Okay, so we are all guilty of making bad financial decisions from time to time, but there are some errors that can catastrophically ruin your personal finances, and make it hard to get back on track again. Luckily, you can discover what they are below, hopefully, these will allow you to avoid them and keep your money as safe as possible.

6 Ways to Completely Ruin Your Personal Finances

Buy Now Pay Later

In today’s world, the idea of saving up for something we want has all but gone out of the window. Instead, we are offered ‘buy now pay later’ or credit solutions that seem mighty appealing at first glance.

After all, who wouldn’t choose to get the item they want straight away and then worry about paying it off later?

The problem is that such offers, including those that catalogs often proffer, aren’t always such a great option. The reason for this is the huge amount of interest you can end up paying on any purchases you do make.

What this means for most of us is that while we don’t have to find the money for the item that we want right now, we spend much more time and money paying it off. Something that can mean a relatively inexpensive everyday item can cost us hundreds in interest. Not the best use of your money now, is it?

The only time this sort of offer from a catalog can be of use is when you have a big ticket item to buy in an emergency, and there is no way of raising funds outright. This often happens when a washing machine breaks down, or you need a new freezer.

Then you can take the buy now pay later deal as long as its 0% interest, as you can save each month and settle the balance at the correct time. An action that means you won’t end up paying more than the original price.

N0t Paying Your Credit Card Bills

You can also quickly ruin your finances by not keeping up with any credit card payment that you owe. The reasons this can be so damaging is that a record of how reliable you are with this debt, called your credit score is kept on file.

This file is then available to other lenders when you go to borrow more money.  If your score is low because you have regained on your debts, you will find it very difficult to get a loan in the future. Something that can make things like buying a car or even a house super tough, essentially ruining your finances.

If you are having problems with paying off your cards, instead talk to your credit provider and try and agree a more reasonable payment plan. You can also get professional firms to look at fixing your score and reaping any damages that you have caused in the past.

Not Using Credit Cards

Ironically, while you can ruin your finances by using credit cards in the wrong way, you can also ruin then by not using them at all!

The reason for this is again to do with the log of your financial history called your credit score. Having a bad credit score can cause you problems as we found out above, but having no credit score can be equally as difficult.

This is because potential lenders have no information to base any assessment of your risk on. Something that means they could end up charging you a higher premium to borrow. That is why it’s vital that you responsibly use your credit card from time to time.

Be an Uneducated Investor

Something else that can so quickly ruin your personal finances is making uneducated investment choices. This can be a real problem because many people don’t understand the market trends and even the differences between the markets that exist. This makes their choices unlikely to pay off and puts any money that they do invest at a higher risk.

Combine this with the fact that financial markets tend to be volatile and change very quickly, and it can result in the loss of any capital you invest and some serious damage to your personal financial situation.

Something that means educating yourself on trends, the market, and even individual companies history vital if you are going to invest.

Uneducated investment decisions often end in disaster.

Take on Debt in Someone Else’s Name

A major mistake that people often make regarding financial ruin is taking on other people debts. This mistake is mainly an issue for married or cohabiting couples because things can get messy when you live together and split salaries.

However, it is crucial that you avoid whenever possible taking on additional debt for someone else. OK, so you might need a loan to consolidate your debt but make sure that you take out half the amount and the other person does the same, and that you pay them off equally.

Otherwise, you could end up being responsible for a debt that you didn’t get the pleasure of spending in the first place. One situation that you don’t want to be in as it can be both frustrating, and depressing all at the same time.

Take Out a Secured Loan

Lastly, it is important to remember that while there are a lot of benefits to a secured loan, such being granted one quicker and lower interest rates, taking one out can completely ruin your personal finances if you can’t afford to pay it back.

This is because secured loans are often secured against your most valuable asset, for most people this being their home. That means if they get into a situation where they cannot make the payments on this loan, and many people do through no fault of their own, they risk losing the roof over their head.

This is a situation that obviously no one wants to find themselves in, and it means you have to think long and hard before choosing this type of loan, as well as explore all the other possible alternatives before singing in the dotted line.

Otherwise, you could end up not only ruining your personal finances but also end up out on the street. Something that it can be complicated to recover from finally.