Saving money is meant to, you know, result in more money at the end. To this end, it’s important for would-be savers to avoid so-called savings techniques and strategies which are wholly irresponsible if not downright illegal. Every year, thousands of people attempt to get one over on the system in some way with the sole purpose of saving some money. By “some money” we’re talking a few hundred to a few thousand dollars.
Now, this range is no small chunk of change, but this sum is unlikely to be enough to warrant the risks generated. If caught red-handed, the resulting hurricane of expenses and possibly worse will have you wishing you had just coughed up the money you chose to “save” instead. As you’re about to find out, not only will your savings quickly disappear, you’ll probably wind up still owing a bit of money in your attempts to recklessly squirrel something away:
For some folks, avoiding insurance is a way of life. Many deem it a time-tested ripoff, while others simply don’t believe in the concept at all. These cynical and cavalier perspectives are likely to save some money in the short term, but are equally likely to lead to financial woes down the road.
For example, deciding to drive without auto insurance is more than just illegal. If caught, drivers will be forced to take out a high-risk SR-22 insurance policy, which will certainly be far pricier than what they would have originally paid. It’s a silly lesson too many folks have to learn the hard way.
Of course, the same applies to health insurance. Thanks to recent legislation you may have heard about, going without health insurance is now against the law in the United States. The result for non-compliance is a fine. Not to mention, the cost of extended medical care without coverage will send the average person into bankruptcy.
Utilizing the wonderful and seemingly physics-defying properties of duct tape and WD40 to prolong the life of parts of a home or automobile will only go so far. Unfortunately, many people opt to avoid paying for professional repairs, with much larger financial consequences inevitably down the road.
Unattended leaks in the roof will ultimately compromise the structural integrity of a home. Meanwhile, unchanged brake pads can lead to prematurely worn out components of the wheel array, not to mention massive safety risks for yourself, your loved ones, and anyone near the car when it’s in motion. Combine this with no insurance and see where it gets you money wise.
Cheating the taxman
Ahh yes, the one way in which everyone dreams about saving money: reducing their tax burden. While legitimate reasons to do so are obviously invited, many people are easily tempted to do things which reduce tax but maximize financial risk.
The abuse of tax write offs is one such way people hope to save money but wind up hurting for some by the end. The basic rule of thumb is that if it sounds silly to list as a business expense, it’s probably best to leave it off the list.
Then there is flat out attempts to conceal income from the taxman. This is like hiding loot from the local mob boss – it’s only a matter of time before the truth is revealed, and when it does, you won’t be on the smiling side of the situation. Punishment for tax evasion is, needless to say, no nonsense and meant to prove a point. In short, you don’t save much money trying to cheat the taxman.
The goal of saving money is to amass a nest egg of some kind when it’s all said and done. While short-term tactics for helping save money are always welcome, the risky, reckless, and oftentimes illicit ways to do so ought to be avoided altogether. What seem to be the rewards are absolutely not worth the consequences.