1. Take out a loan to pay your bills

Why is this bad?  If you can’t pay your current bills, what makes you think adding another bill will help your situation? You really should consider working with a debt consolidation/relief company.  You’re also probably going to need to find some extra income.  A different job or/and an additional job are all on the table.  These are major, life changing decisions here and should not be taken lightly.  The bottom line is you simply cannot afford the basics with your current level of income.  Until you solve that problem, you are simply applying another band aid to an already terrible situation.  You are on the dreaded credit hamster wheel.

2. Make a credit card payment using a cash withdrawal from another credit card

Ok, this is bad for a whole host of reasons.  First off, it’s a really terrible habit to pick up.  Sure, sometimes things get tight and you may need to get thru one month by doing this…but bad habits like this lead to financial folly.  Basic rule of thumb when it comes to the human condition…if you do it once, you will do it again.  You can avoid this by telling yourself it’s simply not an option.  Secondly, most credit cards charge a higher APR for cash withdrawals.

3. Buy discretionary assets on credit

Discretionary assets are things that you want but don’t necessarily need.  Examples of this might be a luxury car, large flat screen TV, the newest iPhone, the list goes on and on.  Consumer electronics for the most part our one of the greatest diminishers of wealth for our current generation because they effectively have zero value after a few years.  If you have the money, you can buy these types of items.  Just make sure you never buy them on credit and that they fall within a structured financial budget.

4. Try and “Keep up with the Jones’s”

Trying to buy your way up in society is a problem that has existed throughout human history.  Unfortunately, social media platforms and excessive coverage of celebrities in main stream media has further skewed the way we see others in our society and social circles.  Our glimpse into other people’s lives is truly a highlight reel.  We see what others have and assume that those things will bring us the same misperceived happiness that it seems to bring them.  Remember, “What I want is what I’ve not got. And what I need, is all around me”- Dave Mathews, Singer, The Dave Mathews Band.

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