You scared? Probably not. Ghosts at Halloween are so clichéd.
But you know what’s scarier than a Halloween ghost? It’s a stupid money mistake. Because, unlike a ghost at Halloween, a money mistake can haunt you for a long time.
We like to call them money tricks because they might seem like a good idea at first, but they will become a nightmare of Freddy Krueger proportions if you’re not careful. Here are six money tricks to watch out for:
1. The Lottery
If you routinely play the lottery, you should do this instead: Hop in your car, open your windows, and drive down the interstate. As you drive, flick one-dollar bills out into the roaring wind. That will have the same effect as playing the lottery. Even better, you’ll provide a lonesome drifter with a few dollars cash.
How to Avoid: Drop those singles into a jar instead of playing the lottery. Once a year, transfer that money to your 401(k) or your kids’ college fund. Your return on investment will be more likely.
2. Car Leases
Nothing says, “Please, sir, take my money. A bunch of it!” quite like a car lease. Statistically, leasing is the most expensive way to drive a car. But, according to General Motors, nearly one-quarter of all car “sales” are actually leases.
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The National Auto Dealers Association says car companies make more money off leasing you a car than if you bought a car with cash. Don’t fall victim to the “fleece.”
How to Avoid: Save cash and buy a used car. Read the tips you need to know before buying a used car.
If you get a timeshare, we hope you really like it—because you’re never going to be able to sell it for anywhere near what you paid for it. You can hardly give the things away. You’re the nasty stomach virus of the real estate market.
You have no equity and ridiculous maintenance fees—all for the opportunity to visit a place with minimal square footage maybe once or twice a year. Why would you ever want to put your hard-earned money into something like that?
How to Avoid: Stay away from the sales pitches and high-pressure meetings and rent instead.
4. Payday Loans
Do you smell that? It’s the scent of liberally applied hair gel. That can only mean one thing: a greasy payday lender has set up shop nearby. Run! That is, unless you’re into paying hundreds of percent interest.
These guys are bottom feeders who prey on poor people. Stay away.
How to Avoid: Take Dave’s advice and just keep driving right past their buildings. These guys make credit card companies look like Mother Teresa.
5. Retirement Loans
Living comfortably after 65 is just so overrated. Wouldn’t you much rather take loans out of your 401(k) today and pay ridiculous tax rates, rather than having a nice nest egg saved up for later?
Just think: When you’re 70 and broke, you can move in with your adult children! How much fun does that sound?
How to Avoid: Short of avoiding bankruptcy, never ever ever dip into your 401(k). Just pretend like that money doesn’t even exist until you are 65.
6. Student Loans
Oh no! This one is especially frightening. Student loans are those ghoulish creatures that prey on 18-year-olds and haunt their lives well into their 30s and 40s.
But it makes perfect sense to pay $35,000 for a premed degree so you can graduate and sell tractors? Or does it? The student loan crisis in our country right now is two steps shy of a zombie apocalypse.
How to Avoid: Apply for every scholarship and grant you can. Work a part-time job during school and a full-time job during summer. Stay in state. Thinking of going back to school after time in the real world? Ask yourself these questions to help you make the best choice.
Listen: You don't need a quick-fix money trick to improve your financial situation. You need to take real control of your money. For real. For good. How? Check out Ramsey+, your all-access membership to our best teachings on dumping debt, saving money, building wealth, and getting wise to the tricks society's trying to pull over you. Plus, you get all the tools to make it happen, like the premium version of our EveryDollar budgeting app!
And right now, you can test it all in a Ramsey+ free trial. Now that's a real treat. Get started today!