How bad money behaviour can come back and bite you

Bankers may have avoided judgment of their bad money behaviour until the royal commission, but everyone else who misbehaves financially risks being haunted by their actions.

GREED, rip-offs and other bad behaviour by banks have been exposed by the financial services royal commission, prompting many Australians to shake their heads in disgust.

Whether all of those naughty bankers will pay dearly for their stuff-ups it not yet known, but for the average individual there’s a heavy price for behaving badly.

Often people don’t realise that their behaviour is costing them and their families, and that their mistakes will eventually bite them. Hard.

Here are five ways bad financial behaviour can come back to haunt you.

1 DISAPPEARING ACTS

People who like to run away when it’s time to pay will quickly find themselves struck off invitation lists.

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Whether it’s at a pub or restaurant, chipping in for group gifts or not offering to return financial favours to family members, it will be noticed.

People remember if you don’t pay your share, especially if it’s draining money from their own pockets.

2 PLAYING THE POVERTY CARD

Telling people that you’re broke may lead to short-term sympathy but could do long-term damage.

Friends and family might stop inviting people to events if they think they can’t afford stuff. The biggest harm is self-inflicted because it creates a mindset of negativity rather than seeking ways to improve things.

This behaviour is twice as bad when displayed to children. Telling kids flatly “we can’t afford that” without explaining reasons or ways the change will put a bad seed in their mind.

Crying poverty creates a dangerous mindset in children, other family and friends.

3 BRAGGING ABOUT WEALTH

Gloating about the size of your wealth or pay packet is not good.

The most awkward money question anyone can ask is “how much do you earn?” because that topic is still taboo. In this conversation, there is almost always a loser, because many people wrongly measure their self-worth based on their net worth or income.

Psychologists say boasting about money is a sign of insecurity.

And there’s always somebody richer, unless your name is Jeff Bezos and you founded Amazon.

4 WHACKING IT ON PLASTIC

Credit cards make spending so easy, but using them to fund a flashy lifestyle is asking for trouble.

Too many people get themselves in a debt spiral by having several credit cards and not paying them off before interest applies. Collectively Australians are paying interest on $32 billion of credit card debt — at an average interest rate near 20 per cent.

One $10,000 credit card debt, left unchecked, grows to $20,000 in less than four years as the interest owing compounds. Paying it off should be financial priority number one.

5 STEALING, NOT SWIPING

Supermarket self-service registers are now everywhere, and research has found that around 16 per cent of Aussies deliberately scan cheaper goods — such carrots as avocados — or steal items without swiping them.

The older the person, the less likely they are to steal. Apart from this being illegal and wrong, theft increases the chance of being hit by a karma bus, and thieves’ days are numbered as advanced antitheft camera systems are being trialled.

If you recognise any of the above behaviours in yourself, there’s a simple solution: Stop doing it.

@keanemoney