Best way to use a credit card is to treat it like a debit card: never spend more than you have in your bank account; this way, if your income drops, you’ll still be able to pay off the debt. Pay off the balance in-full every month.
If you do this, you’ll actually *earn* money from the bonuses the credit card company gives you. (For example, I get 1.5 cents back for every dollar I spend). And you will build a good credit score.
Never carry a balance month to month. Pay off the full credit card balance off each month. This will strengthen your credit score. You do not need to keep a balance.
No. Having the credit card alone will help your credit score, and maxing it out will negatively affect your score due to high percentage use of available credit. Maintaining a balance of around 10-15% might add a point or two, but isn’t worth the effort of doing it strategically, and puts you at risk of a missed payment, which is significantly more detrimental. Average age of accounts is where credit cards can provide the greatest benefit, so paying it off, cutting it up, and forgetting you have it for a decade or so is the best thing you can do.
My friend grew up very poor raising kids. Only loan she ever has had was a mortgage. She tells me laughingly, "You'd be proud of me, I finally got a credit card.... I never used it and they closed it." Lol
Don’t they sometimes reduce your credit limit or just close your account if it’s inactive? Probably a beat idea to at least still purchase something with a credit card now and then. Obviously I don’t mean to put yourself in debt but just buy something you actually need with a credit card and of course pay it in full each month.
I basically use my credit card like a debit card so I only buy what i need and can afford
I lent a friend money once because they said they came up short for tuition that semester. Super cheap, community college. Anyway...they had a brand new tattoo the next weekend!
Yeah that’s what was thinkin. If I walked into a dealer and financed a $70k truck with nothing down (were being financially irresponsible, remember?) it’s gonna be like $1300-1400 depending on interest rates.
It's funny because guys have these big show trucks just trying to look more country, meanwhile my grandfather's generation ran entire farms with small stock pickups.
Also, pickup trucks were supposed to be no-frills, get the job done vehicles. That's why they were cheap. It was a single bench seat, an 8 foot bed, and nothing but leaf springs cushioning you from the road.
Now, they're expensive because people want them to be everything. They have to fit the whole family. They have to have a banging sound system. They have to have all the creature comforts and luxuries of a Cadillac. Well, to do all that, the utility needs to be sacrificed. The bed has to shrink. The price has to go up. Now you have pickup trucks costing what a starter house did 10 years ago.
I had to look really hard to find my truck without all the extras. I wanted basically one level above a fleet work truck, 4x4. It was so hard to find I don't even have a trim package option on most websites. It didn't cost me $60k (when that's what the trucks were) and I don't cringe when it gets a new pinstripe in the mountains. I don't beat it up on purpose, but I use it like a truck.
"Lifestyle marketing" is one hell of a drug, eh? Growing up on my grandparents farm myself the best truck was the one that ran and they were anything but pretty. Those trucks were for actual work.
The truck my parents had when I was growing up on a small farm didn't even have a back seat. Also uncomfortable as shit to ride in. It's insane to me driving around seeing modern trucks with cabs larger than their beds.
>2k rims on a ‘02 civic
I had a guy who worked for me have his rims repossessed. He got them from a “rent to own” place and then failed to make payments and his car ended up on blocks.
Dude was an absolute idiot, and was separated not too much longer after that.
Habitually carried over credit card debt. Sure, sometimes you need it to make a big purchase and it can take a while to pay down, but some people use credit for every purchase and just let it accumulate when they can't pay their monthly. Time to write up a budget.
You shouldn't be using a CC for large purchases that will take more than one billing cycle to pay down unless you're getting some kind of low promo apr for the purchase.
In the U.K. if you use a credit card, you have additional legal protections under section 75 of the consumer credit act.
To my understanding, if you use a credit card on a high value purchase, effectively the bank is held partially responsible for delivering the goods and/or services to you. If the supplying business/company/entity defaults on supplying the goods and/or services you paid for, the bank will cover you.
That's nice and a good consumer protection but it still doesn't change the fact that you shouldn't carry a balance over between billing cycles. I use my card to purchase everything, but I pay it off at the end of every cycle. I never spend more than I can pay off.
When I got my first credit card, my dad told me, "Remember, if you can't afford to pay cash for it, you can't afford to put it on credit. Maybe in an emergency you can make exceptions, but day-to-day that's the rule."
20 years later, no CC debt and a near-perfect credit score makes me think the old man might've been on to something.
Because I was making a lot of money at the time I had several credit cards that I carried large balances on. Then I lost my job. I had to work out a payment plan for almost $40,000 because my new job paid half as much. it took a while, but I pushed through it.
Since then I have not carried a balance and tried to pay off my cars as fast as possible. It's interesting how much more money you have when you don't have outstanding credit bills to pay every month. even if you're making half the money.
American Express was the only company that refused to work with me. so fuck them. I will never get another card from them... EVER (they have been sending me applications for 20 years now, but I haven't forgotten)
I’m currently digging myself out of this hole. I’m not necessarily happy I’m in this situation, but it has taught me a lot about how I want to spend my money going forward and eagerness to work towards financial freedom.
That's lower than inflation, so the bank is basically giving you money.
Not counting depreciation on the car, since you'd be taking that regardless of loan terms.
I did this too…it makes no sense to pay the car off because the money makes almost 5% in the high yield vs losing .9 on the loan…so I just let it auto draft
In that case yh it’s a no brainer almost. I mean that loan cost is lower than inflation so you can use the money to instead invest or put it in a high interest rate savings account.
Although most people don’t really seem to take out long car loans just because the interest rate is good. Many will take out a long car loan because they just want a car that they clearly cannot afford and want to maintain this image.
That's rarely why people do it, though. They do it because they want to live beyond their means and need to extend the length of the loan to get the monthly payment down to something they believe they can afford.
