3 Dumb Mistakes to Make when in Debt
Money problems occur in everyone’s lives, at some point of time or the other. While common sense dictates that there are viable solutions to these money problems, sometimes people make really dumb choices pertaining to money during a time of crisis, and which leaves them in greater trouble than before.
So, here are three common (and very dumb) mistakes that people make especially when they’re in debt:
#1: Borrowing money from a payday lender
While these types of loan might seem convenient as you only need to be employed to avail of them. Yet the real issue lies with the amount of interest you’ll have to pay back – around $15 for every $100. What makes borrowing from a payday lender much worse is the fact that borrowers tend to come back for more. Very often, they are known to roll over their existing loan because they can’t pay it back and borrow more, leaving them deeper in debt than usual.
#2: Buying a car from a ‘buy here, pay here’ lot
‘Buy here, pay here’ lots have sprung up in recent times to cater to those who cannot get a loan for a vehicle. Simply put, what is on offer are older, high-mileage cars that are offered at a higher interest rate (about 24%) and requires the buyer to personally return to the location to pay each installment. In the case where one fails to make a payment, the car is repossessed.
#3: Not filing your taxes
Some people don’t file their taxes either due to ignorance or because they’re really disorganized. As for those who don’t file their taxes because they don’t have the money, it’s probably the stupidest mistake you could make.
Reason being: while you might be fined for not paying your taxes, not filing your taxes incurs penalties that are 10 times higher. Moreover, the IRS offers installment plans for those who are finding it difficult.
So, ensure you file your taxes before the IRS decides to take action – action that can lead to bigger problems.