Phil's Personal Finance Tip of the Day:
5 of the Worst Things You Can Do With Your Money
Financial blunders are made all the time and everywhere – at the grocery store, at the bank, in the housing market, in the stock market, with your children’s allowance. Some stem from a lack of knowledge or awareness, while others are the result of human behavior that often works against our own best interests. The worst mistakes you can make, though, usually involve those that seem harmless but end up impacting your overall wealth.
We spoke with financial advisers about the worst financial slip-ups people make and how much they can cost you. No doubt the opportunities to mishandle your money are endless, and this list is by no means exhaustive. But here are some money moves you should strive to steer clear of.
1. Spending an unexpected windfall. All of it.
Two-thirds of baby boomer households will likely receive some inheritance, with a median amount of $64,000, for a total prospective inherited amount of $8.4 trillion, according to research published in 2011 by the Center for Retirement Research at Boston College. A big challenge for many inheritors, though, is that they can be completely inexperienced with money. And with inexperience and poor – or no – planning, comes the potential for squandering a windfall.
Americans spend their inheritance shockingly fast, says Mackey McNeill, a CPA in Bellevue, Ky.“When people get a big amount of money that they didn’t earn, they feel like it’s so much money, they’ll never run out,” she says.
McNeill recounted the story of a client whose mother had died and left her about $500,000. “By the time she walked in my door, she only had half of it left," McNeill says. "She paid off some of her mortgage, bought a new car, donated some money and bought a big-screen TV for her son” while having the unrealistic expectation of being able to quit working and pay for her son’s college tuition.
“You need to run the numbers before spending it," adds McNeill. "If they keep that capital and invest it, they can generate income for the rest of their lives."
To read the entire article from Lisa Scherzer | The Exchange:
http://finance.yahoo.com/blogs/the-exchange/5-worst-things-money-184739197.html
Inspirational Quotes@Inspire_Us from Twitter:
There is no pillow so soft as a clear conscience. -French proverb
Hi my name is Philip J. Miano and I am the founder of PJM Personal Finance and Productivity Coaching specializing in Budgeting, Debt Reduction, Bank Reconciliations, Goal Setting, Time Management, and Organizational skills. Please visit my website: http://pjmcoaching.com.
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