Ever wonder what the most common emergencies are which force people to borrow money?
If you think you are immune, you might be surprised.
The following is a list of some of the most common, most unfortunate, the most down right stupid emergencies that force people to borrow, add to their debt and generally disrupt their finances.
If you have found yourself in any of these situations, don’t fret, we’re only human, just try to avoid these bone-head moves again–they are down right expensive–and in some cases dangerous to yourself and others.
10. Driving Drunk — The potential for tragedy is immense. You can hurt yourself and others. Your car can end up in a ditch, you can wreck it, misplace it or vomit in it. Before you drive under the influence again, please, dear me, remember how damned expensive repairs are for your car, how much you will need to borrow for legal fees and of course the cost of financing whatever punitive damages the courts may burden you with. So if the health and ethical reasons for finding another way home aren’t enough–remember how ridiculously expensive it all ends up being.
9. Get Me Out of Jail — The next insanely dumb emergency is most commonly a cause of borrowing is, get out of jail, bail money. Getting out of jail isn’t dumb, it sucks. I get it. Whatever got you there in the first place, on the other hand, likely was dumber than can be imagined. The true tragedy is, it’s usually a family member forced to get an emergency loan or collateralize their house on their behalf. Do yourself and your family a favor and straighten up before they are forced to borrow money they don’t have and you end up on the mugshot hall of shame.
8. Vacations — All my friends are going to Mexico for the vacation of a life time, but well, I haven’t been getting all the shifts at work and all that. No problem, I can borrow, because I don’t want to miss out. Great idea? Not a chance… Smart is saving all year so you could afford it, not paying emergency lending rates so you can get flipped upside down for tequila shots with your mates. Then again… #yolo
7. Business Opportunity — My nephew has an internet business opportunity that sounds amazing. In fact it sounds too good to be true, and I really don’t understand how the intertubes work, but he sure seems confident and assures me a 433% ROI within 6 months. Ever notice how shady schemes all start to sound the same after you’ve heard them over and over again? If you are stuck sitting on your investment for a longer period than you expected, borrowing to do so with emergency money will be extremely costly — sometimes it’s OK to pass.
6. Car Down Payment — The car salesman knew he had you when your eyes lit up during the test drive. You revved the engine, felt the power and just had to have it–regardless of the fact the new model is at least 20k outside of what you intended to spend for your new ride. If only you can come up with a quick 4k for the down, the dealer is ready to finance the rest at terms. Stretching to add additional debt to your life, using emergency money–not wise my friend.
5. Attorney Fees — Excuse me? You are going to charge me how much per hour? If I knew that I would have been nicer to my wife and avoided getting divorced altogether. The breakup of a family is a sad event–made double so when you have to borrow to dissolve it in an equitable fashion.
4. New Model iPhone — The latest Apple gadget is due to arrive next week-and you just gotta have it. The cult of apple is strong, so much so you are willing to do anything to get it. Problem is your credit rating is in the toilet, and an emergency loan is all that is available to you–I’ll worry about paying it later, first I need to experience for myself the new features.
3. It’s Not For Me, It’s For Someone Else — Here is a borrowing pop quiz, see if you know the answer. In which case is co-signing for a loan a good idea: Co-signing a loan for a friend, for a family member, for your girlfriend, for an astronaut, for your children, for your neighbor? Answer: Trick question, it’s always a mistake. Borrowing for someone else will almost always end in disaster, don’t let emotions drive your borrowing decision, you’ll only get burned.
2. Gambling — Casino’s will kindly extend credit to you to gamble, why stop when everything is coming up blackjack for you. Maybe you have a ‘sure thing’ sure to win you the trifecta at the track, your picks never let you down right? Who want’s the convenience of risking your own money anyway? Let’s face it. Adding high fees to the inherent risk of gambling, is just plain dumb. Sooner or later you are going to come up bust. Why be a stereotype from a hard-boiled crime novel. Can’t pay? Depending on who you borrowed from, you may just learn what, ‘OR ELSE,’ really means in some unsavory circles.
1. College Education (Seriously…) — According to the college board, average costs for university is hovering at $31,231 per year ($9,139 for state residents at a public college). The emergency truly sets in when you graduate and discover your degree in hippie studies doesn’t quite pull paychecks to justify the borrowing. Not to worry, decades of monthly payments will give ample time to consider the costs.
A number of reader contributions deserve honorary mention, though they didn’t make the above top 10 dumb reasons list of emergencies causing people to get a loan.
Among the most commonly mentioned, though not included above were: wedding loans, borrowing for a timeshare, plastic surgery loans, general cost of living and designer anything.
We didn’t include a loan for wedding expenses above, as it just seems so cynical to just outright assume your marriage will be a disaster, and borrowing to pay for costs of divorce, alimony and such was too depressing to even consider–as well as covered in attorney fees.
Timeshares ought be universally understood as the financial black holes they are, but they still sell like hotcakes, so we decided these folks cannot be saved, therefore it was ignored. Plus the only emergency is the illusion created by the high pressure sales methods they use.
Borrowing money to pay for plastic surgery, cost of living expenses, and loans for designer products, are worthy of their own article and will be discussed in the next list of dumb things people commonly borrow money for.