You always gotta be careful with your money, friends!

I know that sounds like basic advice but believe me when I tell you that people make really bad financial decisions every single day that end up costing them everything they have.

And it’s a darn shame.

Let’s dig into some stories from folks on AskReddit.

1. Oops!

“My brother had a long standing client of around 10 years get married after only knowing a woman for 12 months. He was almost 55, she was in her early 30s.

55 y.o. man wanted to add her as a signatory on his retirement account. Basically giving her 100% power over the account. A quick soft credit check showed she was not good with money.

My brother offered up many different options as to how to give her access to the money but with limitations. He even straight up refused to do it, saying that he needed to think about it for a few days.

The guy came back in the next morning saying he would file a complaint against him if he didn’t set it up. My brother said that he would need to get the documents notarized, and sign a waiver that this is against the institutions advice.

The guy comes back in later that day and finalizes the deal.

You can guess what happened within about 6 months.

The account had around 600k in it to begin with, and she had managed to run off with about 65k before the account was frozen by my brother for review of withdrawls.

The man was f*ckin p*ssed and tried to lawyer up twice. Neither time did it even go to court.

His advice is that if you are married and have investment accounts, just keep them separate unless you REALLY have a reason to give them access.

You can totally notify the agency about your marriage, and sometimes in certain situations the spouse can get limited info confirmed for medical bills and such.”

2. Terrible decisions.

“Making over $250k (sometimes WELL over), no withholding, not paying estimated taxes throughout the year, can’t afford the tax bill with the return EVERY YEAR, then b*tching because they can’t afford the installment payments on the taxes they owe from two years ago.

Sell your gaudy McMansion, take your teenage daughter’s credit card away, let your drunk driving son stay in jail and get a public defender, and tell your b*tch wife to stop spending all day at the tennis courts sipping mimosas.

Get your sh*t together and pay taxes throughout the year like the rest of us. You aren’t being persecuted by the IRS, you’re just an idiot.”

3. Wow.

“I work for a bank. One of our branches had a customer who was basically homeless. Then, he wins the lottery!

Over the next few months, the staff watched him come in to withdraw thousands of dollars every day to spend on extravagances. Everyone tried to convince him to sit with a financial advisor to help him make the most of his money.

Less than a year later, he’s in slightly better shape than when he started; he’s at least able to live in the car he bought.”

4. Come on!

“I’ve had a client where I noticed this guy’s credit debt always remained hovering $13k to $15k… I asked him why he only makes minimum payments on his credit card instead of paying it off, because I see he has roughly $11k sitting in a bank account.

Interest per month on that credit card bill is roughly $250, and according to his repayment patterns it will take him roughly 19 years to pay it all off.

His answer to me is the bank charges him $7.99 per month for his bank account if his balance dips below $10k… So to save the $7.99 per month this guy is paying $250 in interest on his credit card.”

5. Gotta do your research.

“What I’ve seen, countless times, is someone who started a business with ZERO research, no understanding of what running a business involves. (Here’s a hint: practically every business involves paperwork and deadlines.).

The business models come in waves… for a while it was Barbecue shacks, then it was cupcakes, then house flippers, then food trucks. I think they see it being done on TV shows that make it look fun. It isn’t fun when they come to me with debt, tax levies and lawsuits. IRS and state labor department and health department on their backs, and suppliers taking them to court for unpaid bills.

Some of them cashed out their retirement account to buy a business; others put their house up as collateral for an SBA loan. it’s a nightmare. If they had come to an accountant first, we might be able to help them (or even better, dissuade then).

I usually see them after 18-24 months of screwups and by then it’s usually too late to rescue them.”

6. Those fees add up.

“I’m a banker. Banks charge fees for using other bank’s ATMs.

I had a customer that would check his balance and then do withdrawals daily at a foreign ATM. Guy did not have a lot of money to begin with and because he did this, would overdraw his account and get slapped with an overdraft fee which put him in the hole further.

We ended up taking away his ability to overdraw his account. Dude was p*ssed but it helped right the ship a little.”

7. All gone.

“Bank advisor here, a customer got an inheritance, about 200.000€, and just spent in like 2 years, not investing it or putting into a savings account.

Didn’t even buy something big like a car our part of a house, just spent too much every month for two years and it was gone”

8. The car game.

“Claims Adjuster here, and I see it happen all too often – trading in vehicles with negative equity.

Why? Why can’t you be financially responsible and pay off your vehicle instead of rolling the leftover loan onto that new shiny machine you just can’t resist, and rinse/repeat a couple of years later. Your loan is just getting bigger and bigger.

I had one client (recent, otherwise I had more than that) – who totaled his vehicle. He blew past a stop sign and collided with another vehicle. Guess what friend, out of that $70,000 you still owe to the bank because you’ve traded in 4,5 vehicles over the years – we are only covering you for what your current vehicle is worth today, around $25,000 or whatever it was .