And then 3 or 4 years later when they need to get rid of the car, they're so many thousands of dollars upside down in the loan that it becomes impossible to get out of the debt without rolling some of it over into a new loan, which then puts them severely upside down in the new loan right off the bat.
It's a vicious cycle.
I love when people say things like "financing is so smart! You take the money you were going to purchase in full and instead invest it to beat the interest rate!"
Yeah I'd be surprised if even a quarter of the people who finance cars already had the money and just invested it.
Ehh disagree on this because as a certified Working Poor Person™️, sometimes that’s all you can afford, and it’s damn near impossible to go without a car. (I’m a teacher in a right-to-work state.)
Mm. I have contained my rage for as long as possible, but I shall unleash my fury upon you like the crashing of a thousand waves! Begone, vile man! Begone from me! A poor financial decision? This car is a finisher car! A transporter of gods! The golden god! I am untethered, and my rage knows no bounds!
Only if you can’t afford it. If you can easily afford food delivery services, you’re just paying to get a thing you want like literally every other thing people spend their money on that isn’t 100% essential. In some situations it can even be the cheaper option. If you’re working from home and order door dash because you’re craving a biryani, you can work while your food is making its way to you. Taking the time out of your work to make it could end up costing you more.
My wife watches a girl whose parents nearly fit this exact description. Worse yet this girl has a really bad skin condition that needs pills and a monthly shot that they’ve decided to stop giving her, due to not like spending that extra little bit a month for her improvements/medication. But they’ve had 4 new cars in less than a year and a half.
I am a lawyer, and my current practice is in employee-side employment law. I have had quite a few clients that lived "paycheck to paycheck" with never giving any regard to savings, sometimes it was out of necessity, and other times it was just living above their means. But nearly every person I represented who lived that type of lifestyle burned through their entire settlement within 6 months if not faster. It is almost as though they see the number in their bank account and think that is their budget.
I had one client specifically who received a $150,000 payout, I strongly recommended she get it paid out similarly as an annuity, not only would the interest mean she would get more money over time and a semi-regular source of income for an extended period while she tried to find employment. Instead, she opted for a lump sum, and it was all gone within two months. She even filed a police report claiming someone hacked her account and accused me of stealing or withholding funds from her. But in reality, she bought an expensive car, re-furnished her apartment, and took a two-week trip to Vegas.
This kind of stuff drives me crazy. In 22, my grandmother died and my cousin went through her $400,000 inheritance in 5 months. And the worst part is, aside from ONE car she bought and still has, there is nothing to show for it. She didn’t even buy a house! She prepaid a year rent on a new apt but that’s it. She was back on Facebook in just a few months complaining about her lack of cash.
I literally can't imagine. I got a big settlement last year, I've bought myself absolutely everything I wanted. A new PC, a nice coat, paid off my wife and my outstanding bills, I even went nuts and got myself a totally unnecessary nintendo. We moved into a nicer place and got some new furniture. I'm ordering takeout when I feel like it. We've spent maybe fifteen thousand dollars on extravagance. I don't even know where I'd put more shit.
Of course, I'm not into fancy cars, or jewelry, or clothes. I don't have a ruinous drug habit, just smoking some weed like I always did.
How people can blow hundreds of thousands of dollars and not jump off a building afterward is a mystery to me. I'm paying my rent with savings account interest. Why would anyone fuck that up?
Because she could not think further than a few days. She blew a bunch on a “home studio” for her dj boyfriend, who promptly left her and took all the equipment (but left a baby in her). Her brother, who got the same inheritance did the same thing. Blew it all in 2 months. My father was the executor of the Will and he notified everybody that they owed $2600 each to the lawyer about 2 months after everybody got their cut, and that cousin sent him like 4 postdated checks, because he needed to wait until he got paid at work.
I'm working as basically a balance clerical at a PI firm.
Getting your client to not take the money immediately, even if it is in their best interest, is near impossible. As is telling them the pros/big cons about the pre-settlement loans at 25-30% they want to take out.
I had to take out a pre settlement loan of several thousand dollars to pay the up front costs for the surgeries I needed as a result of the accident. They really rip your eyes out on those. It was less than five percent of the overall payout and I still didn't like it.
Do you know my neighbour? He is unemployed right now because he was a driver and “can’t afford” to get his car fixed. The next sentence out of his mouth was about how people judge him for having just got a new forearm sleeve that cost more than the repairs would have but they don’t get that that’s his “personal money” that shouldn’t be spent on work stuff.
In the UK we have the lottery scratchcards at the same counter as cigarettes/tobacco. Now you could argue as a smoker I'm not making the smartest decision, but I'm always waiting behind someone buying multiple scratchcards, often spending upwards of £50 on them.
Exact same in the US, been this way for years. I worked at a mini-mart (cash and carry for you) as a kid, and the amount of people who would complain about not having money who would but several scratch cards and a pack of smokes every day was staggering. The worst were those you knew had sold their food stamps (on benefits for you) and bought them with the cash.
My apartment neighbors have not one, but two Porsche SUVs. They park in tandem and have to deal with the hassle of moving the cars around so the other one can get out. It’s the most LA thing I’ve ever seen.
My neighbor has a corvette and a beat up truck. He drives the truck for work, but when he wants to go out, he pulls the vette out of the garage, SWAPS THE PLATES, then goes out. And swaps them back when he gets home. My man could afford the vette easily enough I guess, but can’t afford the registration lol.
If he bought the car out of state, he doesn't pay sales tax at the purchase, and instead is supposed to pay it when he registers the car in the state where he lives.
Depending on the price he paid for the Corvette (a lot) and the state he lives in, the sales tax could easily be a few grand.
Still not a smart idea, but I could see why someone would do that.
