You know that expression, right? This pretty famous saying is in the fable “The Milkmaid and Her Pail” where Patty, a farmer’s daughter, is daydreaming as she walks to town with a pail of milk balanced on her head. “The milk in this pail will provide me with cream, which I will make into butter, which I will sell in the market, and buy a dozen eggs, which will hatch into chickens, which will lay more eggs, and soon I shall have a large poultry yard. I’ll sell some of the fowls and buy myself a handsome new gown and go to the fair, and when the young fellows try to make love to me, I’ll toss my head and pass them by.” At that moment, Patty tossed her head and lost the pailful of milk. Her mother said, “Do not count your chickens before they are hatched.” The same expression fits perfectly here in the world of personal finances, where many of us spend our money either before we have it or above and beyond our means. Well, here are 10 ways that some people do count their chickens before they hatch, putting their financial security at risk.
1. Get yourself either an interest-only or a variable interest mortgage. Sure, everyone had them a few years back when the housing market started collapsing, but that was then – this is now! There is nothing like getting a mortgage you can definitely only afford for 5 years and hope that you make more money later on.
2. Buy yourself a car – and spread those affordable monthly payments out over an 84 month period. While there is no way you could afford the monthly payments on a new BMW with your $20,000 per year job if you got a 4 year loan, you could most surely afford it over 7 years or longer!
3. Take cash advances on your credit cards to buy random unnecessary crap with. Nothing says “I will be able to pay that back eventually” like borrowing money from your credit card at 11% interest (or more) plus applicable fees.
4. Go out to eat at expensive restaurants every night of the week because “you deserve it”. Someday, when you finally have a lot of money, you will be known as a regular… or you will just be in debt. It could go either way, really.
5. Throw away your perfectly good iPhone that you got 4 months ago. Sure, you will have to pay the full upgrade price on the brand new one ($600, I think?) but you might be getting a bonus in 6 months, and that would more than pay for it. Right?
6. Buy your fiancee an engagement ring that is way out of your comfortable price range. Nothing says LOVE like giving a ring to a woman you went into debt for and will eventually make your wife help pay for.
7. Live paycheck to paycheck, with hopes that eventually you will be paid so much that you can finally save a few bucks. I mean, someone has to recognize just how great you really are eventually, right?
8. Go on yearly “all expenses paid” vacations that you can’t afford. Head to exotic countries that you charge to your credit card, accrue interest on all year, and then take another trip the following year while still paying off the trips from all previous years.
9. Pay an investment advisor to manage your $5,000 retirement portfolio that you contribute $25 a month to. Service fees and percentages will eliminate any chance of making any gains, but since you plan on eventually having a lot of money, you need an advisor today.
10. Care too damn much about what other people think of you, and spend enough to change their minds. Self-confidence doesn’t come from inside, it comes from just how cool you can make yourself feel by spending all your money on things you cannot afford today. Monthly payments on a balance that never goes down is a small price to pay to boost your own ego.
Ever count your own chickens before they hatch? I know I certainly have over the years, whether it be for a car I couldn’t afford or a girl I dated who wanted to live way out of my price range. Please share if you have your own stories!