50 Things You Should Never Do With Your Money

Updated: Jul 17, 2023By Daniel RosenblatBusiness

This article originally appeared on Investing.com. It has been republished here with permission.

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People work incredibly hard for most of their lives so that when they get older, they can relax and enjoy their twilight years without the stress of trying to figure out where their next bill payments will come from. Unfortunately, not everyone makes it to senior citizenship with enough savings to make that a reality.

From the creative ways you can organize your savings to some of the pointers that should reduce the amount of unnecessary spending you do, these are some of the ways to help grow your savings instead of spending them.

1. Don’t Make Insurance Your Only Investment

Risks Involved: Riskier Than Regular Retirement Saving Vehicles
Potential Savings: $100+* / Month

Investing in insurance is great for those with higher income sources, but for the average American, the safer bet would be sticking to their 401(k). Although there are no sure things in life, a retirement investment fund like the 401(k) comes pretty close.

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When it’s time to retire, pending a catastrophe, your 401(k) should have at least what you’ve put in and a little something extra. On the other hand, should there be a disruption to the economy, an investment in cash-value life insurance could turn sour quickly.

2. Don’t Post Money or How Much You Make on Social Media

Risks Involved: Fall Victim To Fraud
Potential Savings: Infinite

Social media has become the prominent method by which people stay connected. There was a time when everyone was afraid to put their personal details online. That’s not the case anymore. These days people post everything about themselves online, including how much they earn and pictures of their paychecks to prove it.

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There are no reasons that justify posting one’s financial details for the world to see. Also, if you win big at the casino, don’t tweet a pic of yourself rolling around in cash. You may as well be inviting someone to rob your home.

3. Don’t Donate Money Over the Phone

Risks Involved: Identity Theft
Potential Savings: Incalculable*

Always be wary of charities that ask for personal details and credit card information to be given over the phone. Not everyone is out to rip you off, of course, but there are several scam artists out there who prey on those who don’t know any better.

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Too many people are falling victim to identity theft and losing thousands of dollars of their hard-earned money simply for trying to give to charity. All legitimate charitable foundations should be able to send information about their organization to anyone who asks. Do your research and donate wisely.

4. Don’t Buy Into An Investment That Sounds Too Good To Be True

Risks Involved: Getting Scammed
Potential Savings: Thousands

As a general rule of thumb, if you’re told an investment is a “sure thing” it’s best to stay as far away from it as possible. “Sure things” don’t exist. At least not when it comes to investing. There are simply too many variables that can influence whether or not a profit is turned.

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The most trusted financial advisors will tell you that the more boring an investment is, the better it will most likely be in the long term. That’s because the market likes predictability. A fluctuating commodity is a scary one. And serious investors don’t like making bets on risky investments — it doesn’t matter how great an opportunity it may sound like. Just ask Berkshire Hathaway’s Warren Buffet!

5. Don’t Loan Money to Friends and Family You Can’t Trust

Risks Involved: Loan Not Paid Back
Potential Savings: Various

As much as you would want to help them out, if your friends or family members come to you asking to borrow money, just say no. The last thing that anyone needs is to have to pester a loved one for the money they owe.

Don't Loan Money to Friends and Family You Can’t Trust ©LightField Studios/Shutterstock.com

While lending money to loved ones isn’t suggested, the same can’t be said for giving them the money they need (within reason) and telling them it’s a one-time gift. If you have the means to help out, do it but do yourself a favor and forget about getting the money back.

6. Don’t Overspend On Lotto Tickets

Risks Involved: Long Term Losses
Potential Savings: $1-$5* / Ticket

A one in twenty-five chance of winning a prize while playing the Powerball lottery sounds pretty darn good. However, most of the prizes are nothing more than another lottery ticket for the following draw. The odds of holding the winning ticket for the draw’s main prize are slightly less favorable at 1 in 292 million.

Don't Overspend On Lotto Tickets @weckbuffalo/Facebook

Approximately half of all adult Americans gamble away more than $85 of their hard-earned money on lottery tickets every month. That’s over $1,000 a year that could be spent on more important things or put into a savings account.

7. Don’t Cash Your Paycheck Right Away

Risks Involved: Spend Too Quickly
Potential Savings: $100+* / Month

Let’s be honest, the sooner a paycheck is cashed, the quicker it’s likely to be spent. By having an employer deposit your wages directly into your bank account, you can keep your hard-earned cash out of sight and, therefore, theoretically out of mind. If you can’t see it, you won’t spend it.

