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Money mistakes can be costly and life-altering, and when it comes to our finances, we must always tread carefully.
Behind each cautionary tale of a financial disaster resides lessons that teach us all the importance of sound money management.
From reckless spending to unwise investments, from feeling pressured into complex deals they didn’t understand to getting burned by shady get-rich-quick schemes.
We’re exploring twelve real-life stories that lay out the potential dangers of poor decision making with money and how those decisions altered people’s lives for better or for worse.
#1. Sending Money to Someone You Don’t Even Know
There are people out there who will take advantage of lonely people looking for romantic attraction.
One man sent money to a woman in France to help her pay for surgeries and fund her lifestyle.
He never actually saw her and was eventually cut off.
#2. Greedy Family Members
There are a lot of family systems where greedy family members swoop in when money is involved and try to hog it all for themselves.
Many have had this happen to them and lost a ton of potential inheritance because of one family member’s inability to be ethical and fair.
#3. Buying Takeout or Delivery Exclusively
Takeout and food delivery services make it easy to get the food you want when you want it.
But there are a ton of people who don’t make food at home, instead relying solely on these services.
As you can imagine, it eliminates any potential profits quickly and makes living a financially responsible life more challenging.
#4. Spending Thousands on Anime Figurines
Anime is quite popular, but it is sometimes an addiction that gets out of control.
Some people have spent tens of thousands on anime figurines and have gone into debt to feed their addiction, leaving them with little money for anything else.
#5. Basing Mortgage Payments on Overtime
Never base your mortgage payments on income you’re not guaranteed to make.
Many people think they will have income they don’t have, like those who base their ability to pay on hours they might be working in the future.
They end up having to work way more to continue affording this rather than being more realistic about what they can pay on time.
#6. Living It Up on a Major Windfall
Getting a lot of money at once can be surprising, and not everyone handles it well.
There’s many a story of people getting tens of thousands of dollars through situations like receiving inheritance, only to spend it all on things they want and returning to being broke relatively quickly.
#7. Taking Out Loans and Maxing Out Credit Cards
Going into debt is only a good idea when the debt is designed to boost your credit or help you afford something you need that you know you can repay.
But that’s not how everyone uses it.
Many use debt as though it were cash, applying for loans and maxing out cards to buy stuff they don’t need, only to put themselves in worse financial straits each time.
#8. Buying Products From a Door-to-Door Salesman
Today’s generation would rarely answer the door for people they don’t know, but others were more likely to see what kind of pitch someone had.
One unfortunate person answered the door and fell for the pitch, wanting to get the cookware set offered alongside the water subscription the salesman was selling.
The filtered water cost $300 a month and was in a locked contract they could not touch for two to three years, costing them a ton of money they couldn’t afford.
#9. Buying Into Trends
Never buy into trends!
One man who owned his own convenience store sunk his money into 20,000 fidget spinners back when they were popular, thinking that it would be easy money.
He had to beg people to try to buy them, and his marriage and business failed due to the poor investment.
#10. Giving Up Academic Opportunities
Have you ever had someone give up the opportunity to send all kids to college for free?
One man who worked at USC did.
Because he worked there, he could get free tuition for all five of his children if he worked there for 15 years.
He quit after 14.5 years for another job that barely paid more and lost the opportunity.
#11. Selling Major Real Estate Investments
One unfortunate woman invested in an apartment building that needed work to avoid capital gains taxes.
She hired her daughter’s ex-husband, who was upset the entire time.
The apartments started making money, but her daughter kept pressuring her to sell them because she didn’t like the situation.
The woman gave in and lost an asset that could have been worth millions in today’s money.
#12. Blowing Wedding Money at the Casino
Some people (generally men in many of these stories) have major gambling issues.
When they see a large pile of available money, they have to spend it with the intent of making more.
Sadly, though, this is generally an approach that doesn’t work.
Unfortunately, many of these men have blown the money meant to be spent on their weddings at the casino, only to lose it all in the process.
#13. Falling for Craigslist Scams
Have you ever seen online scams where someone requests you send money before you even get the thing?
Yes, people do fall for those.
In the case of one woman who wanted a motorcycle, she paid around $1,000 before seeing it and had spent around $3,000 before she finally realized something was wrong.
#14. Hiding Assets and Using Your Partner for It (or Lying)
Many people have tried to hide their assets from government agencies by hiding them using their partner or by lying and selling them to a friend for cheap.
Not everyone wants to give those things back, and they have instead taken the money and run, leaving them with nothing.
In other cases, the money is found, returned, and becomes a problem when the government discovers it.
Fun Money Saving Challenges
Do you find it boring to save money?
If you are motivation by turning things into a game, check out these money saving challenges. There is a game for you that will make saving fun and exciting so that you make it a priority to save money.
How to Get Out of Debt
If being in debt wasn’t bad enough, trying to dig yourself is worse.
Combine the setbacks you face and the time it takes, it’s no wonder many people feel trapped.
But there is hope.
Here is how to get yourself out of debt once and for all.
Good Money Habits To Have
In order to get ahead financially, we need to develop good habits. Most people talk about bad money habits to get rid of.
Here are good money habits you need to follow if you want to take the next step financially.
Learn How To Save $100K
Saving money can be hard, especially if you are looking to have $100K in the bank.
But while it feels difficult, don’t let this stop you. Here is how you can save $100,000 in nine steps.
How To Get Free Money
The idea of free money sounds like it can’t be true. But it actually is.
There are many ways you can get free money, from playing games, to watching videos, and more.
Here are the best ways you can get free money without having to work for it.
This thread inspired this article.
I have over 15 years experience in the financial services industry and 20 years investing in the stock market. I have both my undergrad and graduate degrees in Finance, and am FINRA Series 65 licensed and have a Certificate in Financial Planning.
Visit my About Me page to learn more about me and why I am your trusted personal finance expert.