This is a summary of an article from DailyFinance.com.
- Your New Job: Many people quickly get into a trap of spending more money when they get a new job with higher income. Instead of expanding your life style, try to keep your current spending and save the extra income. If you want a new car or a house, save up enough money to put at least 20% of down payment.
- Financial Windfall: So many people waste or buy expensive stuff, often getting into debt, when they suddenly get a large sum of money, whether it's divorce settlement, lottery winning, or inheritance. Instead of spending without a plan, save 1/3 for taxes, 1/3 for savings, and the rest 1/3 for fun.
- Leasing a car: Leasing a car sounds attractive because it looks like you can get more car for your money. But it comes with many fine prints and costs such as limited mileages and and disposition fees, that many people don't pay attention to at the time of lease contract. That may trap people into continuous leasing cycle. So, fully understand conditions and fees before signing up for a lease.
- A New Cellphone: Getting a "free phone" by signing a contract can be attempting. But it's a loan that may end up costing consumers more, and it's almost impossible to get out of the contract without paying hefty penalties. Consider purchasing a refurbished or cheaper phone outright and look into plans with no contracts.
- Buying a House: People want to update/renovate features and buy new stuff such as appliance and furniture when they get a house. Stay within the budget to avoid debt trap.