A little Monday Money advice! Especially if you plan to buy a home!


1. No-money-down plans

Want a new mattress? How about a payment plan with no money down? Never mind the fact that you’re financing a freaking mattress, now you also have zero “equity” in said mattress.

The no-money-down trap is simply another way to get you locked into making long-term payments on items you need to be buying outright. Instead of putting no money down, here’s a better idea: Save up some cash and put all the money down!

2. Payday loans

Life is moving along nicely when you get sideswiped by some unexpected financial emergency—the transmission goes out, your HVAC unit dies, your son breaks his leg on the basketball court.

Suddenly, you panic. Your emergency fund won’t cover the bills, so maybe some quick cash from a payday loan place would help?No!

These guys are the worst of the worst in the financial industry. Payday loans are a scam, and you’ll end up paying hundreds of percent in interest for that loan.  Take an extra job. Sell some stuff you don’t need. But whatever you do, stay way from the payday loan shops!

3. The car lease

The Smiths got a new BMW, and boy is it nice. That little beauty has a fancy GPS, satellite radio and seat warmers, and it smells so good . . . oh, the smell.

You love that BMW, and wouldn’t it be nice to trade in your old Honda for that? No matter that you’re still making payments on the Honda—that’s what leases are for, right? Wrong!  Leasing is the most expensive way to drive a car. Stay away from the fleece.

4. Timeshares

Someone offers you a free vacation. The only catch? You have to come to some “business meeting.” Easy enough, right? The problem is that in this meeting, you’ll get hounded to buy a timeshare.

Timeshares are generally marketed to people who can’t afford them. And if you ever want to sell one, good luck! You can’t give the things away. You’re better off putting your money in a cookie jar.

5. Adjustable rate mortgages (ARMs)

A decade ago, ARMs were all the rage. Then the housing market crashed, and many of the banks that made stupid loans either went under or had to get bailed out.

Either it’s a three-year or a five-year ARM, you can be certain that your interest rate will adjust, and you have no control over where it goes. You’re playing with fire when you get an ARM. Instead, play it safe with a 15-year fixed-rate mortgage.


Leave a Reply