4 People Who Are Poor Financial Role Models

Saving for the future, and spending wisely now, are both important goals. It can be difficult to keep on track with spending or saving if you pay attention to poor financial role models. Just like we avoid people who irritate us or people who stop us from succeeding at work, we need to stop looking up to, or copying, poor financial role models. Sometimes we admire someone because they are famous, because they are family, or because they are successful, but none of these qualities guarantee someone knows how to handle their money.

The best financial role models include people who save for the future, spend their money carefully, and respect money as well. There’s a lot to learn from good financial role models, but sometimes poor financial models can teach you just as much. Here are four types of people who you probably don’t want to financially emulate.

1. Celebrities

Mike Tyson

Mike Tyson | Ethan Miller/Getty Images

We all love celebrities. Whether they are making us laugh in movies, amazing us with their athleticism, or convincing us to purchase a new product that we probably don’t need. One of the benefits of being a big-time celebrity is that many famous people have a lot of money. Unfortunately, many celebrities also lose their money way too fast. Celebrities who have gone bankrupt include 50 Cent, Larry King, Mike Tyson, and Gary Busey.

Instead of spending money like these celebrities, try to save your money and don’t waste it on useless purchases. Even if you have a lot of money now, you won’t necessarily be in the same place in a few years. The good times often come to an end. If you prepare now, it can help you prepare for downturns.

2. People who overspend

women shopping

Spending too much money can become a way of life | Joshua Lott/Getty Images

Determining whether someone else overspends can be difficult. We don’t know what other people’s budgets look like, how much they make, or how much they spend (unless they tell us). However, if you see someone who constantly has the newest car, the best clothes, and the newest gadget, there’s a good chance the person is overspending. While it’s true that they might be able to afford it, this type of lifestyle usually catches up to the person who is living it. There are also more obvious signs, and these include someone who regularly maxes out their credit cards and has bills piled high when you come over. Currently, the average credit debt per household with credit card debt is $9,800, so clearly some people are using their credit cards regularly.

If you’re with a friend or co-worker who spends, spends, and spends, and they pressure you to do the same, then it’s time to take a break from the person. Or at least, make sure you don’t start behaving like them and leave your credit cards at home.

3. Family members

family

Family | Source: iStock

This one is tricky because some family members are great financial role models. If your parents taught you about money, and they taught you important lessons like wise spending and saving, then they might be the perfect role models. The hard thing about taking lessons from family members is that you already have a bias (whether good or bad), so it can be difficult to accurately asses their financial decisions. The most important thing is to be sure that you are not replicating their decisions simply because you love or admire them. Even if your parents or other family members made good financial choices for them, they may not be the right choices for you.

4. People who are too frugal

saving money

Saving is good; being cheap is not | Source: iStock

As bad as it is to learn from someone who spends all their money, it can also be a poor decision to copy someone who is too frugal. While saving is a good idea, some people take it way too far. If you know someone who saves so much that they intentionally live without basic utilities, or they spend so little on food that they are losing weight or their family members are complaining, then you probably are seeing someone who is just too frugal.

Other signs can include someone who spends several hours each week trying to be frugal, people who hoard items, people who compete about their frugality, and people who prefer to save money then spend it. While it’s a great thing to save money, if your basic needs are going unmet, then you are going too far; don’t take advice or copy a role model who goes too far.

Obviously, some people take spending, or saving, over the top. While it’s important to save, it’s also important to have the things you need, and hopefully, a few things you want as well. The key is to set savings goals, keep a budget, and be smart with money.

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