Depreciation applies unless you have the proper endorsement in place. That means you will be paying the bank for the leftover loans of some vehicles, none of which you own.

Own one vehicle, one loan – if you ever totaled your vehicle, insurance will provide you enough to cover the loan. If it doesn’t quite cover it because of high interest, it sure as hell isn’t a $45k loan left.”

9. Listen to your accountant.

“Best friend is a CPA, and when he had his own practice, he had some pretty big-name clients (Senators, musicians, pro athletes, etc.).

One of the biggest mistakes people made were thinking they were smarter than an accountant. His biggest challenge were the people who heard about the “sovereign citizen” nonsense. To no one’s surprise, a random guy on YouTube doesn’t know more than an actual CPA with 40+ years experience.

At least a few of these new-found “sovereign citizens” ended up doing time for tax evasion.”

10. Ouch!

“A private company announced a special dividend to all shareholders as of date of record one-month in the future. $1.30/share dividend.

There was an option holder with 300,000 options at a $0.10 strike price.

He did not exercise them. Had he exercised his options for $30,000, he would have been paid $390,000 the following month.”

11. Some people…

“I used to work for a company with an actuarial Department. There was a lovely young woman working in the call center with a masters degree in data science.

She was constantly talking about how frustrated she was with making $16/hour in a call center when she had a masters degree in data science, yet no matter how many times I told her to apply to the actuarial team she wouldn’t do so. The actuarial team was HUGE about promoting within.

I saw many people who wanted to learn more about what they do who had no experience whatsoever get excepted into the team because they wanted to learn. This girl was a shoo-in. And yet she never even tried despite the fact that there were always openings.

She also shared with me that she was $180k in debt for that master’s degree. Last time I checked in with her she had left the job completely and is now in school for art. (Insert facepalm emoji here.)

But my favorite was before I was even an accountant. I worked for a small CPA firm as a receptionist during tax time. I saw a full-grown woman sit down on the floor and start crying because she owed $900 in taxes that year when she had made about $150k that year.

I rolled my eyes so hard that I hurt myself. Later that day I had a guy who owed $750k to the IRS and said “woohoo! That’s way less than last year!””

12. Sad stories.

“A client who joined an MLM and racked up half a million dollars worth of losses before finally listening to us and quitting.

The client who spent $40k on Farmville over 3 months.

The clients who give their adult children allowances that exceed my salary, fancy cars, and houses without expecting them to ever hold down a job themselves.”

13. Bad idea, sir.

“Watched a client walk out of my office after I explained the risk in liquidating his 401K to start his own business.

He started it with no management experience or business model, real “fly by the seat of his pants” kinda guy. Wanted to start a career flipping houses in a college town, turn them into upscale rentals.

Did it in a bad neighborhood and lost EVERYTHING.”

14. It’s dropping.

“I had a client in her 70s put her whole savings in Tilray stock. Tilray at the time was trading above 150 per share. I told her it was a terrible idea to put all of her savings in one investment but she told me I was wrong.

She argued with me for a good 15 minutes until I relented and said okay, it’s your money. So she put 300k into Tilray.

Couple weeks later it starts dropping, I call her and get no answer. It’s sitting at 6 dollars a share now, her account is down to about 12k.

Last time I spoke with her I took no pleasure in telling her she’s no longer my client.”

15. Brutal.

“I know a guy who lied to his wife for maybe 3 years about paying taxes and him “doing the books.”

Owes like $400,000 plus interest to the IRS. It’s brutal.

They’re old and can’t make enough now because he lost his license for his work.”

16. Yikes.

“I had a client buy numismatic gold coins with an entire retirement account. She bought 266k worth of coins at almost double the price of bullion.

I got the gold salesman on the phone and asked him to justify the reasoning and I he said it was because the dollar was paper money and worth nothing and that gold was going to go to 10,000 a coin. I asked him what he exchanged this gold for and he said “well she paid me dollars”.

Then I said “why would you accept a worthless currency for your rapidly appreciating gold currency?” He cursed at me and hung up and said I didn’t know what I was talking about.

I still haven’t met a gold salesman that can answer this. Their whole pitch is that the dollar isn’t worth anything but they happily take them in exchange for gold coins.

The whole thing is sh*t. Poor lady. She can’t sell them now even with gold bullion as high as it is for anything close to what she bought them for.”

17. Bad investment.

“Saw a guy invest about 600k in a start-up. He confirmed in the 1.5 pages agreement that he was fully informed about everything going on.

Please if you invest in that size, ask a lawyer to at least review the agreement.

Needless to say, said guy’s net worth is 600k less now.”

18. Taking out a loan.

“I had a client that had the money to pay for his kids college without taking out any loans. Instead, he decided to take out a loan on his house to pay for college in order to claim a deduction on his tax return.

When I explained to him that the benefits he’ll get from claiming the interest deduction on his return would not outweigh the amount he spends on interest he was certain I was wrong, even after I showed him the total amount of interest he’d pay and compared that to the expected tax benefit he’d receive for it.”

