Happy birthday! You’re a big boy now – 30 years old! Now what? Party!!! Not so fast. Wisebread had an interesting post a while back suggesting 5 expenses you should ditch when you turn 30. One of them will tell you to pack up the candles and head to the library… You can check out the details over there if you’d like, but a couple of them made me think a little bit. I was surprised a little bit when reading the article, not about the list, but about some of the descriptions. Anyhow, here’s their list, followed by my take.
- High-Interest Credit Cards
- Late Fees
- Cell Phone Ringtone and Wallpaper Downloads
And my take:
- Really? I was most surprised by the sentence: “Making purchases on a card with a 29% APR is not a path to financial independence.” What about 9.9%? Let’s break it down a little more. Almost by definition, if you’re “making purchases on a card” and paying any interest, you’re spending more than you should. In fact, you’re probably spending more than you make. And you’re also likely spending more than you need to on the items you buy. So let’s take this one step further: Just stop paying interest on anything short of a house. Cool?
- Let’s get this out of the way: If you’re paying late fees it’s your fault. I don’t care if you made the payment on the last day of the grace period and the “Internet” caused your payment to be delayed. It’s your fault. You need to plan better so you’re not relying on grace periods and everything going right. So yes, stop these, but don’t wait until you’re 30, OK?
- Partying. I totally agree that you shouldn’t waste money partying. But I disagree that this belongs on this list. Responsible partying (within a budget) is fine if that’s what you want to do and you’re still saving, investing and controlling yourself. I do suggest, however, creative partying. I bartended for 6 years for example (I stopped well before 30 though). If you want to meet men or women at a bar consider working there. You’ll be in the scene, making money and not spending money. It’s one of my favorite ways to save and make money – working where you hang out. Warning: It could spoil it for you.
- Rent. Again, as a “general rule” fine. But if you’re not going to be somewhere for more than 5 years, renting is fine (and probably better). And in some parts of the country renting is way cheaper than owning, even after taxes are considered. Also, it’s nice to just call someone if something goes wrong. Home ownership isn’t for everyone. That being said, in the long term, renting is dangerous because in most cases you can’t control your costs with rents likely to increase with inflation while fixed-rate mortgages don’t (other than taxes and insurance, of course).
- Cell Phone Ring tone and Wallpaper Downloads. Not much to say here. Why do people spend money on these? I never understood that. Then again, I’m cheap.
Yawn. Off the top of my head I can think of at least 3 that belong on this list. Here are my suggestions. I’d say they can replace late fees (your fault), partying (“partying” in and of itself can be budgeted for) and rent (especially for short-term folks).
- Car payments. (Just pay cash, OK? Yes, it might mean you get an older car. It’s OK. I drove a 1997 Geo Metro until June 30, 2009.)
- Cigarettes. Just quit. You’re old enough to know better. I know it’s tough, but so is dying young and broke. Don’t get me started here…
- Lottery tickets. You’re not going to win. Now that that’s out of the way, if you do win then that doesn’t mean I was wrong. It just means lightning struck you. It’s not a financial “plan.” If the lottery “worked” you’d see folks named Buffett and Gates in line (or maybe their personal assistants…). It doesn’t work. Then again, there is (or was) a quirk in some lotteries where high rollers supposedly could time their purchase and spend over $100,000 to win (or something like that – crazy, huh?).
I wasn’t sure where to draw the line. Do things that are dumb for any age count? Payday loans? Cash advances on credit cards? ATM fees? Cover charges for night clubs? “Anything located within 10 feet of the cash register.” Boy I could go on and on. I still think I’ll leave my top 3 as car payments, cigarettes and lottery tickets because I’m pretty sure those are relevant to more people.
What’s your take? Anything missing?
Until next time, put your credit card down and slowly step away from the mall!
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