In Lifestyle

5 Money traps to avoid

1,608 Comments

2019 is coming up, let’s chat about something practical. Although I have a degree in finance, I have done stupid things with my money. Time to share <5 money traps to avoid>.

1. False sense of affordability

If you don’t have the equivalent amount of money in the saving account, no matter what your credit card limit is, that expense should not be considered affordable. *exception applies to life / health threatening events only

 

How often do we buy item/service that we don’t actually have the money in our saving accounts? What is the meaning of affordable? If we dive deeper into this question, it is more a question of how much disposable income / saving one have. Or more simply, if I throw away that amount of money into the bin, will it stop me from paying my bills or reaching saving goals? That to me is the ultimate indicator of whether I can afford something.

 

I fell deep into this rabbit hole when I was younger. It got so bad that I dig myself into paying credit A with credit B. So glad that those days are over. Both cards have been cancelled since 🙂

 

2. Abuse of the word investment

This one drives me nuts. Usually, I unsubscribe from any influencer/blogger etc. that uses the word “investment piece” or “invest” when they shill. Well, shilling is already pretty disingenuous. Firstly, suggesting buying products as an investment is an insult to the audiences’ intelligence. Buying something that has no resell value or potential to make an income out of is NOT an investment. It is called an EXPENSE. If I’m less strict, an item that will last a long time can be called an asset (but a depreciating one).

 

Secondly, acquiring random hedonistic items is called squandering. Stop encouraging or justifying an obvious hedonistic purchase as an “investment”. As a consumer, hedonistic spending is TOTALLY normal and is part of a capitalistic lifestyle. HEDONISTIC spending is OKAY. Recognise that it is one and move on. What is NOT okay is to guise it into an “investment”. It is a dangerous psychological spending trap.

 

Quoting <investopedia> *source: https://www.investopedia.com/terms/i/investment.asp

An investment is an asset or item acquired with the goal of generating income or appreciation. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will later be sold at a higher price for a profit.

 

3. Exhibition expense

These are what I call things that one spends on to seek approval / admiration / reaction from others.

 

For an example (yes, I was the dumb ass that did that): Once upon a time, I bought a luxury hand bag that I did NOT like… The reason for purchase? I was insecure and was hoping to seek social approval. repeat several times I was so lame that I wanted to impress a sales associate by buying a random item. Honestly, that bitch did not deserve that commission. Why prove myself to a random person? I was an insecure idiot with a spending problem.

 

Exhibition expense also includes services. Example: restaurants, spa, cruise etc. Social media has huge power in augmenting people’s behaviour and decision making. Before I decide to spend my money, I always have to pause and ask myself, “If I am not allowed to take photos, will I still be willing to pay?”

 

Moral of the story? Never seek self worth from others. It is not worth the money or the consideration. These days, I always ask myself before a purchase,

“Why do I want this item/service?

Am I going to enjoy this item/service?

If I am not allowed to take photos, am I still happy to pay?”

 

4. Cars

In short: depreciating asset with long term expense commitment

To me, unless there is no reasonable public transport, cars are the last thing to spend money on. Why?

  • Monthly insurance (money down the drain for most people)
  • Petrol (regular variable expense)
  • Car wash (unless you do it yourself, but you’ll still have to buy consumables like shampoo)
  • Maintenance / check up

 

Okay, if you live in Cape Town, I consider a car is a necessary purchase. The public transport is just too crappy (**I am from CPT). But is a fancy car necessary? Probably not. Being able to afford the credit (car loan) does not mean that one can “afford” a “better” car. If it is a necessity, buy with a minimal loan. If the car is of good health, you’re still going to get from A to B.

 

If someone judges my worth based on the worth of my car aka means of transport, that person is clearly unworthy to be a concern. Person like that is:

  • Too shallow
  • Probably have confidence issue (yes, don’t make his/her issue mine, thanks)
  • Holds different value to my own

 

On a more serious note, impressing people with a car is just psychotic. If a person is impressed by your car and be friends with you based on this… well, gold luck.

 

For inspo? Look up what the world richest people drive 😉

 

5. Significant other

That’s right. Choose wisely. Splashing out for fancy dates every time to woe someone special? Think again. This essentially condition the other person to a certain lifestyle / expectation. Long term relationship doesn’t work quite so well if the splurges are not actually a regular part of an existing lifestyle. Grooming someone into an expensive (or “high maintenance”) spouse is one of the worst decisions in life. I learnt about this one off friends who went through with divorces.

