Mar 31 2009
Killing Your Financial Self
What’s the quickest way to kill yourself financially-speaking: large fixed expenses. Fixed expenses include expenses that are hard to change. You can change them over time, but it takes quite a while and usually involves a major family shift.
One of the more common fixed expenses is housing. If you buy a home that is too expensive for you, you’re totally screwed. Selling it is time-consuming and costly, not to mention emotionally draining. If you rent you might be able to get out of your lease, but that will be expensive as well.
Cars are another major fixed expense. And boats. And don’t forget anything else that requires a large loan, like rental properties, whole-life insurance policy premiums, etc. Student loans ring a bell? Any cost that is reoccurring and difficult to change falls into this “fixed” category, and if you’re not careful you may not be able to recover from a mistake like this for YEARS!
