13 Money Moves That Scare the Heck Out of Me

Scary Money Moves

Are you scared?

If I ever found myself making one of these financial moves, I’d be frightened for my financial future:

1. Having kids and no life insurance. If you die without life insurance, your kids will, at a minimum, be stuck with your funeral bill. Get a simple term life insurance policy, even if it’s just $100,000.

2. Living without any health insurance. There’s a lot of noise about health insurance premiums being un-affordable. Don’t let that sway you from checking rates and looking into a high-deductible plan. If you can afford your iPhone and car payment, you can afford health insurance. This could be the difference between a $10,000 medical bill and a $1,000,000 medical bill.

3. Not having any money in savings. Having no cash savings cushion means you’d be relying on credit to help you get by in a bind. As long as you have a half-way decent income, you can live within your means and set some money aside for emergencies.

4. Having more than 10% of my savings in one investment. Having too many of your eggs in one basket leaves your savings at risk. Spread your money out (diversify) into several investments so that your whole world doesn’t crash when that one investment does.

5. Missing the company match on a 401K. If your employer has a 401K match, you’ve just been offered more money. Make sure you take advantage of it by at least contributing enough to your 401K to get the match.

6. Taking a loan from a 401K. 401K loans are a poor choice to fund other needs. Especially if that need is financing a lifestyle you can’t afford. Your 401K money is for retirement. Leave it be. Removing it from the account, even temporarily, puts you at risk for missed market appreciation and an instant payback requirement if you’re let go.

7. Not taking advantage of a Roth IRA. The Roth IRA is a way to save tax dollars on the money you invest for your retirement. Skipping the Roth IRA in lieu of a taxable investing account guarantees you’ll pay too much tax on your investment returns. Roth IRAs are easy to understand and open.

8. Using student loans to fund a worthless, expensive degree. If you’re going to go to college, do your best to pay some along the way, either with a part-time job, scholarship, or other college funding sources. If you do take out student loans, make sure you’re getting a degree with almost guaranteed earning potential (i.e. engineering, accounting). And for goodness sake, skip the private school.

9. Not knowing what’s on the credit report. Your credit report could be filled with all kinds of incorrect (scary) information. Make sure it accurately reflects your financial situation. If something scary is on there, your future employer or insurance provider might take note.

10. Not reviewing spending regularly. You do have financial goals, right? Good, well then make sure you inspect what you expect. Regularly look at your spending to make sure it’s accurate, and to check your progress.

11. Carrying a balance on a credit card when unnecessary. If you can pay your credit card balance in full each month, then do it! If you can’t, it means you’re living beyond your means. Stop it. Carrying a balance means you’re paying scary ridiculous interest rates to afford your big lifestyle.

12. Buying a house with no money down. We’ve all learned this lesson recently. If you don’t put any money down, you’re instantly staring at negative equity on your home. You also have to pay private mortgage insurance. There’s a reason a down-payment is a good idea. It’s a sign you’re financially ready for a home.

13. Thinking that one job/career is all that is needed. Seth Godin says we’re in a “forever recession.” Except for a few rare positions, most of us will have to pivot one, two, or several times in our lives to keep our earning stable and growing.

What money moves scare you?

Image by jelleprins

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Last Edited: January 18, 2013 @ 3:13 pm
About Philip Taylor

Philip Taylor, aka "PT", is a husband and father of two. He created PT Money back in 2007 to share his thoughts on money and to meet others passionate about managing their finances. All the content on this blog is original, and created or edited by PT. Read more about Philip Taylor, and be sure to connect with him on Twitter, Facebook, or view the Philip Taylor+ Google profile.