The holiday season reminds us of a culture of excess which most of the time leads us to a lot of financial problems. We list down some of the worst things you may have committed in the past or you can also look at them as the deadliest financial sins you want to avoid:
Co-signing a loan
Never co-sign a loan for a friend if you know that you have enough to really cover for it in case something goes wrong. Remember that you are equally responsible if your friend defaults payment or does not pay at all.
Going beyond what you can
If you are using your credit card for your fuel, grocery, and other purchases and you do not have anything in the bank to back these expenses up, you must do something as soon as possible or you will be neck deep in debt soon.
Spending on wants and luxuries
Shopping for fun? Swipe it ‘til you drop? Booking a hotel suite even when you know you cannot afford it? If you answered mostly yes to these questions then you know that you must think of something since your spending will lash back at you pretty soon.
Splurging like it’s your last day of spending
You need to follow a budget and control your income or else you may lose control. Let us say you are eating a restaurant, decide what you want to eat or else the waiter will be spending your money.
You are not saving
It is a cliché but it is an absolute truth— you must prepare for the rainy days. You need to make sure that you save something that is equivalent to half or a year’s worth of expenses ideally. You also need this for emergency expenses like when your car breaks down or when a member of your family falls ill.
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