Don't Cash Your Paycheck Right Away ©Yulia Grigoryeva/Shutterstock.com

Thanks to contactless payments and the increased use of debit and credit cards, that’s not exactly true anymore. More and more people have set up workplace retirement plans that directly debit a pre-determined amount from your salary into an investment plan monthly. That way, you (ideally) get the money back eventually.

8. Don’t Buy Too Much Company Stock

Risks Involved: Stock Flops
Potential Savings: $1,000-$10,000+*

There might be a time when someone comes to you with a “sure thing.” A stock that can’t fail. No, a stock that won’t fail. Like a devil on the shoulder, this incredible investment opportunity will be a temptation that will be hard to resist. So don’t. Just don’t put too many eggs in one basket. Spread your wealth.

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Investing wisely in several different sectors has become popular because as tempting as it may be to go all-in on a company, it’s not worth the risk of losing it all. Millions of people bet big every day, and very few end up cashing in.

9. Don’t Invest Money You Can’t Afford To Lose

Risks Involved: Go Into Debt
Potential Savings: Thousands

Although they’re quite different, playing around on the stock market and going to a casino are also very much the same. They’re both forms of gambling, and the only money that should be used for either one should be money that the gambler has already come to terms with about losing.

Don't Invest Money You Can’t Afford To Lose ©Norman Chan/Shutterstock.com

The funds that are used to dabble in the stock market should theoretically come from excess cash you have to play with. That means it’s probably not a good idea to allocate money for the exchange until after all the bills have been paid and food has been purchased. Nothing in the market is guaranteed, so make sure the essentials are covered first.

10. Don’t Fall For ‘Special’ Finance Deals You Can’t Afford

Risks Involved: Hidden Interest Fees
Potential Savings: $1,000+*

Every year, millions of people fall victim to financing plans they thought were on their side. When it comes to financing a product, if a deal seems too good to be true, it probably is. Do not sign anything until a copy of the contract has been read over (not looked over) thoroughly.

Financing a Honda Civic for $79/month for two years sounds great unless you’ve been roped into a three-year contract (or longer). When the two well-priced years have passed, the third year will almost certainly have a slew of hidden interest fees and a much higher monthly rate.

11. Don’t Opt Out of Your 401(k)

Risks Involved: Having No Retirement Money
Potential Savings: Tens of Thousands

Everyone is thrown a curveball or two throughout their lives. They could come in the form of being laid off from work, a poor investment strategy, or an ever-daunting economic crisis. The important thing to do when they arrive is not to panic and definitely don’t opt out of your 401(k).

A 401(k) is the only source many Americans have for their retirement years. As tempting as it would be to have a large sum of money during tough times, in the long run, it will be better to adjust your budget and endure the lumps of the current hardships.

12. Don’t Be Unintentional With Your Money

Risks Involved: Savings Goals Won’t Be Achieved
Potential Savings: Unlimited

To make the most out of every paycheck, it would be wise to divvy it up into categories based on the things you’ll need soon and those you won’t. Setting up a few savings accounts will help you achieve your long-term and short-term saving goals.

One of the accounts might be allocated to saving for the family’s annual trip to Disney World. Perhaps another will be for the renovations you plan on having done on the house after the kids move out? If you keep to the payment plan you’ve created for yourself, there’s no reason all your goals couldn’t be attained.

13. Don’t Put All Your Money in Illiquid Investments

Risks Involved: Can’t Access Money When Needed
Potential Savings: Unknown

Every adult should be aware of knowing where their money is and how to gain access to it in the timeliest of manners. Although it’s a good idea to have long-term investments, having too much money locked-in long-term can come back to haunt you.

Be careful not to invest in too many real estate investment trusts or ‘priceless’ collectibles. If needed, neither one can be turned into cash quickly, and collectibles are usually only ‘priceless’ to the one collecting them and a select few others. Alternatively, assets like mutual funds and individual stocks can be cashed-out as long as the market is open.

14. Don’t Co-Sign a Loan You Can’t Afford

Risks Involved: Bankruptcy
Potential Savings: $10,000+*

Co-signing a loan for someone who isn’t the most responsible person in the world (nor all that financially stable) has the potential to end very poorly. However, not having the means to pay the said loan will have an exponentially more catastrophic result if the other party defaults on their payment.

A defaulted loan can irreparably damage personal credit scores. It’s one thing if it was a loan of your own, but falling into a credit abyss because of someone else would be devastating. Think if it’s worth the risk before agreeing to co-sign a Wells Fargo mortgage for your former BFF, who you see twice a year.