 

It is how will the other person react if (s)he got used to only having Michelin restaurants with you and suddenly realise that you are not comfortable to do Michelin restaurants each time you go out. Another example will be, the person got used to receiving luxury gifts each time you do a trip. Continuously being pushed to live beyond your means is not fun.

 

The point is: choosing a significant other is choosing a lifestyle and a spending pattern. If the person can be with you in tough (frugal) times, that’s an indicator of a real keeper 😉

 

So, this is it for 2018! Final post of the year!!! Thank you for reading. I wish you a Happy New Year and best wishes for 2019.

 

Signature small

Twitter / Instagram / Facebook / Google+

Author

Salut, I am Joyce. 40 something living in Paris. Appreciate little things and share giggles. Prudent, no nonsense reviews. #ExploreLaughRepeat

Related Posts

1,608 Comments

  3. veypy_pjoa Reply

    Вейпы и электронные сигареты купить можно в интернет-магазине [url=https://odnorazovie.shop/]электронки одноразки купить[/url].
    Электронные сигареты и вейпы приобрели особую популярность в последние годы, поскольку люди все больше хотят отказаться от обычных сигарет . Это связано с их способностью доставлять никотин без сгорания табака, что потенциально снижает риск развития определенных заболеваний, связанных с курением курение традиционных сигарет оказывает негативное влияние на здоровье и окружающую среду, поэтому многие ищут более безопасные альтернативы . Благодаря своему разнообразию и широкому спектру вкусов, вейпы и электронные сигареты смогли привлечь внимание многих вейпы и электронные сигареты предлагают разнообразные вкусы и дизайны, что делает их более привлекательными для потребителей .

    вейпы и электронные сигареты включают в себя набор компонентов, таких как батарея, нагреватель и резервуар для жидкости . Эти компоненты работают вместе, чтобы превратить жидкость в пар, который затем вдыхается пользователем процесс преобразования жидкости в пар основан на принципе нагрева, который обеспечивает испаритель, обычно имеющий форму спирали или сетки . Технические особенности вейпов и электронных сигарет могут существенно различаться технические параметры вейпов и электронных сигарет могут варьироваться, включая мощность, емкость аккумулятора и тип нагревательного элемента . Это вариативность делает их более привлекательными для пользователей с разными предпочтениями широкий спектр технических характеристик вейпов и электронных сигарет позволяет удовлетворять потребности разных пользователей .

    Безопасность вейпов и электронных сигарет является предметом постоянных дискуссий и исследований, поскольку их влияние на здоровье еще не полностью изучено . Регулирование вейпов и электронных сигарет разнится в разных странах регулирование вейпов и электронных сигарет варьируется в зависимости от страны, с различными законами и правилами . Это различие в регулировании влияет на доступность и маркетинг вейпов и электронных сигарет регулирование вейпов и электронных сигарет влияет на их доступность, а также на то, как они рекламируются и распространяются среди потребителей .

    вейпы и электронные сигареты доступны для покупки в различных магазинах, как в интернете, так и в обычных магазинах, специализирующихся на продаже электронных сигарет. При?? магазина важно учитывать репутацию и качество предлагаемых продуктов при выборе магазина для покупки вейпов и электронных сигарет важно обращать внимание на репутацию магазина и качество предлагаемых им товаров . Кроме того, цена и доступность различных моделей и вкусов также играют значительную роль цена и доступность различных моделей и вкусов вейпов и электронных сигарет влияют на решение о покупке и выборе конкретного магазина.

  4. pin_up_uz_pykn Reply

    пин ап как получить выигрыш [url=https://www.pinup5008.ru]пин ап как получить выигрыш[/url]

  8. pin_up_uz_yeMa Reply

    пин ап вывод через узкард [url=https://pinup5007.ru/]пин ап вывод через узкард[/url]

  12. Diplomi_urKl Reply

    купить диплом воспитателя [url=http://www.rudik-diplom7.ru]купить диплом воспитателя[/url] .

  14. reiting ryneta seo_vfOi Reply

    обслуживание и продвижение сайта [url=http://reiting-runeta-seo.ru]обслуживание и продвижение сайта[/url] .

Reply To reiting ryneta seo_vfOi Cancel Reply