NEW YORK (MainStreet) Personal finance can be confusing, and we're not taught much about it in school beyond how to count money, make change and calculate interest. By the time you graduate, you're already in debt, and it only grows more solid as you settle down, purchase a home, and establish yourself. Over time, however, you may find yourself slowly slipping out of debt, as all those pesky payments slowly chip away at your life's work.
There are booby-traps out there, flagrant red flags: below MainStreet has compiled a list of tried-and-true methods to ensure your family stays in debt long after you move on from this world. Be sure to follow these if you want to lose financial freedom completely.
1. Wing It
Budgets are such a waste of time. Who wants a constant reminder of how much they make and spend? It's a downer and a waste of time you could be using on something more important, like spending more money. When you run out, your bank will cut you off for a small convenience fee or two...or ten it doesn't matter how many there are, because you're not tracking it. Balancing a checkbook is so 1985, and smartphones don't have the hard drive space for money-management apps like Mint.
"Overdraft your account and ignoring it is a fast way to debt and a bad banking reputation," offers Greg Meyer at Meriwest Credit Union. "You can be reported to ChexSystems and be locked out from accessing a bank account for five years."
2. Treat Yourself
You work hard for the money. It's been, like, two weeks since your last paycheck, and you've been broke for the last week of it. This is America, and you work hard you deserve the best of everything money can buy. Cable companies offer at least a dozen 3D broadcasts, so you'd be doing yourself a great disservice not to get a TV that can display them properly. And what kind of animal doesn't have the latest smartphones and tablets?
3. Beat the Joneses
Fitting in is absolutely vital, so if your neighbor gets a new car, you need one too. Come to think of it, you have a better job than Mr. Jones, so you should have a better car. Get that thing fully loaded. Let's see how cool he thinks he is when your daily life resembles a Lil Wayne video. You have to buy respect in this world, so spend accordingly.
"Companies spent over $3 million dollars for 30-second ads during the Super Bowl, because the ads work," says Gene Natali, Jr., co-author of The Missing Semester. "We are susceptible to the temptations and consumerism that surrounds us."
4. Pay Retail Prices
Haggling is for poor people, and you're not poor. It's so embarrassing when people waste time negotiating prices, couponing and all those other poor habits. It's also a little selfish a car dealership can't stay in business if nobody's paying the sticker price. You already know all of this though, so what do you do when you're at the store with someone who doesn't?
Teach them subtlety, says consumer saving expert Andrea Woroch. "You can access mobile coupons for savings using your smartphone with apps like CouponSherpa or Target's Cartwheel," she says.
5. Charge It
Credit cards are like Pokémon you have to catch them all. You can't win if you don't play, so apply for every credit card offer you get. Unfortunately many cards (particularly store credit cards) come with strings attached, which often include a discount and temporary 0% financing. While you can't do much about the discount, all it takes to raise your interest rate is time. People forget that after the initial six- to twelve-month period, your interest will be comfortably in the double digits.
"Take advantage of low- or no-interest offers for balance transfers," says Tiffany Franc, a bankruptcy attorney in Maryland. "1) fail to stop using the credit card they have transferred the balance from, thereby creating additional debt and 2) fail to pay off the balance transfer."
While you're waiting, use those credit cards to pay for everything. Your credit limit was determined by a team of financial experts who know more about your finances than you (see #1 above). They wouldn't have approved you for the card if you couldn't handle it.
6. Borrow from Everyone
Being an adult means handling responsibility, so if it doesn't fit on your card, take out a loan. You need a mortgage and car loan in order to be mature that's why they have a maturity date. If you fall behind on those payments, don't fret. You can borrow money from friends and family, or, if they're ahead of you in the debt game, you'd be hard-pressed to find a street in this country without a payday or title loan business.
7. Trust Your Bank
Your bank is a part of the family. Those people complaining about foreclosure fraud, predatory lending, and all these other buzzwords are deadbeats who didn't pay their bills. They probably have a drug problem. If the banks were really breaking all those laws every media organization, analyst, and politician in the world says they are, our government would've stopped and punished them by now. Since the banks are still in business, it's safe to assume they're trustworthy.
8. Major in Liberal Arts
Eminem and Justin Bieber are among the most successful musicians in modern history. They never could've accomplished everything they have without their college degrees in music. Everyone knows it takes money to make money, so take out as many student loans as you can and get the highest degree possible.
"Student Loans are good because they further your education and could lead to a fulfilling career," offers investment advisor Phillip Christenson. While everyone else is wasting money on silly non-essentials, you'll have a Doctorate in History with a minor in Sanskrit from the University of Phoenix.
9. Deny Everything
It's in poor taste to brag about your debt. Anytime people talk about theirs, distract them from discovering yours by pulling out a stack of $20s and making it rain. That may be enough to distract the layman, but professionals are harder to convince. Don't answer the phone to creditors, and they'll eventually go away. Even deny it to yourself.
"It is very cliché to ask the question, 'Can I do without that expensive cup of coffee as I head into work, and replace it with the free coffee at work?'" adds Kevin Gallegos, vice president of the Freedom Financial Network. "This is just the type of disciplined act that will start accumulating savings."
Getting into debt is a lot easier than it looks. It moves slowly at first, but once you get the hang of it, it becomes second nature. The more you spend, the more credit financial institutions will give you, and the easier it'll be to build up that pile of insurmountable debt. Just like everything else in life, it just takes practice. So throw your cash in the air, and spend it like you just don't care.
Written for MainStreet by Brian Penny, a former Business Analyst at Bank of America turned whistleblower, consultant, and blogger.