Common Financial Traps to Avoid

“Debt is like any other trap, easy enough to get into,
but hard enough to get out of.”
-Henry Wheeler Shaw

[T]here are a multitude of financial traps that have become prevalent in our society today. And no matter if you’re working hard to pay off debt or struggling to pay the bills, I have a feeling that we are all trying to do the same thing…stretch our dollar as far as we can. 

Everything I’ve learned about money, I’ve learned by watching my parents and from my own experiences. I’ve seen all the negative things that can happen from the pursuit of “wealth” and I’m  beginning to realize the peace that comes through frugality.

Yet, how often have I wasted money? Oh goodness…too many times to even count. Sometimes it’s been intentional, but oftentimes I’ve fallen into financial traps without even realizing it.

Common Financial Traps

Here are a few that I’ve fallen into:

1. Paying for it out of convenient. Full-time work schedules, over-commitment, and disorganization — just to name a few — are some of the things that cause us to fall into the financial trap of paying for convenience (i.e. over priced gifts, take-out and other convenience foods, impulse buys, etc.)

2. New technology must-haves. Remember what life was like 15 years ago…when we didn’t have cell phones, laptops, big gaming systems, ipads and ipods glued to our fingertips. Don’t miss understand me, there’s nothing wrong with them except for the fact that each one of these items requires some type of monthly fee or continued purchase in order to maintain them. For a moment, consider the amount of money spent on apps alone! It’s all about balance.

3. Living without a budget. Living without a budget is a guaranteed recipe for financial disaster. Having a plan for your money — no matter how much or how little — is one of the best things you can do to avoid financial traps. When we have a plan we are less likely to fall. Read more here…

4. Spending money to impress others. Everything, everywhere in our society tells us that our success is measured by the type of car we drive, the house we live in, and the clothes we wear. Spending money to impress others is an easy trap to fall into. Truth is, we teach our children to be aware of peer pressure yet we find ourselves as adults sometimes lusting over things that our friends and neighbors have. Read more here…

5. Buy it now, pay for it later. We all have legitimate wants and desires. However, now-a-days more and more people purchase on credit instead of waiting until they have cash in hand. Some do this under the umbrella of “building credit.” Ask yourself, if you can’t buy it with cash, should you be buying it? Read more here…

6. Let someone else do it. Hiring someone else to do specific tasks, jobs, or maintenance around the home, or at work, could eventually lead to thousands of dollars in unnecessary spending. With the wealth of knowledge available on the Internet, we can learn to do nearly anything ourselves! 

7. Not prioritizing health. Being sick ain’t cheap. Doctor’s visits, prescription medications, and time off work can become a rather large financial trap. While not all physical and/or emotional illnesses come under our control, playing an active role in our own health promotion could end up saving us quite a bit.  For example, increasing the monthly food budget by $50 for the purchase of real foods as opposed to heavily processed foods makes good financial sense.

8. Forgetting to price shop. Shopping around and pricing out different grocery stores, farmers, and co-ops no doubt takes a bit of extra time, but it can be a great way to save money.

This list is by no means exhaustive, however financial traps such as these strongly impact our ability to save, give and experience true freedom.

It’s also worth noting that these things in and of themselves are not bad, and only become problematic when they steal our peace and cause us to live beyond our means. Our level of frugality should never be measured by our ability to shop a sale, or use coupons, or penny-pinch. In fact, frugal living is found in the enjoyment of what we already have.

It’s learning to appreciate the physical world that surrounds us. It’s stopping the continual search for more. It’s finding value in all things and learning to avoid the traps.

Now it’s your turn! What financial traps have you fallen into — presently or in the past — and how will you avoid them in the future?

