For most things in life, you should never say never. However, there are some things you should never do with your money.
1. Never use credit to buy things you can’t afford to pay cash for.
If you’re not willing to save for it, it makes no sense to go into debt to get it. This is why the ability to delay gratification to plan and budget for purchases is a common trait among those who excel at managing their money and accumulating long-term wealth.
2. Never lend money that you cannot afford to give away.
Even then, say never to lending without getting the borrower to sign a written agreement to repay the loan. This alone will reduce the likelihood of being hit up for a loan in the first place, while increasing the chances of the rare loan you do extend being repaid—especially if you have to sue to get your money back.
3. Never co-sign on a loan, a car note, or other financial obligation.
Even if you can afford to make the payments, if the person you are co-signing for can’t, why expose yourself like that? That goes double if that person is a family member, and triple if the person is a romantic interest. Love has nothing to do with it.
4. Never be pressured into spending out of guilt or to prove your love.
Those who make such demands—including children, parents, siblings, or romantic interests—care far less about you than they do about what you can do for them. Accept the fact that people, especially those you love, will attempt to use emotional manipulation to get you to spend in support of their agenda, even when it sabotages your ability to meet your financial goals.
5. Never invest in anything you don’t understand.
Always say never to risk-free, once-in-a-lifetime opportunities guaranteed to pay off big—and run. Run! There is no such thing, but people get scammed out of their life savings every day for believing otherwise. Don’t be one of them.
6. Never spend money you don’t have to boost your self-esteem.
Find other, less destructive ways to boost your sense of self worth. Shopping to make yourself feel better about yourself is a commercially encouraged, socially acceptable way to self-medicate against the pain of depression, loneliness, stress, or sheer boredom. However, it is also as addictive and destructive as any other habit, ranging from drugs and alcohol, to gambling. If you have a problem, deal with it; don’t use spending to numb yourself to it.
Follow this advice, and you may never have to say, “Never again”—at least when it comes to your finances.
Black Enterprise Executive Editor-At-Large Alfred Edmond Jr. is an award-winning business and financial journalist, media executive, entrepreneurship expert, personal growth/relationships coach, and co-founder of Grown Zone, a multimedia initiative focused on personal growth and healthy decision-making. Follow him on Twitter at @AlfredEdmondJr.