I recently received a GREAT email from an FMF reader that went as follows:
For once a straight shooting article from the mainstream financial press. It basically says people have money problems because:
- They spend too much on housing
- They spend too much on cars
- They spend too much on college
There are other factors, of course, but I agree these are the big ones. The other two that I'd add that nobody wants to touch are:
- Having kids out of wedlock
I LOVE it!!!! :)
I mentioned several of these in my post on the ten worst money moves anyone can make: marrying the wrong person was #7, buying too much house was #5, and over-spending was #1.
The house, car, and college are especially dangerous because of the amounts involved. It's one thing to over-spend on comic books and quite another entirely to over-spend on a house.
A few more thoughts from me:
- Here's how to buy a house and pay it off in ten years.
- Here's how to save money on a new car (You can also buy used, as I'm sure some of you will point out.)
- As for college, the key is to make the payoff exceed the investment. In other words, it needs to be a "good deal." $50,000 invested in college for a job that pays $75,000 a year is a lot better investment than a $200,000 cost for a degree that gets you a $20,000 a year job.
Anyone else have thoughts?