10 Ways to Go Broke
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- Co-signing for a Loan - If you are helping out a child, friend or family member by cosigning on a loan, do so with caution. Unless you truly trust the person to pay bills on time, don't do it. You may be on the hook for unpaid bills, late fees and damage to your credit. Your loved one may have the best intentions of paying the loan back on time, but as we know, life can happen and destroy your financial well-being in the process.
- Treating Home Equity Like an ATM - Refinancing often and taking cash out on your house can cost you thousands in fees and built-up interest. Doing this also forces you to pay more for your home than what it's worth and will leave you holding the bag when it's time to sell. If you really need something, save for it. If it's an impulse purchase, wait a week to see if you still need/want it.
- Buying a House that's too Big - Bigger isn't always better. Unless you can justify the extra space (i.e., a big family, working from home, etc.) stick with something smaller. Large homes mean high taxes, utility bills, and maintenance that can add up and may not be accounted for when you decided to buy the home. It also may be harder to sell a large home in a recovering or weak economy in the future.
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