19. Tried to time the market.

“The client who tried to time the market with the coronavirus drop back in March. He was 55 and had a 7 figure amount in his 401(k) and was 90:10 equity:bonds.

His plan was to time the market by shifting his entire allocation to a money market/ bonds, wait for the market to drop more, and then shift back into equity. This was at the end of March.

I tried to warn him. He didn’t answer my subsequent calls.”

20. Big debt.

“I’ve had SO MANY people with credit card debt who talk about investing/ saving for a big purchase, but they have 5 figures of 20%+ credit card debt.

“I’d rather focus on investments for this call” well you’re gonna get 10% in the market if its a decent year and you’re paying 26% in interest so you’re losing money. You have a 50% debt to income ratio, you can’t get a mortgage.

Yes, I know the kids really wanted a pool this year, but you have $50,000 of CC debt to pay down before it makes sense for you to start saving for their college.

90% of the time they seem irritated and ghost me because I don’t have some magic solution to make their credit card debt disappear.”

21. Pay your taxes, dummy!

“8 years ago, a wealthy client said he was no longer going to use our services. Okay. No worries.

Last year we get an extremely angry phone call from his wife asking us why we haven’t been filing their taxes. We showed her the paperwork where her husband stopped working with us. He apparently just decided he wasn’t going to pay taxes anymore and didn’t file a return for eight years and had been lying to his wife.

They were rich and owed almost 1.4 million dollars in taxes not including interest and penalties. And oh yeah they got absolutely fried by the IRS. If you are in a relationship with someone you need to be involved in financial decisions.

Never let one party handle all of the money and make all of the decisions. That is how bad things happen in both business and in relationships.”

22. Don’t give it away!

“I had a client who wanted to know how to give away her 401k because her and her husband’s pensions were already enough for their lifestyle and she didn’t want to be in a higher tax bracket.

She was in her 60s, worth millions, and did not understand how marginal tax brackets work. Or even basic math. She wasn’t looking to get a deduction through gifting stock. She (clearly) was nowhere near that level of understanding taxes.

She just spent her entire life working hard and being extremely frugal, which led to her being a millionaire who lacked a basic understanding of money.”

23. Scammed.

“Former manager at a credit union. One seemingly smart lady in her 70s got one of those lottery scam letters saying she won, but needed to send them money to process her winnings.

They kept getting her to send more and more money. We were telling her it was a scam from day 1, but we couldn’t stop her.

She burned through her IRA which had about 200k. Took out a loan against her paid off house for another 200k. Sold her jewelry. Probably paid out 500k total before finally realizing.

We truly did everything we could. Got her family involved. Several of us would confront her every time she came in and would plead with her to stop.

It was sad but at some point you have to cut your losses and realize it’s a scam.”

24. Lottery winner.

“I had a client that won the lottery.

It was a $10,000/month annuity FOR LIFE, give or take. Pretty sweet deal, right? Well, he never went and claimed the prize because he didn’t want to pay the taxes.

I told him f*ck the taxes, he can retire and never work another day in his life while still earning $120k/year. Nope, he’d have to pay the taxes so he didn’t go claim the prize. I think he even threw the ticket out. Dude makes like $60k/year and he turned down the lotto winnings.

Like, if you’re not going to claim the winnings because you’re THAT against paying any sort of taxes why bother playing the lottery at all?”

25. A shame…

“Former bank teller here. Not sure if this quite fits the question but here it is.

Had an older gentleman who would typically only come in once a month and pull out a few hundred dollars for living expenses, nice old guy btw. One month he comes in twice in two weeks and pulls out $5k which was bizarre for him.

When he came in the third week in a row I planned on asking him if he was remodeling his home or something but I didn’t have to. He came in to get another $5k out and told me he had won the lottery but had to pay the taxes on his winnings, some of you already know what’s going on.

He had received a letter that he won around $3mil from the Kentucky state lotto, we were in Florida, but before he could claim it he had to pay the taxes on it. His account was setup that you could only withdraw $5k a week hence him coming every week. I tried to explain to him that he was being scammed and to stop sending them money.

He was no longer a nice old man when I said that. He accused me of being jealous of his winnings and that “he’d show me” when he deposited his millions in a different bank, then he left. I talked to my manager who then talked to the cops and they said there wasn’t much they could do since it was out of state. His family even contacted us and begged us not to give him anymore of his money when they found out what was going on, which we cannot legally do.

The only thing we could do was close his account because we didn’t want to have any responsibility in his downfall. He came in the following week, manager explained what was going to happen, and he left with a cashier’s check after quite a few more expletives. Found out a few months after that the scammers got another $50k out of him before his family was able to get power of attorney and control over his finances.

Not sure what happened to him after that but it’s a d*mn shame.”

Man, those are rough…

Now we want to hear from you.

In the comments, tell us about the worst financial decision you’ve seen someone make.

Hopefully, they aren’t about you…thanks in advance!