The Top 3 Worst Reasons For Making Financial Decisions

By ClearpointDecember 31st, 2010Budgeting and Saving Money

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1. Celebrity endorsements

It’s easy to see why so many financial companies use images of celebrities to bring attention to and legitimize and their products and services. Everything from cars to reverse mortgage loans is touted by the likes of Eric Estrada, Henry Winkler, Sam Waterston, and even the Kardashians. We recognize, connect with, and trust our celebrities.

Does their endorsement guarantee legitimacy? Maybe, maybe not. One thing is certain. Celebrities are paid actors, not life-long financial experts. If you want to make an informed financial decision, do the research and get advice from trained financial professionals. If you want acting tips, then get help from Hollywood.

2. Keeping up with others

Does your neighbor have the latest lawnmower? Do your friends all have iPads? Are you feeling pressure to buy a new car just because of they types of cars parked on your street? Ask yourself: Do I really need a new ______? If your car is still in good working condition, despite its age and appearance, keep it. If you can still cut the grass in your yard with the mower, keep it. If you get along fine with your computer, keep it.

Frugal and functional are the new black. The money you save will make you the envy of those who waste theirs when they should be saving.

3. Because it’s what I have always done

Remember Albert Einstein’s quote about insanity? Insanity: doing the same thing over and over again and expecting different results. If your financial strategies are working for you, that’s good, but repetition may be keeping you from finding new ways to save or make more. Look for new ways to improve your  investment knowledge and money management skills so you speed up your progress toward reaching each of your financial goals.