7 Money Moves That Sound Smart But Will Keep You Broke
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Have you ever seen a throwback pic of yourself wearing something you thought looked cool but was actually just an unfortunate misuse of the deep V? Just me? Okay.

Well, in today's episode, we're going to take this energy and apply it to money. I'm going to share seven money moves that people think are smart, but are actually a financial disaster looking for a place to happen. But rest assured, if you've already made some of these mistakes, you're not an idiot. There's no need to panic at the disco, okay? You're also going to find out the right way to build wealth instead. It's the least I can do.

So the first thing people do with their money that feels smart but is actually dumb, respectfully, is buying extended warranties. Listen, I get it. Extended warranties make you feel like a safe, prepared type A winner. But in reality, they're a cash grab that companies benefit from by convincing you that your financial stability depends on having vague repair coverage for your custom Golden Girls iPad case. No thank you, Best Buy. I'll take the risk. Hello? We've been trying to contact you regarding your car's extended warranties.

So what do you do instead?

We'll start by seeing what the manufacturer can do for you if something breaks. Even if the warranty is expired, it's always worth checking because some companies will go above and beyond to make customers happy. And the worst that can happen is they say no. And if they do say no, that's where an emergency fund comes in handy.

So rather than buying a bunch of extended warranties that you'll probably never use, you're better off self-insuring by paying yourself that warranty payment, aka saving that money in an emergency fund. That way, if your HVAC does break after the normal warranty, you have the money saved up to fix it. And if it doesn't break, it's your money to keep. So this is a win-win here. All right, the second money move people think is a slay but is actually crappay? Spending to save. Now, some of these mistakes I have some legitimate empathy for, but this one?

Come on, guys. It's literally in the name. All right. Whenever you have to spend more money or spend money in a very specific way under very specific circumstances just to save a buck, it's a no from me, dog. Is it a yes or no, Frank? It's got to be no, dog. And this spending to save stuff, it's been around forever. You can make an entire compilation of the greatest marketing gimmicks of all time, including but not limited to buy now, pay later.

Store credit cards, airline and reward points, BOGOs, and of course, who could forget, spend 50 bucks to get free shipping. The list goes on, and if you order now, you can also get royally screwed. Sorry, kids. NSFH, not safe for homeschoolers.

I warned him. I told him, put the warning up there, guys. So next time you find yourself at the Old Navy outlet because you have a coupon, ask yourself if spending the 30 bucks to get 15% off is actually helping you reach your financial goals. So what do you do instead here? Well, just budget for the things you need when you need them and buy them guilt-free. And if you've never planned and tracked your spending, trust me when I tell you that the EveryDollar budgeting app is the best way to save and spend stress-free. So I'm going to drop a link in the description if you want to check that out.

Moving on to number three, chasing a good credit score. The only thing people love more than having a good credit score is telling you they have a good credit score. But what these people don't know is that having a good credit score doesn't mean you're actually good at money management. Go with me here.

Building wealth is all about making and managing money successfully. But a credit score is 0% affected by how much money you have in the bank. So whether you're saving 50 grand a year or 50 cents a year, your credit score stays the same. If you get a million dollars in cash in the bank today, your credit score stays the same. And that's because all a credit score does is track your relationship to lenders. Or should I say, situationship. Right, don't confuse interest rate for interested. Mic drop, boom!

They just want you for your money. That's it. You are literally...

A credit score doesn't show that you're investing, making progress with your savings goals, or give any accurate information about your ability to build wealth. All it does is show that you're good at managing debt and paying other people back. So ultimately, you can ignore your credit score if you're done with debt. Like that random high school friend who messages you on Facebook once a quarter to ask if you're interested in trying CrossFit? Leave him on read. Keep it moving. Instead, what do you do? Break up with debt for good,

so you can stop stressing about a random badge of honor that only shows how good you are at paying lenders back. All right, money move number four that sounds smart but is actually dumb, credit card balance transfers. This is when you take the debt balance from one credit card and transfer it to another credit card, usually one with a lower interest rate. Now on the surface, this might seem like a good idea to consolidate or save money on interest,

But to be clear, that's the only thing balance transfers do is move your debt around like a shell game. And that's like getting a grease spot in your collar and then deciding to do a swan dive into a pan of pasta sauce. Here's what I mean. Most balance transfer cards offer a temporary 0% APR. But once that introductory period is over, they'll end up charging you a variable rate from 11% to 25%. And that's what we call a bait and switch in the biz. Plus, if you miss even one payment during that intro period,

The 0% interest rate is gone, just like your youthful optimism. Not to mention they'll slam you with a 3% to 5% fee on each transfer you make. Because even though you did a balance transfer to keep your debt from growing, the credit card company's got to make money somehow. Not today, Capital One. And I would have made millions if it hadn't been for you meddling kids. So what do you do instead here? Stop using credit cards. Stop trying to use debt to pay off other debt.