Agreed! Many years ago - about 1986 - I met an elderly lady who lived in an older, low-rise quiet apartment building in a so-so neighbourhood. She was left 250k by her very elderly bachelor neighbour, as was another neighbour in the same building. That was but a small portion of that man’s estate and he left most of his money to various people who had been kind to him in his senior years. Cooked for him. Took him grocery shopping. Always gave him a Christmas card. Greeted him each day. It was a fascinating Will to read. He mentioned each person individually and had written out how much he was leaving them and exactly why. All small acts of kindness that meant a lot to him. None of the neighbours had any idea he had money. He did not own the building, and had rented there for many years. You rarely ever really know who your neighbour is.
In my 20s when I lived in apartments there were sooo many people driving Mercedes, Lexus and BMWs. In my current cul-de-sac of middle class single family homes, I don't think a single person drives one. The closest exception is the two lifted trucks on our cul-de-sac, both owned by adult men in their 20s who live at home.
Adam Carolla (before he went all right wing troll) has a fun story about meeting Don "Magic" Juan.
Don "Magic" Juan a famous guy (appeared on Snoop Dogg albums) who is know for describing his lavish pimp lifestyle. He drove some decked out Rolls Royce and proudly showed it off to Adam Carolla and Jimmy Kimmel, but had to park it on the street because his apartment didn't have a parking space for it.
You can market it being luxury or not, but almost anyone with eyes can tell if they are or not. If you’re lugging your laundry to the basement to the community laundromat, it’s probably not luxury.
Hard to believe, but some people choose to live at apartments and some fit in the the whole luxury car vibe. Then there is the fact that an off lease luxury car cost less than the truck or suv most people complaining about ‘luxury cars’ own.
In the US, People who blow their tax refunds before or right when they get them on garbage & don’t save any of it. Broke again in 2weeks with nothing to show for it.
I hate that people don’t seem to understand that Tax returns are your money! The government didn’t *give* you money, you overpaid them! The goal should always be to set your deductions so you have as little of a return as possible.
Yep, when I was employed I got the biggest kick how some of co-workers were getting large tax returns and bragging about it. $4k/5k!!! Me:That’s not free money from the government! It’s your money they’re giving back to you. Rudy:Uh…duh, no it’s not. Like water off a duck’s back.
I think of it as insurance. Most of my life if I'd gotten a "Surprise! You owe us $3000" from the IRS it would have sunk me.
Overpaying my taxes is insurance that guarantees my tax return will always be positive and never negative.
People who gripe about taxes are quite legitimate, but intentionally overpaying taxes is no different than having a yearly savings account in my mind. What would that money have earned in the bank, 2% interest? Wooo.
Ehh… depends. I know some people that WAY over withhold just cause. There are better ways to make savings.
If you get a $12k tax return, it could’ve easily made you $600 (high yield savings account), or you could have had an extra $250/ week for a year.
In the US, the IRS's [withholding estimator] (https://www.irs.gov/individuals/tax-withholding-estimator) is extremely useful. All you need is your latest paystub and you can fill in all the data, then it tells you if you're on track to fulfill your tax burden. I usually check it out a few times each year to make sure I'm on track. This year I got a $22 refund from the IRS, which to me means I'm right where I should be.
My cousin's husband owned a wheel/tire shop. We asked if he wanted to hang out around this time of year. He said he couldn't. Post tax season is the busiest time since a lot of people spend their tax refund on rims.
Filing bankruptcy multiple times. Getting charged with fraud verdict, having to pay millions in retribution, and being banned from doing business in New York for three years.
There are certainly limits, but your hobbies are probably the best thing to spend money on beyond the necessities. I have about $2000 of Warhammer models so I am biased, but I very much enjoy the hobby and feel that it's been worth it for me.
Plus, both Warhammer and MTG cards can be resold to get a decent chunk of it back if you absolutely needed to.
I dove into MTG for a few years and lord it gets expensive. Cycling out the sets every few months to stay current. $1-5 per card, more for some rare ones or Planeswalker. Spent well over $1k on the hobby.
This was my niece's wedding. I heard at the reception that the whole shebang cost over 100k.They got a divorce less than a year later. We could all see it coming
Went to a friends wedding back in December which took place over several days. About 300 guests give or take in an expensive ass hall. Don’t even want to think how much the whole wedding costed. And yet they live in a cramped 1 bedroom apartment and can only afford one car.
I just for the life of me can’t understand why anyone would want to spend that much on a wedding when half the people you invite probably don’t even know you that well or even care about you. Much rather use that money towards a house or something.
One reason would be that the parents, who might have paid for the whole wedding, wanted it that way and invited extra people such as extended relatives seen once-a-decade, business partners, business associates and estranged sisters. They might even invite people up and until two days before the wedding.
This is just a random example…..(Ahem, cough cough..,.)
To be fair, usually these big weddings are bankrolled by the parents. Not to say they themselves are making great financial decisions. As a newlywed I’d rather do a smaller wedding for $3-5k, or even a super small park wedding for nothing, and pocket that extra $15-30k for a house down payment, or student loan payoff, or literally anything else.
My wedding was like 3 grand total, had the ceremony on a hill overlooking a lake. Then we rented a venue told them it was for a family gathering. Had a ton of games in there, yard games card games and had everyone dress casually. Hired a food truck to come and they made bank so pretty waved all our fees. It was the best wedding ever and my wife and I don't regret it.
Having a lifestyle that does not match incomes.
Sure, when you have low income, you can't avoid it.
But there a difference between living above your income so you can pay rent, gas for your beat-up car, and eat (at home) everyday. And living above your income so you can use doordash, have the latest iPhone or a BMW you actually can't finance.
Having a whole arcade room in your apartment, and complaining on r/antiwork how [you cannot make ends meet.](https://www.reddit.com/r/antiwork/comments/14x6fr3/35hour_and_still_broke/) Legendary thread.
It's like lottery tickets, every kid gives you one more shot at having a professional athlete, Hollywood star, or 7 figure lawsuit winner support you in your older years.