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Comments

  1. This is so true Andrea! I really liked the part of the article where you talked about all the latest technology that we now have. We have an app for this and for that, but how exactly does that improve our lives? The very things that are supposed to help us are actually hurting us. I have so many things that I’ve learned on my own throughout the past several years, but I still have a long way to go. You see, I wasn’t fortunate enough to get a good education while I was growing up, and I was only able to finish the 6th grade. I went to school after that, however, I missed a couple of years of school and never really had the chance to make up for the years of school that I missed. I wanted to get my education, but I didn’t have parents who cared enough to sign me up for school when I wanted to go. I won’t go into too many personal details publicly, but I didn’t just drop out like so many people do. I did get my GED 10 years ago, but that doesn’t make up for the gaps in my education. Not having a good education and not having the chance to learn the basics of money can really make it easy to get into debt and now know how to get out of the poverty trap. Not knowing how to budget can make it hard to save money. Student loans are a killer as well. I’ve never been one to spend money to impress people, however, there are a lot people who are spending money just to impress people that they don’t like. What I’ve noticed about being poor, is that people are quick to judge. Unless a person has walked a mile in someone else’s shoes, they have no clue as to what a person is and has done to overcome adversity. Just like the old saying goes, “You can’t judge a book by it’s cover”. I agree with that statement 100%. Great article as always.

  2. I keep seeing the comment that it is more expensive to eat healthy, whole foods. I have found that by replacing some meat with beans, eating more homemade bread, eating rice, and eating vegetables, we have reduced our grocery budget by $20/week. Obviously, though, others are having the opposite experience. Can someone enlighten me on what is more expensive about eating whole foods? Are we making slightly different choices that add up, or were others finding better bargains than I was pre-whole foods?

  3. Beth, buying and eating organic fruits and vegetables, is way more expensive than the commercial, shipped in from afar types. For someone just beginning, buying a bag of flour and a package of yeast can seem much more expensive than buying a loaf of cheap white bread from a bakery thrift store. Many people don’t know how to cook rice and believe that they have to have an expensive rice cooker to do so. Many people don’t know how to cook beans, and believe that eating them will produce intestinal gas, so avoid them like the plague. Sometimes change seems overwhelming when a person comes home tired from working all day, and the spouse and/or children are resistant to change. It takes a while to accustom you taste buds to new foods. Many, many people don’t eat vegetable and fruits. My husband is a good example, until he met me at age 30 the only vegetable he’d eaten were iceberg lettuce, canned green beans, canned peaches and fresh corn. He grew up in Iowa and Missouri and that’s all he’d been served. He is a meat and potato man all the way. I grew up in San Diego with a mother who loved to try new things so I had tasted tons of vegetables, plus beans and rice in many forms. He doesn’t like the taste or texture of many foods. It makes eating healthfully difficult, but I keep trying. Those are the reasons I see for the differences.

    • Thanks, Rozann, for outlining a variety of ways to go simpler and healthier. I see my excuses in some of your solutions and am prodded to do more. As a self-employed person, however, ready-made food in the freezer is a lifesaver when work schedules extend beyond 9 to 5. Perhaps my challenge will be to prepare it myself rather than purchase it. Balancing time, energy and $ resources seems to be a never-ending challenge.

      • You’ve got it Velma. It is such a challenge to balance it all. You really sound mindful of the struggle and because of that I am certain you will find a solution that fits your situation!

    • Oh this reminded me of when my mother served my husband an artichoke before we were married and he had absolutely NO clue what it was because he had grown up with iceberg lettuce and canned corn. Scary. Now he has tried nearly all veggies and regularly eats things like kale!

  4. This is a great list – particularly about not prioritizing health! Whenever anyone says that good, healthy food is too expensive I tell them that so is diabetes, heart problems and organ failure.

