10 Ways to Bury Yourself in Debt

[Lisa23]

Guaranteed budget killers.

1. Get Divorced.
   Divorce court = lawyer’s paradise. Cha-ching.
2. Gamble.
   This includes copius amounts of lottery tickets.
3. Play the stock market when you don’t know what you’re doing.
   Same as #2.
4. Buy a Cadillac when a Corolla will do.
   Repeat after me: I can’t afford it.
5. Spend tomorrow’s money today just for fun.
   Only spend tomorrow’s money today if the bottom falls out of the barrel. Like if your washing machine crashes and burns.
6. Don’t put money into a retirement plan.
   Not only do you lose the tax breaks, you’ll be working until your next life.
7. Pay only the minimum payment on current credit card debt.
   Rule of thumb: Credit card companies want all your money. Unless you’re lucky enough to have a 0% interest loan, pay it down as fast as you can. Pay the highest interest loans off first.
8. Keep smoking too much, drinking too much, collecting too much (books, CD’s, movies, hats.)
   Kick the habit and join the unhooked generation.
9. Live Paycheck to Paycheck.
   If you create a budget, the money will be there for the big hits, like car insurance or your water bill.
10. Don’t use automatic Bill Pay or Direct Deposit.
    Not taking advantage of these easy tools gives you more chances to forget to send that payment, deposit that check, or otherwise mess up your money.

For still more insight on Frugality, Politics, and more check out Greener Pastures.

[singleguymoney]

Great list! #4, #5, and #8 are the things that caused me to bury myself in debt.

[lucille]

You forgot getting sick.
That can bury you in debt over night even if you have insurance.

[RickLee]

Your #2 is so right. According to the dealers I talk to at the Blackjack tables, there are so many sad stories. Like the guy who lost his home equity by gambling, and the rare but real stories of people who did themselves in - sometimes inside the casino washroom - due to mounting gambling losses.

Although I am net positive $$$ through careful advantage play, using card counting and shuffle tracking, being a part-time professional blackjack player is no guarantee I'll earn on any particular day. Hence the point of the thread - budget killing - holds true.

[redambrosia]

So true Lucille... My brother got really sick, his guts got all twisted up inside him, and had to have surgery. He had to put off going to college for several years while he paid off his bills.

I myself am incredibly afraid of getting sick. I have no insurance and am currently unemployed. At the end of September I had to go to the ER, and the bills from that nearly made me pass out.

For #5... there's a such thing as having too many books? :x Sure, they're heavy, but they're such a lovely, reusable pleasure. :x

[austenjonesufg]

Lisa23 thank you for ur post. ur post is helpful.

[nkthen]

Originally Posted by lucille

You forgot getting sick.
That can bury you in debt over night even if you have insurance.

Sorry, I have to disagree with that.

With proper planning and understanding in insurance, you can avoid getting broke when you are sick.

[redambrosia]

Originally Posted by nkthen

Sorry, I have to disagree with that.

With proper planning and understanding in insurance, you can avoid getting broke when you are sick.

Explain more

[Philip Brewer]

Originally Posted by nkthen

With proper planning and understanding in insurance, you can avoid getting broke when you are sick.

If you have good insurance, that's generally true. But what if your employer offers crappy insurance? You could buy your own policy (spending 4 times as much while simultaneously throwing away a big tax advantage), or you could just take the risk that you won't get so sick as to bankrupt yourself. Given that most people won't get that sick, it's a bet that a lot of people are going to take. A few of them will be unlucky and end up going broke.

I suppose, though, you could call that a lack of proper planning or understanding.

However, what about the people who have already been sick, or have some chronic condition? No amount of planning or understanding will make affordable insurance policies available to them. They could bankrupt themselves just trying to cover their insurance premiums, without getting sick at all. What kind of planning and understanding to you recommend for them, to avoid going broke if they get sick again?

[nkthen]

Originally Posted by Philip Brewer

If you have good insurance, that's generally true. But what if your employer offers crappy insurance? You could buy your own policy (spending 4 times as much while simultaneously throwing away a big tax advantage), or you could just take the risk that you won't get so sick as to bankrupt yourself. Given that most people won't get that sick, it's a bet that a lot of people are going to take. A few of them will be unlucky and end up going broke.

I suppose, though, you could call that a lack of proper planning or understanding.

However, what about the people who have already been sick, or have some chronic condition? No amount of planning or understanding will make affordable insurance policies available to them. They could bankrupt themselves just trying to cover their insurance premiums, without getting sick at all. What kind of planning and understanding to you recommend for them, to avoid going broke if they get sick again?

My advice here is targeted to people to buy insurance when they are healthy. Group insurance (ie employer's providing insurance to staff) is limited and covers mainly small issues like medical claims for flu and minor injuries.

If a person is diagnosed to be sick before they are insured, then it is very hard for them to get insured. They will have to pay a lot to get covered, no doubt.

Lastly, here are some specific advices when it comes to insurance:
- Having an insurance policy is better than not having one at all
- Plan your finances when you are young and healthy, never do it when you are old, where more health issues are uncovered
- Plan how much you can afford per month for your insurance
- Start with term insurance if you are low on budget, increase more when you have more financial capabilities
- Get hospitalization insurance if you can. It's usually a yearly payment
- Get independent financial adviser to plan your finances and your insurances. Try not to look for insurance agents because they are usually interested in selling their company's product only.

I'm not putting down on all the agents but if you can find one that is sincere in helping you, just go ahead.