There is an endless supply of things when it comes to spending your money. However, being financially healthy means knowing which expenses are reasonable and which are terrible. Anthony O’Neal, a national bestselling author and personal finance expert, has a list of what you shouldn’t buy.
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In a post on his website, he outlined eight things that can ruin your finances if you buy them.
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Costly Gifts
Purchasing expensive gifts for loved ones during the holiday season is one big contributor to financial stress. O’Neal urges parents, friends, and family members to prioritize thoughtfulness for Christmas.
Budget-friendly gifts such as a homemade candle, personalized photo album, or considerate handwritten letter can show someone you care without going into debt.
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Sales
Buying items when they’re on sale is an excellent way to get things you need at a cheaper price. However, sales are marketing tools engineered to make you buy things when you weren’t planning to just because the price is lower.
O’Neal explains that buying something you don’t need or can’t afford just because it’s on sale is a bad financial decision. It’s better to spend your money on items you actually want or invest it to grow your money over time.
Souvenirs
Traveling is one of the most popular activities in America, with nearly three-fourths of people taking at least one trip per year. Traveling is expensive, and adding souvenirs to your trip costs can add even more financial stress. O’Neal reminds travelers that the experience should be for the memories, not the items you buy along the way.
New Cars
New cars might look shiny and fun, but they are detrimental to your finances. O’Neal points out that your new car’s value drops by almost 20% when you drive it off the lot. This near-instant depreciation costs you thousands of dollars and can contribute to big trouble with your car loan.
When your car depreciates to a value lower than the amount you have left on your loan, it’s known as being upside down on your car loan. This predicament means even if you sell your car and put all of the money toward your car loan, you’ll still be in debt, paying off something you no longer have. The possibility of being upside down on a car loan should make you think twice about getting a new car.
Newest Models
Technology is always improving, and keeping up with the newest gizmos results in the depreciation of your bank account. Businesses market their newest models as must-have devices, making you feel the need to get a new phone, TV, computer, or video game console. The truth is, before you saw the advertisement, your current model was probably just fine.
Consumer Affairs reports that 11.89% of Americans upgrade their phones each year, with 55.47% upgrading every two or three years. This means thousands of extra dollars are spent on new phones that may have minor technical upgrades. Robbins says to fight the urge to upgrade every time something new is available.
Complicated Investments
With social media and the internet, you might get wind of seemingly surefire stocks or cryptocurrency coins set to shoot up to the moon. Many people fall for this and invest in things they have very little to no understanding of. Unfortunately, these investments often result in lost money.
O’Neal points out that over 60% of Americans who don’t understand basic financial principles are willing to throw their hard-earned money into these investments. To guarantee you’re maximizing your chance of making a profit, only invest in things you fully understand.
High-Priced Dates
The New York Post reports that among 2,000 Americans surveyed, the average person spent $3,025.12 on dates in the past year.
For many, it’s important to impress their date, but it’s possible to date without going broke. O’Neal explains that dates are about getting to know each other instead of showing how much you can spend. A coffee date, a walk in a park, or a reasonably priced dinner can save you a lot over time.
Loans to Loved Ones
When family members or friends are struggling financially, they may reach out to you for help. Giving them a loan with the expectation that they need to pay you back down the road may seem helpful, but it’s often a terrible idea.
O’Neal advises not to loan a loved one money. If you decide to help them financially, it’s better to give them money and not expect to get anything back. Hounding someone because they haven’t repaid their debt to you will strain or ruin your relationship. Giving what you are willing to part with may make it stronger.
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This article originally appeared on GOBankingRates.com: Financial Expert Anthony O’Neal Says To Stop Buying These 8 Things — Some May Surprise You
Content retrieved from: https://uk.finance.yahoo.com/news/financial-expert-anthony-o-neal-170104519.html.
