Ben Stein: 5 Ways You’ll Destroy Your Financial Health
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Peter Burns
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Molly Sullivan
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From maxing out your credit cards to financing a house you can’t afford, there are many things you can do to decimate your savings and derail your financial future. Personal finance expert and author Ben Stein kept track of the best ways to do just that.
In a fun twist of the financial improvement genre, Stein’s book, “How To Ruin Your Financial Life,” details the different ways you can bankrupt yourself through poor choices. Here are some bad decisions that will lead to financial instability.
Don’t Educate Yourself
It’s no secret that personal finance isn’t a priority in schools. In 2024, only 26 states in the U.S. required a personal finance course for all high schoolers, up from just eight states in 2020. If you’re hoping to remain in financial turmoil for your entire life, Stein suggests not making any attempt to educate yourself and improve your financial practices.
On the other hand, taking the initiative to learn about personal finance will lead to financial independence, less stress and better decisions. Following finance blogs, listening to podcasts, taking online courses and reading books can all help you better understand how money works and how it can work for you.
Keep Up With the Joneses
One of the easiest ways to negatively affect your financial health is by comparing yourself to others. Purchasing things to impress others often results in living beyond your means. Stein explains that spending more than you earn is an unsustainable practice that will drive you to debt.
You will never have to look far to find someone with a more expensive car, a bigger house or the newest gadget. Shifting your mindset toward achieving financial goals that improve your life instead of focusing on outspending your friends, colleagues and neighbors will make you happier in the long run.
Use Credit Cards as Much as Possible
Getting into debt is another way to put yourself in a bad financial position, and staying in debt is a surefire way to keep yourself down. Stein points out that one terrible financial decision is to collect credit cards and swipe them often. Using credit cards and paying them off completely each month can be an excellent way to boost your credit score. However, using them to purchase things you can’t afford and pay the balance sometime in the future is a terrible habit that will lead to poor financial health.
Further, paying the minimum amount each month guarantees you’ll drag out the repayment process as long as possible while wasting the most money. If you do rack up credit card debt, it’s important to pay down as much as you can. Paying more than the monthly minimum means you’ll save money in the long run and get out of debt faster.
Try To Outsmart the Market
If you scroll through social media platforms long enough, you’re bound to find stories of those who invested in stocks, cryptocurrencies or other assets and doubled, tripled or even 10xed their investment. While getting rich quickly can be tempting, Stein warns not to try and outsmart the market.
Instead of day trading and trying to time the market, make long-term investments. These benefit from compound interest. For example, if you invest $10,000 and earn 7% each year, that interest will add to the initial investment and begin to compound. In the first year, you’ll make $700. In the second year, you’ll earn 7% on $10,700, which earns you $749. Over time, compound interest adds up. You’re likely to make a lot more by this type of investing than by taking risks to outperform the market.
Don’t Worry About Retirement
No matter where you are in life, Stein reminds you that retirement is a reality. If you’re looking for a good way to destroy your financial future, ignoring retirement planning is a great way to do so.
The American Association of Retired Persons estimates that over 50% of Americans 50 or older worry they won’t have enough money to last in retirement, with 20% not having any retirement savings. To make sure you don’t fall into one of these categories, it’s important to start saving for retirement early. Opening an individual retirement account or contributing to a 401(k) are great ways to start setting funds aside for your future.
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