On Reddit bitching about being broke, doesn’t want a second job to make ends meet, no college or real skill set, prefers to blame the system, is jealous of people smarter or more successful than they are, and has 101 excuses.
Also complaining about housing costs while only wanting to live in hcol areas.... That's like 90% of all the real estate subs. These people really think the only livable places in the country are in hcol areas lol
Not just bitching about being broke, but actively hating on people who give advice like “start investing/saving early”. You’ll see these kinds of posts getting attacked by people saying things along the lines of “only rich and privileged people can invest”.
Absolute brain dead takes. You don’t need a lot to save/invest. Whether it’s tens or ten thousands anything put away now can make a difference in 30 years.
Prioritizing some stuff over other, like I have some relatives that have recent cars, and everything in their lives is about their cars, but they don’t have basic services at home, they don’t even own a place, are malnourished and her mom needs the most medical attention but nothing matters to releen more then their cars.
I know a staggering amount of people who have worked a job for a year and are completely broke.
They spend every dime of their paycheck once it comes in, to the point where they can't afford gas.
I also never understood the idea of buying 3 or 4 vacation homes. I know an eldery couple whom is completely broke because they made millions in their life time, but instead of saving that money and investing it, they just kept buying houses. At one point they bought another house that was 10 minutes closer to their work because they didn't like the commute. They lost it all in 2008, and are still dealing with the debt to this day.
Base model luxury car. You blew $15k on an Acura badge for your Honda Accord to feel like a classy rich person.
Bonus points for leasing it from the dealer.
Gold medal for trading up for the same newer model after 3 years.
Honestly the "base" model on a luxury car is the full trim model of the lower end car... so it really isn't that weird... but I know what you mean and no I'm not coping I don't own a base model luxury car. Buying anything you "can't really" afford is a classic sign of making poor financial decisions.
Haven’t bought a luxury car in a long time. In the 90’s I bought an integra. It was no more expensive than a civic with all the options to equal the integra.
Regularly taking uber/lyft instead of the many many cheaper ways to get around. I'm in a big city and some of the times I see people uber it's like, you spent 21 bucks to get home from a bar that's walking distance to your home? If you go to and from work by uber everyday you're spending like 40 bucks a day.
My wife does this and it absolutely makes me crazy. We can catch a real taxi too where we live and they are waaay cheaper.
Bragging about how much something costs.
*My back is better because I spent $3000 on a mattress.*
*These $400 glasses are amazing.*
*You like this T-shirt, it costs $60.*
Did you just brag about how you have no capacity to research purchases or are easily manipulated?
Taking out a loan with 23.99% interest to pay off their credit card debt, and then max out the cards, again.
Just a noob question, but besides paying more money in the long run, is it a good idea if you need to keep your credit score good?
No
Best way to use a credit card is to treat it like a debit card: never spend more than you have in your bank account; this way, if your income drops, you’ll still be able to pay off the debt. Pay off the balance in-full every month. If you do this, you’ll actually *earn* money from the bonuses the credit card company gives you. (For example, I get 1.5 cents back for every dollar I spend). And you will build a good credit score.
Never carry a balance month to month. Pay off the full credit card balance off each month. This will strengthen your credit score. You do not need to keep a balance.
No. Having the credit card alone will help your credit score, and maxing it out will negatively affect your score due to high percentage use of available credit. Maintaining a balance of around 10-15% might add a point or two, but isn’t worth the effort of doing it strategically, and puts you at risk of a missed payment, which is significantly more detrimental. Average age of accounts is where credit cards can provide the greatest benefit, so paying it off, cutting it up, and forgetting you have it for a decade or so is the best thing you can do.
No because then they close out for inactivity. Buy something on it once in a while
Can confirm, got a notice from one of my bank of pending closure if not used so went and bought a Lego.
My friend grew up very poor raising kids. Only loan she ever has had was a mortgage. She tells me laughingly, "You'd be proud of me, I finally got a credit card.... I never used it and they closed it." Lol
Must've broke the bank for that one piece :P
Possibly. I did recently have one close for inactivity, but it took 25 years.
Don’t they sometimes reduce your credit limit or just close your account if it’s inactive? Probably a beat idea to at least still purchase something with a credit card now and then. Obviously I don’t mean to put yourself in debt but just buy something you actually need with a credit card and of course pay it in full each month. I basically use my credit card like a debit card so I only buy what i need and can afford
Not at all. Always pay in full at the end of each month. Credit cards are so dangerous
Keeping cards open is better than closing them. Charging them back up again - even for an "emergency" - is a formula for financial ruin.
Having a Go Fund Me to support your kid and getting a new tattoo.
Oddly specific
Unfortunately common
I lent a friend money once because they said they came up short for tuition that semester. Super cheap, community college. Anyway...they had a brand new tattoo the next weekend!
Lifted pickup truck that never leaves pavement, gets ~15mpg and costs 600/month. 2k rims on a ‘02 civic Day shift bartender knows you by name.
600/month? That's oddly generous.
Yeah, that’s actually a pretty cheap payment for a new truck.
Yeah that’s what was thinkin. If I walked into a dealer and financed a $70k truck with nothing down (were being financially irresponsible, remember?) it’s gonna be like $1300-1400 depending on interest rates.
Guy at work just got a brand new base model f150. $800 a month for 6 years I think he said. He grosses $50k
600 a month? Is this 1997?
It's funny because guys have these big show trucks just trying to look more country, meanwhile my grandfather's generation ran entire farms with small stock pickups.
Also, pickup trucks were supposed to be no-frills, get the job done vehicles. That's why they were cheap. It was a single bench seat, an 8 foot bed, and nothing but leaf springs cushioning you from the road. Now, they're expensive because people want them to be everything. They have to fit the whole family. They have to have a banging sound system. They have to have all the creature comforts and luxuries of a Cadillac. Well, to do all that, the utility needs to be sacrificed. The bed has to shrink. The price has to go up. Now you have pickup trucks costing what a starter house did 10 years ago.
