It’s none of our business how other people spend their money – at least unless they’re always asking us to borrow some – but sometimes it can be tough to miss the telltale signs that friends or family are living above their means.
These people are sharing what they think are red flags in other people, ones that scream “I make poor financial choices,” so let’s see what they have to say!
1. It makes no sense.
Rolling car payments into your next car. I can’t count how many people I know who traded in perfectly functioning cars they still owed money on because they “needed something newer” or “outgrew their current car”.
I know someone who was paying $900/month for a Hyundai Tucson that was listed for like $25k. It ended up getting repo’ed.
It’s called rolling negative equity, and it’s a bad idea, indeed. I did this once.
When I was several years younger, I bought a brand-new 2014 Jetta SportWagen TDI. Nine months later, I was at the VW dealership, and the new version (this time called the Golf SportWagen) was out. I asked if they had one, and they did. And I bought it on the spot—a fully loaded TDI SEL. Since it was so new, I paid MSRP, plus the taxes got rolled in. They gave me $21,000 for my Jetta SportWagen that I owed $27,000 on, which meant that I financed in $6K of negative equity.
And that is how, even with a decent interest rate, I ended up with a $715 car payment on a fucking Volkswagen.
I made out lucky because VW bought back the Golf SportWagen during the diesel scandal (and VW Financial canceled the remainder of the loan balance), but I will never ever do that again.
2. If that kind of thing appeals to you.
We live in a very cheap, neglected apartment building but someone here owns an Audi. With a cheaper car, they could live somewhere with hot water and no rats.
3. Red flags are waving.
“We’ve been dating for 3 months, of course let’s join bank accounts”
Thats not a red flag, thats crimson!
4. What is the point?
Wearing designer wear but struggle purchasing anything else.
Wearing dior but sleeping on difloor
5. It’s the combo.
Weekly overdraft notices from the bank, along with a stack of boxes from Amazon orders
6. Smells a little desperate.
Participating in a MLM scheme.
You know, this amazing opportunity isn’t just for money! I could help you get your pre-kids body back, too! I saw the latest photos you posted and your kids are so cute. Just thought you might have been trying to hide behind them. You don’t need to! Your body can be as beautiful as your face!
I’m starting a charity to raise awareness of pyramid schemes.
Donate $100 to register as a fundraiser and you’ll receive 10% of all donations you raise.
7. All too common.
This probably isn’t as common anymore, but 15, 20 years ago, going into Gamestop and trading in a pile of games for cash (which we all know Gamestop pays pennies for most trades), and declaring intent to spend it on cigarettes.
I saw it weekly when I worked there.
8. New cars seem to be a theme.
When there is an old sofa, broken fridge, and new Audi on the drive.
9. Sometimes less is more.
Getting another pet when you can’t afford the first one.
Getting another baby when you can’t afford the first one.
Getting a pet when you can’t afford the vet bills.
10. They’re not necessities, people.
Tattoos when you barely made enough for rent after borrowing money.
Weed before child support
People who eat out for every meal. I had a coworker who did this, but then complained about never having any money. She’d eat out for breakfast and lunch and go down to the Walgreens for a midday snack.
11. You hate to see it.
My sister and her husband had roof damage from a winter storm. Got an estimate for repair and the homeowner insurance sent them half the money. They never did the repair (therefore never sent in the completed job/invoice to get the rest of the $$$). They spent the money on bs.
The house has fallen into such disrepair it’s disgusting. Their front door hasn’t been able to open in at least 10 years.
12. You just have to save up.
Rent a center.
I did an install for a women who just got a new laptop from a rent to own. She was so happy with the deal. She excitedly said she got it for $100 month for 36 months. I was like, ma’am I just bought a laptop for $400 from FutureShop.
13. Maybe they didn’t want a bigger place?
Ahh I feel bad saying this and I, in NO way, am talking crap about anyone who lives in a mobile home.
My husbands family is a family of EIGHT. They lived in a two bedroom mobile home where they barely paid much in rent and had everyone squished 3 to a room, some sharing a twin bed. But each of the ones who could drive which was like 4 of them, always had a car that was brand new and of the year. Not used or anything. Had to be brand new no miles.
They could have easily gotten a bigger place but they never wanted to because they liked having nice cars and knew if they got a house or bigger mobile home they wouldn’t be able to afford the new cars.
14. In a nutshell.
every one of these posts says the same thing : spending too much money on depreciating assets when you don’t have any appreciating assets.
15. Be careful with that.
Filing for bankruptcy then immediately buying a new car with rims and new bolt ons. I work with this type of person who also complains about having to work and always trying to leave.
My roommate is an attorney who deals in debtors rights. He’s told me before that even if you file for bankruptcy, creditors can still go after you for stuff that you bought right before you filed for bankruptcy.
16. Not a steal.
A former (contract) employee of mine was a strange fellow. He came into work one morning all excited because he bought two cars over the weekend. We all asked him what he got. “I got a new Maxima and an Altima, and I got them for a steal!”
Oh? A steal? Please, go on.
“24% interest for 72 months!”
The room went dead silent. $32k + $24k = $56k, at 24% over 72 months winds up being ~$106k over the life of the loan.
One guy said “Dude, you are going to pay so much over the life of that loan, you could have bought two more with cash…”
His smile slowly went away. Before the end of the week he had sold both back to the dealership for a massive loss and bought two crapboxes.
