I presented the first 3 Sins of Personal Finance. Today, I am closing this 2 part posts on those seven bad habits that many people have. The Sins of Personal Finance are lying within us and it is our responsibility to control them in order to be financially free. So the four last sins are Exuberance, Denial, Over-confidence and my favourite; procrastination!


Exuberance

Many Hollywood actors and actress or Rock stars are demonstrating to the world that they have money. They spend huge amount of cash on stupid stuff just to get in the newspaper and to show that they are sleeping in a golden bed.

 

sin city

They do it because they can afford it. However, it is not the case for the rest of us… poor mortal who pays 200 bucks to see them in concert!

I have noticed that many people like to show that they are doing well by buying luxury cars, bigger house or other expensive goods. The problem is that they cannot always afford their lifestyle. Credit is so accessible that everybody can ride a BMW; it’s only $400 a month for a 3 years location period! If you are making good money, start to invest, pay down your debts, help out people around you and then, you could waste your money on expensive goods 😉 Better be safe than sorry!

Denial

“Everything is good, I just have to borrow more money on my credit card and I will catch up next month”… This kind of thinking will help you digging your own financial hole. At the very moment you are under the impression that you are not capable of meeting your financial obligations, do not wait and seek for help immediately. Try to consolidate your debts and reduce your monthly payment, make arrangements with your creditors and revise your budget. If you ignore the situation, it will just get worst and you will shortly reach a point of no return; bankruptcy.

Over-confidence

There is nothing wrong in being confident about your personal finance. However, thinking that you are the Lord of Wall Street could destroy your investment portfolio pretty fast. I once thought that I could trade any stocks and making money out of it. You can read the result right here.

Taking your time to analyze the situation properly and not taking for granted that you are too good to make mistakes will surely make you save some money.

Procrastination

While sometimes I am over-confident, I procrastinate a lot when it comes to my own stuff. My wife always says that I am two different persons; the professional and meticulous employee and the all-over-the-place husband. At work, I can disburse a HELOC within a week. In order to increase mine, I took 2 months and a half!

When it comes down to money management, everyday that you wait is money that you lose. Keep that in mind and you should become more pro-active.

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