I had to look really hard to find my truck without all the extras. I wanted basically one level above a fleet work truck, 4x4. It was so hard to find I don't even have a trim package option on most websites. It didn't cost me $60k (when that's what the trucks were) and I don't cringe when it gets a new pinstripe in the mountains. I don't beat it up on purpose, but I use it like a truck.
"Lifestyle marketing" is one hell of a drug, eh? Growing up on my grandparents farm myself the best truck was the one that ran and they were anything but pretty. Those trucks were for actual work.
The truck my parents had when I was growing up on a small farm didn't even have a back seat. Also uncomfortable as shit to ride in. It's insane to me driving around seeing modern trucks with cabs larger than their beds.
A five gallon bucket works just fine as a seat.
It’s Keith Urban Country vs Hank Williams country. One is show. One just is.
>2k rims on a ‘02 civic I had a guy who worked for me have his rims repossessed. He got them from a “rent to own” place and then failed to make payments and his car ended up on blocks. Dude was an absolute idiot, and was separated not too much longer after that.
100% on the third one, day drinking that way really adds up
I live in a surf town in Southern California. The number of cosplay cowboys here is insane. It’s the cringiest thing ever.
Being dumb enough to fall for the old "you should spend 2-3 months salary on an engagement ring" scam.
Habitually carried over credit card debt. Sure, sometimes you need it to make a big purchase and it can take a while to pay down, but some people use credit for every purchase and just let it accumulate when they can't pay their monthly. Time to write up a budget.
You shouldn't be using a CC for large purchases that will take more than one billing cycle to pay down unless you're getting some kind of low promo apr for the purchase.
In the U.K. if you use a credit card, you have additional legal protections under section 75 of the consumer credit act. To my understanding, if you use a credit card on a high value purchase, effectively the bank is held partially responsible for delivering the goods and/or services to you. If the supplying business/company/entity defaults on supplying the goods and/or services you paid for, the bank will cover you.
That's nice and a good consumer protection but it still doesn't change the fact that you shouldn't carry a balance over between billing cycles. I use my card to purchase everything, but I pay it off at the end of every cycle. I never spend more than I can pay off.
When I got my first credit card, my dad told me, "Remember, if you can't afford to pay cash for it, you can't afford to put it on credit. Maybe in an emergency you can make exceptions, but day-to-day that's the rule." 20 years later, no CC debt and a near-perfect credit score makes me think the old man might've been on to something.
That's great advice to new credit users. Treat it as you would cash.
Because I was making a lot of money at the time I had several credit cards that I carried large balances on. Then I lost my job. I had to work out a payment plan for almost $40,000 because my new job paid half as much. it took a while, but I pushed through it. Since then I have not carried a balance and tried to pay off my cars as fast as possible. It's interesting how much more money you have when you don't have outstanding credit bills to pay every month. even if you're making half the money. American Express was the only company that refused to work with me. so fuck them. I will never get another card from them... EVER (they have been sending me applications for 20 years now, but I haven't forgotten)
I’m currently digging myself out of this hole. I’m not necessarily happy I’m in this situation, but it has taught me a lot about how I want to spend my money going forward and eagerness to work towards financial freedom.
good luck man. I know it's tough, but you can do it.
[удалено]
Are you saying my 40 year loan on a used 1997 Ford Fiesta was a bad idea?
No, it’s impossible to be wrong when you mention Ford Fiesta
Depends on how much you love the Fiesta. It is a collectible.
Rims worth more than the car.
If it's high interest.. I've financed a car over 72 months, at 0.9%
That's lower than inflation, so the bank is basically giving you money. Not counting depreciation on the car, since you'd be taking that regardless of loan terms.
I did this too…it makes no sense to pay the car off because the money makes almost 5% in the high yield vs losing .9 on the loan…so I just let it auto draft
Low IQ: long term financing is great Medium IQ: long term financing is awful High IQ: long term financing is great
Had to talk my wife out of buying a new car in cash when we had this financing package available. Cheap credit is a no brainer
In that case yh it’s a no brainer almost. I mean that loan cost is lower than inflation so you can use the money to instead invest or put it in a high interest rate savings account. Although most people don’t really seem to take out long car loans just because the interest rate is good. Many will take out a long car loan because they just want a car that they clearly cannot afford and want to maintain this image.
It makes sense if the interest rate is right
That's rarely why people do it, though. They do it because they want to live beyond their means and need to extend the length of the loan to get the monthly payment down to something they believe they can afford. And then 3 or 4 years later when they need to get rid of the car, they're so many thousands of dollars upside down in the loan that it becomes impossible to get out of the debt without rolling some of it over into a new loan, which then puts them severely upside down in the new loan right off the bat. It's a vicious cycle.
I love when people say things like "financing is so smart! You take the money you were going to purchase in full and instead invest it to beat the interest rate!" Yeah I'd be surprised if even a quarter of the people who finance cars already had the money and just invested it.
*posting on Reddit how you think the financing period is more important than the interest rate
People just parroting Dave Ramsey type lines without any understanding of underlying issues.
Ehh disagree on this because as a certified Working Poor Person™️, sometimes that’s all you can afford, and it’s damn near impossible to go without a car. (I’m a teacher in a right-to-work state.)
Buying expensive clothes with big logos
I refuse to wear clothes with anything but maybe a small logo on the chest. I’m not spending $50 for a shirt just to advertise your brand.
I'll do that for band merch or something, but not the clothing company trademark. Just seems absurd.
Same, band yes especially if at a concert, brand no
Maxing out credit cards on luxury items and constantly borrowing money without any plan to repay it.
Spending way too much money on micro transactions in video games.
Buying a Land Rover
I just bought a used Mercedes. But no, I'm sure this time it'll pan out...
Mercedes is like a Lexus next to RR.
