Bad Money-Management Advice to Avoid at ALL Costs!
Hello… it’s me. Wait a minute… no, not her. Instead, it’s your big-spending, no-saving, poor money-managing bad side! And, I’m here with some completely rotten financial advice for you. You know, since January is almost over, you might as well go ahead and forget those resolutions you made about avoiding my way of thinking this year. After all, tax season is here and you’re going to have to do something with that tax return anyway, right? Just for you, I’ve got five pieces of bad financial advice to remind you why you vowed to stop listening to my irresponsible self this year (Plus, our fiscally-responsible team provided some strong support to help you make sound financial decisions!): “Just pay your debts when you can.” As much as that horned-little voice in your mind may urge you to skip credit card payments or pay less than the minimum amount on your monthly statement when things get tough, you should NEVER do that. If you’re having a hard time meeting your monthly financial obligations, you should contact your creditor to find out if they will agree to accept a lower minimum payment. If your creditor consents, further protect yourself by requesting their approval in writing. “You should just use your home equity to eliminate your credit card debt.” When you’ve built equity in your home and you’ve also got some nagging credit card debts that you’d like to get rid of, it can be tempting to take care of those debts in one fell swoop by taking out a home equity loan. Unfortunately, all that does is create more debt. What’s worse is that if you fail to make your home equity loan payments, you also could lose your home. “If you want to boost your credit score, you’ve got to carry some debt.” Yes, regularly using your credit cards will help to build your credit score. But, under no circumstances do you need to regularly carry a balance on your credit cards. In fact, using your credit cards, then paying them off each month, is a great way to build excellent credit. Carrying a credit card balance won’t hurt your credit score, but that balance will continue to climb, thanks to the interest that accrues! “The mortgage payment is too high. If you stop paying, the lender will work with you!” If anyone tells you to stop paying your mortgage – for any reason – just walk away from them. In extreme cases, there may be some mortgage-modification programs that exist, but there is also something else that exists for people who decide not to pay their mortgages – it’s called foreclosure and that’s not even taking the ruined credit scores or racked-up late fees into account. Simply put, don’t stop paying your mortgage. “You’re way too young to start saving for retirement!” The bottom line here is that no one is ever “too young” to start saving money – for retirement or for any other reason! This includes everyone from the 20-somethings, who’ve just entered the workforce, to the 40-somethings, who are well into their professional careers. Retirement savings plans are typically low risk, but knowing you’ll be taken care of when you retire is an undoubtedly high reward! So, what do you say, well-intentioned, budget-conscious, dare-I-even-say frugal other half? Ready to have a little fiscally-irresponsible fun with your big-spending, no-saving, poor money-managing bad side? Or, has all of this bad money-management advice just created a little bad blood?! This post is sponsored by PA Preferred Mortgage: Pennsylvania Preferred Mortgage is a full service mortgage banker and is a member of the Prosperity Home Mortgage, LLC family. Specializing in residential and refinance loans, Pennsylvania Preferred Mortgage offers a wide range of mortgage products, including fixed and adjustable rate mortgages, jumbo loans, Federal Housing Administration (FHA) and Veterans Affairs (VA) loans, and renovation financing. Learn more at www.papreferredmortgage.com.