  5. This is a great list of items to take into account.
    Another issue is for those of us who apparently have “sucker” written across our forehead. Not just in being taken advantage of when something needs to be repaired or in new purchases (such as vehicles), which happens to many women. Another way is when we get guilted into spending money we don’t have or don’t wish to spend because it is excessive and we know better, but those we care about give us various guilt trips into loaning them money or spending additional on them or ourselves (because it reflects on them for us to spend more). Yep, our keeping up with the Joneses can sometimes be due to giving our parents bragging rights. It is an expensive lesson to stand up and say, I am comfortable and satisfied and the way I live will allow me to continue to be comfortable and satisfied.
    We (my spouse and our family) have come through some difficult times; however, it has been good for my perspective. I understand poverty, hunger, wondering if we will have enough food to eat until we are paid next, and buying or being given a car that breaks down continually and keeps us continually struggling. We have been through that. Through continuing to stay on a budget and hard work and above all, through God’s help and provision, we are seeing light at the end of a long tunnel. Now we are in a position to help others who are struggling. It is good that we gained that appreciation and understanding so we can be more compassionate and empathetic with those who are in need of a hand-up, unlike those who look down their noses. I can also help others who are not in that boat understand what life is like for those who are struggling to cover basic expenses and the obstacles they run into. It is a blessing to have endured.
    It has given me a confidence in our ability to trust in God’s provision for us when we do our part.
    As for the question about the cost of healthy foods versus processed and packaged foods, yes, healthy foods are much more costly. When you have hard-working men who come home wanting meat for dinner, does one buy processed wienies at $0.89 per package or chicken, pork, fish, or beef for substantially more? Does one eat pasta or brown rice? Do you ration milk for your children or family? When it is 115 degrees outside and your garden goes to pot, as does everyone else’s in your area, fresh vegetables shoot up in price. When everything goes well, you can use fresh-from-the-garden veggies and can what remains so YOU know what is in them. I agree with the point in the article, add more to the budget to get the healthier foods and take away from other areas of the budget that you can squeeze some room. I have been through times, where we had no choice but to get the cheapest weinies, eat pasta, tuna-mac, and red beans for weeks with minimal fresh veggies. We were grateful for good fishing – those were nice Daddy-child opportunities, too. Sometimes, one just has to do that to get out of a hole (like from necessary repairs on a car that were outside of what one could budget for on an already tight budget, from times when everything gets turned upside down in life do to job loss, disability, or illness, or from making poor judgments with our money originally). It is not a forever prospect. We set the goal to eat better and as our budget improves, replace one processed something with one something that is a healthier choice.
    When we can, we need to help others, share from our gardens what God has blessed us with, and not feel guilty if money is tight and we cannot eat the healthiest foods for a little bitThat can be the goal. Finally, NEVER feel guilty about not keeping up with the Joneses, but being in all things satisfied with what God has given us – our friends, our family, our food, our shelter, and the clothes on our backs.

  6. Great article! I’m a new subscriber to your blog and have enjoyed it very much. I think contentment is one of the best gifts we can give ourselves.

  7. Good list. Like you (I think), though, I believe there are appropriate times to spend more for sanity’s sake. If we are going through a rough season of life then spending some extra $ on healthy but store-bought snacks can make sense. Outsourcing some yard work or even cleaning can be ok for a time if it means not falling apart ourselves.

    Recently I was considering buying an ipad but thankfully it was my teenage son who helped me see all the potential “hidden costs” and I opted out. Not that we don’t enjoy technology but we don’t love being sucked into extra bills and the resulting stress.

    • Absolutely, it’s all about balance, the only problem I see for myself is when I started outsourcing this stuff and I it pushed us to live beyond our means. Good job for resisting the ipad! I want to high five your son…impressive for a teenager :) Good job Mom!

  8. Great post and very insightful comments.

  9. I can completely agree with everything you said! One more point that I’d like to make is that it takes both people in a relationship (assuming that you are with someone) to be on the same page of music when it comes to finances. If one person is really frugal, but the other isn’t so much, then compromises have to be made. Sometimes those compromises won’t seem really frugal or wise. But harmony is just as important as avoiding the financial traps that are out there.

    Sandi

  10. I nominated you for a Versatile Blogger award! Swing by my page to pick it up :)

  11. Excellent post. Love #7. Health is a priority. I recently heard a woman comment that a lot of people who say they can’t afford to eat healthy food often drive very nice cars. We make time for what’s important to us. The same goes for money. If it’s important, we find a way to manage. Thanks!

  12. Thanks for all of the responses. I am seeing that there was probably a difference between the choices made pre-whole foods. It was interesting to read everyone’s personal challenges with converting themselves and others to healthy foods.

  13. Thanks for the reminder! I especially like forgetting to price shop. It’s SO true!

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