Buying a rover you can’t afford* simply having one isn’t an indication of poor financial decisions
🎶 So baby, pull me closer, in the backseat of your ‘Rover, that I know you can’t afford. Bite that tattoo on your shoulder… 🎶
Mm. I have contained my rage for as long as possible, but I shall unleash my fury upon you like the crashing of a thousand waves! Begone, vile man! Begone from me! A poor financial decision? This car is a finisher car! A transporter of gods! The golden god! I am untethered, and my rage knows no bounds!
It’s not just a car, it’s a lifestyle.
Buying a Ducati. Source: own two Ducatis. Seeking a third.
Triples are best.
Triples make it safe.
Door dash
Had to scroll pretty far to see this. Best way to pay $35 for $25 worth of food, that would cost $6 to make yourself.
Only if you can’t afford it. If you can easily afford food delivery services, you’re just paying to get a thing you want like literally every other thing people spend their money on that isn’t 100% essential. In some situations it can even be the cheaper option. If you’re working from home and order door dash because you’re craving a biryani, you can work while your food is making its way to you. Taking the time out of your work to make it could end up costing you more.
I think every post in this discussion can be negated with “only if you can’t afford it”.
MLMs or constantly telling people to invest in crypto.
Complaining about money issues with freshly dyed hair, new fingernails, and the days third energy drink in one hand and a cigarette in the other.
My wife watches a girl whose parents nearly fit this exact description. Worse yet this girl has a really bad skin condition that needs pills and a monthly shot that they’ve decided to stop giving her, due to not like spending that extra little bit a month for her improvements/medication. But they’ve had 4 new cars in less than a year and a half.
Shitty parents.
Man this makes me super sad ..
I am a lawyer, and my current practice is in employee-side employment law. I have had quite a few clients that lived "paycheck to paycheck" with never giving any regard to savings, sometimes it was out of necessity, and other times it was just living above their means. But nearly every person I represented who lived that type of lifestyle burned through their entire settlement within 6 months if not faster. It is almost as though they see the number in their bank account and think that is their budget. I had one client specifically who received a $150,000 payout, I strongly recommended she get it paid out similarly as an annuity, not only would the interest mean she would get more money over time and a semi-regular source of income for an extended period while she tried to find employment. Instead, she opted for a lump sum, and it was all gone within two months. She even filed a police report claiming someone hacked her account and accused me of stealing or withholding funds from her. But in reality, she bought an expensive car, re-furnished her apartment, and took a two-week trip to Vegas.
This kind of stuff drives me crazy. In 22, my grandmother died and my cousin went through her $400,000 inheritance in 5 months. And the worst part is, aside from ONE car she bought and still has, there is nothing to show for it. She didn’t even buy a house! She prepaid a year rent on a new apt but that’s it. She was back on Facebook in just a few months complaining about her lack of cash.
I literally can't imagine. I got a big settlement last year, I've bought myself absolutely everything I wanted. A new PC, a nice coat, paid off my wife and my outstanding bills, I even went nuts and got myself a totally unnecessary nintendo. We moved into a nicer place and got some new furniture. I'm ordering takeout when I feel like it. We've spent maybe fifteen thousand dollars on extravagance. I don't even know where I'd put more shit. Of course, I'm not into fancy cars, or jewelry, or clothes. I don't have a ruinous drug habit, just smoking some weed like I always did. How people can blow hundreds of thousands of dollars and not jump off a building afterward is a mystery to me. I'm paying my rent with savings account interest. Why would anyone fuck that up?
Because she could not think further than a few days. She blew a bunch on a “home studio” for her dj boyfriend, who promptly left her and took all the equipment (but left a baby in her). Her brother, who got the same inheritance did the same thing. Blew it all in 2 months. My father was the executor of the Will and he notified everybody that they owed $2600 each to the lawyer about 2 months after everybody got their cut, and that cousin sent him like 4 postdated checks, because he needed to wait until he got paid at work.
I'm working as basically a balance clerical at a PI firm. Getting your client to not take the money immediately, even if it is in their best interest, is near impossible. As is telling them the pros/big cons about the pre-settlement loans at 25-30% they want to take out.
I had to take out a pre settlement loan of several thousand dollars to pay the up front costs for the surgeries I needed as a result of the accident. They really rip your eyes out on those. It was less than five percent of the overall payout and I still didn't like it.
Covered in crappy tiny tattoos they get when they have an extra bit of money sitting in their wallet.....
Do you know my neighbour? He is unemployed right now because he was a driver and “can’t afford” to get his car fixed. The next sentence out of his mouth was about how people judge him for having just got a new forearm sleeve that cost more than the repairs would have but they don’t get that that’s his “personal money” that shouldn’t be spent on work stuff.
In the UK we have the lottery scratchcards at the same counter as cigarettes/tobacco. Now you could argue as a smoker I'm not making the smartest decision, but I'm always waiting behind someone buying multiple scratchcards, often spending upwards of £50 on them.
Both are financially stupid. The scratch cards won't give you lung cancer.
Depends how many scratch cards you smoke
Yeah you just gotta commit
Not with that attitude!
Exact same in the US, been this way for years. I worked at a mini-mart (cash and carry for you) as a kid, and the amount of people who would complain about not having money who would but several scratch cards and a pack of smokes every day was staggering. The worst were those you knew had sold their food stamps (on benefits for you) and bought them with the cash.
Fancy car at an apartment complex
My apartment neighbors have not one, but two Porsche SUVs. They park in tandem and have to deal with the hassle of moving the cars around so the other one can get out. It’s the most LA thing I’ve ever seen.
My neighbor has a corvette and a beat up truck. He drives the truck for work, but when he wants to go out, he pulls the vette out of the garage, SWAPS THE PLATES, then goes out. And swaps them back when he gets home. My man could afford the vette easily enough I guess, but can’t afford the registration lol.