17. How do they get financed?
My cousin who has declared bankruptcy multiple times always seems to have a new car.
My ex declared bankruptcy then upgraded from a tiny efficient car to a Dodge Challenger, which I refer to as the MidlifeCrisismobile with its turbocharged engine to help you power away from your responsibilities.
He bought it from a “bad credit, no credit, no problem” dealership.
18. Their poor parents.
Seen a few people buy nearly all infant/baby/toddler cloths new from expensive brands. The most insane, a $350 dollar Canada goose winter jacket for a 4 month old. Jacket barely covered the winter and then was too small.
Oh and nearly everyone I know that does this needs their parent’s help each and every month to cover rent or mortgage payments.
19. That’s one investment strategy.
When “saving for retirement” means dumping huge sums into the lottery.
20. Why on earth?
This is my sister to a T. She had a baby and most of what she was asking for on her registry, I already owned. I offered her my stuff for free and she turned me down. Why did she turn me down you might ask, well it’s because she wanted “to go through the process” of purchasing new stuff for her daughter.
My sister married into a very wealthy family and has expected a certain level of gift giving. Nothing on her baby registry was less than $250. The level of entitlement is what ended our relationship. I haven’t spoken to her in 3 years and I honestly don’t think I ever will.
21. Pretty cringe.
Expensive clothes complaining about a lack of money.
I let a friend stay with me years ago after she got herself into financial troubles and had nowhere to go. She comes home one day raving about the $100 yoga pants she just bought at Lululemon.
I asked her if it was such a good idea to be spending that much money on yoga pants considering her situation and considering she didn’t even do yoga. She literally went back again the very next day and bought another pair.
Kicked her out after living with me for 8 months when I realized she was making no effort to improve her situation.
22. Meet every adult with ADHD.
Getting into a new hobby and by week 2 you have all the latest and greatest professional grade gear.
The dangers of having both ADHD and a disposable income.
23. It’s like a country song.
Having a really nice car that you can’t afford to put gas into.
I got myself a Cadillac But I can’t afford the gasoline I’ve got holes in my shoes And I’m way overdue Down payment blues
24. It’s a one-day party.
get into debt to pay for a wedding.
I read a post on here one day suggesting it’s better to save on the wedding and splurge on a honeymoon and that made so much sense. I’m not married but that’s what I would do.
25. Like it was burning a hole in his pocket.
I dated a guy who always impulsively spent his paycheck. If rent came a day or two after payday it got paid. If it came a day or two before payday it didn’t. It didn’t occur to him that he had to budget his check to meet expenses.
His mom had always covered everything that he didn’t pay so he never had to think about what his check needed to cover.
After while his car didn’t run and he couldn’t fix it and he had to move out of his apartment because he didn’t pay rent.
26. A vicious cycle.
Relying on pawn shops every time you’re low on cash. I knew a woman who regularly pawned some jewelry, then got it out on payday, only to pawn it again a few weeks later.
It’s a vicious cycle. I got caught up in it for years in my early 20s. It all started because my roommate went to jail for 30 days. I was a cook living paycheck to pay check, then suddenly needed to cover the other $400 of rent.
I went and got a payday loan. Next month when I got paid I paid it off, but then was once again a few hundred short. I made poor spending choices all along the way, but ever other month I was going from one payday loan place to get a loan just to pay off the other payday loan place.
Back and forth for quite some time until I reeled in my spending and started making more money.
27. That almost never works out.
Frequent gambling. More specifically, the people that always have an excuse to keep gambling.
“I win more than I lose.”
“You gotta have skin on the game to make it more fun.”
“I won’t be able to sleep tonight if I don’t check the scores.”
“Can’t end on a loss.”
I have an uncle that almost lost his house by blowing the mortgage checks on sports and poker bets. Nobody, including my aunt, knew anything was wrong because he was intercepting the notices from the bank. We just thought he really loved watching sports.
Turned out he was betting on every game, and nobody is lucky forever.
28. It happens to the best of us…but not every month.
Having too much month at the end of your money.
29. How can you help someone like that?
I am a real estate agent and I work leads with my lender.
We met this lady about 4 months ago who had bad credit and low income. We helped her identify what she needed to do to get better credit and she said she may get more money soon.
We follow up last week, she got a new higher paying job, but when he ran her credit, he saw she just purchased a $64,000 car. He told her “things look better income wise, but the car payments take up pretty much all of your debt to income ratio”
She said “I just can’t win. I gotta get to work somehow!”
With that kind of car, I bet she gets to work real fast. My lender said the only house she will get approved for now is a gingerbread house
30. The face you make…
Buying a 2nd car (convertible Corvette) after getting laid off during the pandemic. Shoutout to my neighbor.
Or if all of my middle aged friends are any indication…a Jeep Wrangler
31. Some people have zero money sense.
I recently moved out. My old roommate, who was already financially unstable is staying in the house. Which means his rent went from $530 to $1060. Two weeks before I moved out, he decided to upgrade his car. I told him to shop around, look at different APR rates etc.
He came home with a car worth 23k <at the max> Bought it for 28k with a 6 year loan with 10% interest. Six years from now, he will pay 38k for a 2015 Scion SRF. Cheers.
I think I agree with many of these, how about you?
What else would you add to this list? Share with us in the comments!