Yeah? Well, so is insanity.
Many people believe their disastrously low bank balance is caused by outside forces – bad luck, if you will. Mostly, being broke is a result of habitual actions.
Albert Einstein defined insanity as “doing the same thing over and over and expecting different results.”
To understand why you don’t have any money, simply marry the wisdom of Aristotle and Einstein. It’s because you repeatedly manage your money like a crazy person.
Here are the top 10 ways insanity manifests itself in your spending habits.
1. Playing the lottery
Your chances of winning are as good as everybody else’s. They’re not going to win and you’re not either.
2. Borrowing on credit cards when you’re already deeply in debt
Instead of taking the sensible approach to getting out of debt – instead of exercising financial restraint, you ferociously dig yourself into a deeper mess. Neither gov’ment nor pixies nor rainbow colored unicorns pay off debt. You’ve gotta get this done. Your first step: stop borrowing money.
3. Being overly optimistic about future pay increases
Positive thinking and willful delusion are not the same. During the recent run up in home prices, it was amazing how many people believed their monthly after-tax income would grow by 30% in time to cover the increase in a 1-year adjustable rate mortgage. Come on, people.
4. Overdrawing your bank account, paying creditors late, exceeding your credit limit
Hoping and wishing aren’t effective money management strategies. If you’re constantly smacked with no value added fees, then you’re either insane, clueless or plain ol’ dumb. There’s no way anyone with finite income and adult obligations would continually pay these. There’s just no way.
5. Getting speeding and parking tickets
Resist the urge to break the law. Ultimately, it’s gonna cost you – once when you pay the fine, and for moving violations, twice when your car insurance premiums go up.
6. Loaning dead beats money
Here’s something I’ve never been able to understand. How can one person have multiple bad debts with another person? Did the lender not learn anything from the first, second, and third time he loaned the borrower money?
7. Not paying your taxes consistently and on time
Penalties and interest for paying late, filing late, not filing and not paying are steeeep.
If you’re engaged in an internal battle over whether you should pay the unfair taxes levied upon you by the U.S. government, then here’s a tip that might set you free.
The trick is to stop thinking of it as “your” money. ~ IRS Auditor
There, I fixed ya.
8. Incurring hefty medical bills for preventable diseases and conditions
Let’s be honest. We know what causes obesity, Type II diabetes, heart disease, stroke, etc. You must take conscious and deliberate actions to ensure you’re physically healthy.
Even with “good” health insurance, you never know when your claim will be denied. Besides, being healthy will help you get more enjoyment out of life, and you’ll spend less money in an effort to make yourself feel better.
9. Expecting material things to bring happiness
Boy, it sure feels good to buy stuff. Especially stuff that’s shiny and colorful and new. Unfortunately, the novelty of new stuff wears off almost as soon as we buy it.
If you’re home when reading this, quickly scan the room you’re in. Compare the stuff you constantly use with the stuff you’ve used a time or two with the stuff that’s still in boxes. You don’t have to tell me what the ratios are, I already know.
10. Haphazardly going back to school anytime you can’t find a job
Why is the popular solution to paying off student loan debt going back to school and incurring more student loan debt? How does that make sense?!
I don’t dispute a good, formal education can boost your lifetime earning potential. However, a college degree is not a magic pill that automatically leads to more money. If you insist on going to (or going back to) college, carefully evaluate where your skills AND interests lie, THEN determine whether a relevant degree will generate a worthy return on your investment.
What other insanity indicators have you either practiced or witnessed?