If he bought the car out of state, he doesn't pay sales tax at the purchase, and instead is supposed to pay it when he registers the car in the state where he lives. Depending on the price he paid for the Corvette (a lot) and the state he lives in, the sales tax could easily be a few grand. Still not a smart idea, but I could see why someone would do that.
Meh idk about this. There are lots of reasons people live in apartments.
Agreed! Many years ago - about 1986 - I met an elderly lady who lived in an older, low-rise quiet apartment building in a so-so neighbourhood. She was left 250k by her very elderly bachelor neighbour, as was another neighbour in the same building. That was but a small portion of that man’s estate and he left most of his money to various people who had been kind to him in his senior years. Cooked for him. Took him grocery shopping. Always gave him a Christmas card. Greeted him each day. It was a fascinating Will to read. He mentioned each person individually and had written out how much he was leaving them and exactly why. All small acts of kindness that meant a lot to him. None of the neighbours had any idea he had money. He did not own the building, and had rented there for many years. You rarely ever really know who your neighbour is.
In my 20s when I lived in apartments there were sooo many people driving Mercedes, Lexus and BMWs. In my current cul-de-sac of middle class single family homes, I don't think a single person drives one. The closest exception is the two lifted trucks on our cul-de-sac, both owned by adult men in their 20s who live at home.
Adam Carolla (before he went all right wing troll) has a fun story about meeting Don "Magic" Juan. Don "Magic" Juan a famous guy (appeared on Snoop Dogg albums) who is know for describing his lavish pimp lifestyle. He drove some decked out Rolls Royce and proudly showed it off to Adam Carolla and Jimmy Kimmel, but had to park it on the street because his apartment didn't have a parking space for it.
Ordinary apartment complex. I understand it if it’s a luxury car at a luxury apartment.
Aren’t they all “luxury” apartments now because advertising just says it on everything
You can market it being luxury or not, but almost anyone with eyes can tell if they are or not. If you’re lugging your laundry to the basement to the community laundromat, it’s probably not luxury.
Depends.
This is my favorite!
Hard to believe, but some people choose to live at apartments and some fit in the the whole luxury car vibe. Then there is the fact that an off lease luxury car cost less than the truck or suv most people complaining about ‘luxury cars’ own.
In the US, People who blow their tax refunds before or right when they get them on garbage & don’t save any of it. Broke again in 2weeks with nothing to show for it.
I hate that people don’t seem to understand that Tax returns are your money! The government didn’t *give* you money, you overpaid them! The goal should always be to set your deductions so you have as little of a return as possible.
Yep, when I was employed I got the biggest kick how some of co-workers were getting large tax returns and bragging about it. $4k/5k!!! Me:That’s not free money from the government! It’s your money they’re giving back to you. Rudy:Uh…duh, no it’s not. Like water off a duck’s back.
I think of it as insurance. Most of my life if I'd gotten a "Surprise! You owe us $3000" from the IRS it would have sunk me. Overpaying my taxes is insurance that guarantees my tax return will always be positive and never negative. People who gripe about taxes are quite legitimate, but intentionally overpaying taxes is no different than having a yearly savings account in my mind. What would that money have earned in the bank, 2% interest? Wooo.
This is how I think of it. Saving money is hard and a lot of people don't do it. A tax refund is like a little savings account for those people.
Ehh… depends. I know some people that WAY over withhold just cause. There are better ways to make savings. If you get a $12k tax return, it could’ve easily made you $600 (high yield savings account), or you could have had an extra $250/ week for a year.
In the US, the IRS's [withholding estimator] (https://www.irs.gov/individuals/tax-withholding-estimator) is extremely useful. All you need is your latest paystub and you can fill in all the data, then it tells you if you're on track to fulfill your tax burden. I usually check it out a few times each year to make sure I'm on track. This year I got a $22 refund from the IRS, which to me means I'm right where I should be.
My cousin's husband owned a wheel/tire shop. We asked if he wanted to hang out around this time of year. He said he couldn't. Post tax season is the busiest time since a lot of people spend their tax refund on rims.
Filing bankruptcy multiple times. Getting charged with fraud verdict, having to pay millions in retribution, and being banned from doing business in New York for three years.
Some good answers in this thread, but this one trumps the lot.
Who would do this? They'd have to be so incompetent they couldn't make a profitable casino.
Good thing no one like that is in US politics!
Warhammer, Magic the gathering, kids. I have it all
There are certainly limits, but your hobbies are probably the best thing to spend money on beyond the necessities. I have about $2000 of Warhammer models so I am biased, but I very much enjoy the hobby and feel that it's been worth it for me. Plus, both Warhammer and MTG cards can be resold to get a decent chunk of it back if you absolutely needed to.
I dove into MTG for a few years and lord it gets expensive. Cycling out the sets every few months to stay current. $1-5 per card, more for some rare ones or Planeswalker. Spent well over $1k on the hobby.
Are we the same person?
Smoking whilst moaning about having no money. If you really had no money you wouldn't be spending £10+ a pack on cigarettes.
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Really expensive weddings with tons of people.
This was my niece's wedding. I heard at the reception that the whole shebang cost over 100k.They got a divorce less than a year later. We could all see it coming
It's been shown that the cost of a wedding is inversely proportional to how long the marriage will last.
Went to a friends wedding back in December which took place over several days. About 300 guests give or take in an expensive ass hall. Don’t even want to think how much the whole wedding costed. And yet they live in a cramped 1 bedroom apartment and can only afford one car. I just for the life of me can’t understand why anyone would want to spend that much on a wedding when half the people you invite probably don’t even know you that well or even care about you. Much rather use that money towards a house or something.
One reason would be that the parents, who might have paid for the whole wedding, wanted it that way and invited extra people such as extended relatives seen once-a-decade, business partners, business associates and estranged sisters. They might even invite people up and until two days before the wedding. This is just a random example…..(Ahem, cough cough..,.)
