How to Run Out of Money

These tongue-in-cheek tips have been compiled from my 20 years of experience serving clients as a professional tax practitioner. I’m assuming that no huge inheritance is waiting in the wings. If it is, you may have to work harder to go broke.

1. Buy whatever you want anytime you want. After all, you deserve it. The more impulsive, the better. Be fearless!
2. Use credit cards for all your purchases so it seems like nothing is happening, and pay only the minimum balance each month. After all, you are earning those “points.” What could be better? (Average credit card interest rate: 16.15%.)
3. Never check your account balances. Why would you? Does it really matter what your balances are?  (Overdraft fees are about $34 per occurrence, on average.)
4. Forget about having a 6- to 12-month emergency fund. That’s what credit cards are for.
5. Topping out on your credit card limits? A home equity line of credit could be just the thing!
6. Put money aside toward your retirement only when you have some left over. (Which will be . . . essentially never.)
7. If you insist on having an emergency fund or money for retirement, keep that chunk of money under your mattress—or in a regular bank account, which is the same thing these days.
   Current average interest paid on bank savings accounts in U.S.: 0.04%
   Average interest paid on high-yield savings accounts: 0.4%
   Projected 2021 inflation rate: 2.25%
8. Avoid investing in solid securities like reputable mutual funds. It’s just too scary!
        Yes, the stock market goes up and down. Historically, however, and overall, what goes down must come up. Remember the early months of 2020? It was the end of the world. It’s a different story now.
        It’s hard to go wrong with a good index mutual fund, which you can “set and forget.” These funds always give good returns in the long run. Be sure to avoid them!
9. On the other hand, buy individual stocks when your cousin Larry or your coworker June gives you a hot tip. This is a great way to divest yourself of excess money.

Do you have more tips? Please add them in the comments.