These scary money moves can turn your finances into a horror show

← Homepage



BAD money decisions can give you a bigger financial fright than the scariest Halloween horror movie.

Whether you are borrowing, investing or repaying debt, the potential for painful losses is always lurking, and money experts say knowing the pitfalls is the first step in avoiding problems.

Here are five scary money moves that can leave lifelong scars.

IN-STORE CREDIT DEALS

Interest-free loans for appliances and other large items seem attractive but can later shock you with extremely high interest rates if you dont repay it all within the interest-free period.

Consumer finance specialist Lisa Montgomery says your good intentions in the euphoric moment of buying an item can quickly become a nasty reality check.

A lot of people end up paying in extreme excess of what they should, she says.

Compare personal loans

BALANCE TRANSFER BLUES

Zero per cent balance transfer credit cards are all the rage, but consumers can get bitten if they fail to destroy their previous high-interest card.

A lot of people will keep it in a drawer, and theres temptation to get it out and use it again, Montgomery says. They may use it for a once-off and all of a sudden its back in the wallet and opportunitys knocking.

DEBT MOVES

Consolidating several high-interest loans into your low-interest mortgage only makes financial sense if you remove the temptation to spend up big again, and you continue making repayments at a similar level to your pre-consolidation repayments.

Montgomery says spreading a consolidated debt load over 25 years while making only minimum repayments means you will pay thousands of dollars more in total interest than if you pay the smaller loans off individually.

SPECULATIVE INVESTING

A hot share tip from a friend is no way to grow wealth. Placing big bets on small companies typically mineral or gas explorers can have disastrous results, as these minnows dominate each years list of worst-performing stocks.

Theres investing and theres speculating, and the problem is that most people think investing is speculating, says financial strategist Theo Marinis.

PUSHY PROPERTY PURCHASES

Buying a house before selling your existing property can lead to legal issues, two massive mortgages and enough financial stress to make an evil clown seem funny again.

People can get caught out on timing, says Marinis. You dont know how much you are going to get for your property, or if the market is going to suddenly drop. A potential solution is selling your home first and leasing it back while you build or hunt for a replacement, he says.