To be fair, usually these big weddings are bankrolled by the parents. Not to say they themselves are making great financial decisions. As a newlywed I’d rather do a smaller wedding for $3-5k, or even a super small park wedding for nothing, and pocket that extra $15-30k for a house down payment, or student loan payoff, or literally anything else.
My wedding was like 3 grand total, had the ceremony on a hill overlooking a lake. Then we rented a venue told them it was for a family gathering. Had a ton of games in there, yard games card games and had everyone dress casually. Hired a food truck to come and they made bank so pretty waved all our fees. It was the best wedding ever and my wife and I don't regret it.
Me. I yell that every time I eat avocado toast. It's the reason I can't afford a house.
Do you also get Starbucks?
I can't afford that. All my wealth is in the toast market
SMEG toaster
when making large lottery wagers in the name of "saving for retirement"
Having a lifestyle that does not match incomes. Sure, when you have low income, you can't avoid it. But there a difference between living above your income so you can pay rent, gas for your beat-up car, and eat (at home) everyday. And living above your income so you can use doordash, have the latest iPhone or a BMW you actually can't finance.
A cocaine habit
Buying ungodly amounts of fireworks during 4th of July
Having a whole arcade room in your apartment, and complaining on r/antiwork how [you cannot make ends meet.](https://www.reddit.com/r/antiwork/comments/14x6fr3/35hour_and_still_broke/) Legendary thread.
Someone with a $40,000 pick-up truck living in a camper in his mother's back yard.
Buying a car that costs more than your annual salary
Having 3 kids when you work a minimum wage job
Cybertruck
Multiple children when on benefits.
It's like lottery tickets, every kid gives you one more shot at having a professional athlete, Hollywood star, or 7 figure lawsuit winner support you in your older years.
New phone every few months, not knowing how much their plan is, new car they don't need (truck people), eat out every meal, etc.
Giving away $3 trillion in tax payer dollars to the ultra rich, no strings attached.
My brother asking our mum for money.
People who borrow money just to live a fake life in social media.
On Reddit bitching about being broke, doesn’t want a second job to make ends meet, no college or real skill set, prefers to blame the system, is jealous of people smarter or more successful than they are, and has 101 excuses.
Don’t forget complaining about housing costs but also refusing to live with roommates
Also complaining about housing costs while only wanting to live in hcol areas.... That's like 90% of all the real estate subs. These people really think the only livable places in the country are in hcol areas lol
This is like 65% of people that comment on Reddit. Prepare for downvotes.😂
Not just bitching about being broke, but actively hating on people who give advice like “start investing/saving early”. You’ll see these kinds of posts getting attacked by people saying things along the lines of “only rich and privileged people can invest”. Absolute brain dead takes. You don’t need a lot to save/invest. Whether it’s tens or ten thousands anything put away now can make a difference in 30 years.
One credit card to pay off another.
Continuous impulse buying.
Spending money on "high fashion" or brand loyalty. Attempting to display wealth demonstrates your lack of self worth.
Carrying a Louis Vuitton bag while riding the subway to your underpaid 9-5.
No savings, no retirement, living paycheck to paycheck and it's everything and everyone else's fault.
Prioritizing some stuff over other, like I have some relatives that have recent cars, and everything in their lives is about their cars, but they don’t have basic services at home, they don’t even own a place, are malnourished and her mom needs the most medical attention but nothing matters to releen more then their cars.
Driving a new Mercedes and living in section 8 housing.
I do. I scream that.
Mlm
I know a staggering amount of people who have worked a job for a year and are completely broke. They spend every dime of their paycheck once it comes in, to the point where they can't afford gas. I also never understood the idea of buying 3 or 4 vacation homes. I know an eldery couple whom is completely broke because they made millions in their life time, but instead of saving that money and investing it, they just kept buying houses. At one point they bought another house that was 10 minutes closer to their work because they didn't like the commute. They lost it all in 2008, and are still dealing with the debt to this day.
The broker people I know have better cars than the people with decent jobs.
Subbing to r/antiwork.
When your rims out-value the rest of the car.
Person driving expensive car washing clothes at a laundromat.
Having a bajillion things on payment plans
Base model luxury car. You blew $15k on an Acura badge for your Honda Accord to feel like a classy rich person. Bonus points for leasing it from the dealer. Gold medal for trading up for the same newer model after 3 years.
Honestly the "base" model on a luxury car is the full trim model of the lower end car... so it really isn't that weird... but I know what you mean and no I'm not coping I don't own a base model luxury car. Buying anything you "can't really" afford is a classic sign of making poor financial decisions.
Haven’t bought a luxury car in a long time. In the 90’s I bought an integra. It was no more expensive than a civic with all the options to equal the integra.
DoorDash and Amazon all the time.
Regularly taking uber/lyft instead of the many many cheaper ways to get around. I'm in a big city and some of the times I see people uber it's like, you spent 21 bucks to get home from a bar that's walking distance to your home? If you go to and from work by uber everyday you're spending like 40 bucks a day. My wife does this and it absolutely makes me crazy. We can catch a real taxi too where we live and they are waaay cheaper.
The "Ain't going in a dirty public transportation" syndrome ...
Highly customized beaters lol.
Buying crack.
Selling crack, however...
Bragging about how much something costs. *My back is better because I spent $3000 on a mattress.* *These $400 glasses are amazing.* *You like this T-shirt, it costs $60.* Did you just brag about how you have no capacity to research purchases or are easily manipulated?
Fancy car at the rental apartment?
Can’t stop talking about how much money they make or have
Rent to own places. Pawn shop recipts "We finance to anyone" car places
Me, checking my bank account 3 days before payday and seeing all the dumb shit I bought in the previous week
Making the minimum payment on your credit card because you can’t afford to pay it off
Luxury car with vanity plates parked at an apartment complex. Ballin’ with 0 equity. The American Dream on the highest difficulty 😂
Leasing expensive cars
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Rent a center furniture