Start living below your means and instead use the debt snowball method to build momentum as you pay off debt. This is where you list your balance from smallest to largest, attack the smallest debt with a vengeance, make minimum payments on the rest, and you continue to roll the payments into the next one and you make some real progress fast.

I've seen this method work for thousands of people, me included, all with different debt and income levels, and I'm 100% confident it will work for you too. The fifth smart, dumb money move here is trendy investment strategies. Again, I get the allure here, right? It's human nature to want to be in on something before everyone else hops on the bandwagon, like the first person to rock an ascot before we, as a society, decided we should not be doing that, okay? You know what they say, anytime you wear an ascot, you get caught being a...

Unfashionable man. Still not safe for homeschoolers somehow, because the word is in there. You know what I mean? You still have to say it to say the word Ascot. Mom, I'm scared. Incredible jokes aside, when you're constantly chasing the latest investment trend to save money fast or get rich quick, you're just putting yourself at risk for a payday that will never happen. Now, I'm going to hold your hand when I say this.

Buying gold and Beanie Babies is not the secret to building wealth. Neither are NFTs or hoarding crisis-proof assets in your backyard or betting on single stocks. Now, are there a handful of rare exceptions where people were in the right place at the right time and actually got rich quick? Sure, I mean, someone wins the lottery, but that's not the norm and it's not gonna be you, which means it's very risky to put all of your eggs in one basket. So what do you do instead?

Keep it simple. Go with time-tested strategies like this one. Invest 15% of your income into tax-advantaged retirement accounts like a 401k or a Roth IRA. And then let your money slow cook in these accounts until you can withdraw with no penalty. And only do this when you're out of debt with a fully funded emergency fund with three to six months of expenses. And listen, investing is a long-term play. And if you trust the process and the data, you'll be looking at an average 10% rate of return over time.

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And when you go to this link, joindeleteeme.com slash george, you'll get 20% off their annual plans, which comes out to about nine bucks a month, and it's worth every single penny. So go check it out or click the link in the description below. Moving on to money move number six that sounds smart but is actually dumb, leasing a car. Listen.

Listen, getting a fresh new car with low monthly payments sounds too good to be true, right? Well, it is. Because in reality, you're just expensively renting a car. Plus, you're now at risk for hidden fees for extra mileage and wear and tear, which is a stressful thing to obsess over while you're just trying to enjoy the weekly Dippin' Dots outing. And don't forget, there's usually a mileage cap on lease agreements. So if your commute changes or you take a cross-country road trip, you could end up getting charged for every single mile you're

you go over. So what do you do instead of leasing? Buy a used car in cash that you can actually afford in full. And make sure the total value of all of your vehicles and wheelie toys don't add up to more than half of your income. That's how you know you're making progress with money. So stop spending all this money on a depreciating asset that you will never even own. Just buy it used in cash and thank me later. Dumb money move number seven, using your home's value like a piggy bank. If

If you're using your home equity to do cash out refinancing, a home equity loan, a HELOC, you are doing it wrong. And there's a huge tiny caveat to this. If you're refinancing to go from a 30-year mortgage down to a 15-year mortgage, that could be a smart move.

Refinancing to lock in a lower interest rate on your monthly payment? Sure, that could be wise. But refinancing to consolidate consumer debt or remodel your kitchen? This is a huge nope. I see this happen all the time. People use their home equity and they go, well, I'll refinance and I'll use that to pay off credit card bills or I'll combine my student loans and medical debt and car loans and credit card balances.

into an even bigger mortgage. All this does is prolong your debt payoff journey while racking up extra interest on a giant loan. And worse, with HELOCs and home equity loans, you're putting your home at risk. They can take away your house if you miss a payment. So what should you do instead? Make moves that help you pay off your mortgage early instead of going backwards by increasing the balance. Now here's the bottom line with all these money moves. When it comes to building wealth,

Choose simple, consistent, and slightly boring, over-trendy, and smart. We want Meemaw's beige Thanksgiving plate here, not fancy carrot foam and 3D printed peas. And like I always say, if you follow the trends, you will fall for the traps, which is exactly why I wrote this book, "Breaking Free From Broke." There's plenty more traps you need to know about where that came from, plus a proven path to building wealth. So if you want it, check out the link in the description. I'll also drop a link to the audio book, read by yours truly and truly yours.

And there are even more dumb money moves where this came from. So be sure to check out my video, Five Money Mistakes People Constantly Make. I'll drop a link to that in the description as well. Be sure to like, subscribe, and send this video to a friend. Thank you guys for watching. We'll see you next time.