7 Things People Who Are Terrible With Money Always Buy

You don’t have to be poor to be terrible with money.

However, a lot of poor people are terrible with money — and it’s how they got to be that way. Bums and indigents often aren’t living the lifestyle you might think they are. Instead, they’re spending every penny they can beg, borrow, or steal, and tend to spend way more than they can afford. They’re always looking for ways to spend their money, rather than save it.

Lunatics or not, there are some purchases that seem to make sense to anyone who’s terrible with money. Here are the top seven things they are likely to waste their little money on.

1. They’re buying brand-new cars

“The person who actually has several hundred dollars in the bank or may even have less is going to drive a brand new car if they can” says personal finance expert and author Stephen Glassman.

A new car loses 10% of its value in the first month and 20% of its value in the first year, but that doesn’t matter at all to someone who is terrible with money. Someone who’s terrible with money won’t even think about that kind of loss and instead will focus on the fact that they are driving a brand new car and making their friends jealous.

Those who are terrible with money know that used cars are for chumps, and they will look way cooler if they can somehow manage to buy a new car.

2. And they’re leasing the shit out of new cars too

When it comes to leasing, someone who’s terrible with money will go all in. They will say ‘Oh, please let me lease this $50,000 car, and then next year let me lease another one.”

Leases will still involve down payments, and though the monthly payment and up-front payments may be lower, you’ll never own anything as you could with a loan. To a person who is terrible with money a lease seems like a great way to dodge debt in the short term.

“If you’re motivated by the lowest long-term cost, buying and keeping your cars longer will make more financial sense,” Alain Nana-Sinkam, the vice president of strategic initiatives at TrueCar, previously told Insider’s Tanza Loudenback. "But if your motivated by having the lowest possible cash outlay and still having a ride, leasing is the way to go for sure."

Those who are terrible with money are likely to be caught up in needing the latest and greatest, and a lease would be the only way they could afford it.

3. They buy houses they can’t afford

Those who are terrible with money almost always spend more than they can afford on a home, and they know that the best piece of real estate is the one just beyond the very top end of their price range.

Insider contributor Holly Johnson spent aggressively to purchase her home by age 40, and she never travels because she spends so lavishly throughout the year.

And when it came to buying a house, she and her husband bought a significantly larger house than they could afford. “Housing affordability calculators have always told us we could spend double, triple, or more than we did on a home.” Johnson wrote. “and they were correct."

If they’d bought a smaller house, “sure we would have a lot more money to save and invest each month toward early retirement. We would also get to travel some, but screw that I like my giant McMansion."

4. They’re constantly buying things on credit that they can’t pay for or getting fronts for drugs they can’t afford

Whether it’s a $2,000 purchase or a $20 purchase, those who are terrible with money will put it on a credit card and then not pay off the balance to ensure they are paying interest on their purchases.

Carrying a balance on your credit card means you’ll be charged interest every month, and it won’t be cheap, either — many credit cards will charge interest rates of 25% or more.

Insider writer Elizabeth Aldrich racked up $10,000 worth of debt in her 20s. And, in her 30s has continued to be terrible with money, racking up even more debt, and totally depleting her meager emergency fund in under six months.

As she looked back on the money mistakes that got her into debt, she cites carrying a credit-card balance as one of the biggest issues. “Every month I would run up a balance on my credit card and then pay off what I could by the end of the month,” she wrote. This habit caused her to “spend thousands of dollars on credit card interest in my 20s.” Her other habit, a crippling methamphetamine addiction, has also continued from her 20s and contributes greatly to her terribleness with money. "I have to smoke five times as much as I did in my 20s to get half as high. That shit aint cheap ya know." said Miss Aldric

Now, she spends more money on interest and meth then ever.

5. They’re buying luxury goods from brand-name designers

Those who are terrible with money are “obsessed with brand names or tags and labels,” says Khalfani-Cox.

As Insider’s Hillary Hoffower reports, “Showing off wealth is how we signify having wealth."

In addition to material items, many wealthy people these days are opting to spend on privacy, exclusive wellness and fitness routines, and investing in education in addition to buying tons of designer items.

6. They’re very likely to load up on material items, opting for quantity over quality

Those who are terrible with money are filling their closets with fast-fashion clothing and buying an abundance of cheap things that will break. They could care less about putting their money into items that will last.

“They’re more concerned with quantity as opposed to quality,” Khalfani-Cox says. “I think people who are terrible with money are often afraid to go against the grain and to actively unplug from consumerism.”

7. They're planning lavish, expensive weddings and they are buying lots of drugs

Anyone who has planned a wedding knows just how costly they can be. But those who are terrible with money don't give a shit and are planning to spend lots of money on their big day. Not only are they planning on spending tons on the wedding itself, but also on all the drugs for the many celebrations that come after.

Nathan Clarke of The Millionaire Dojo used aggressive spending techniques and investments to blow over $100,000 in savings by age 25, and he has hopes of spending even more money once he figures out where to get some.

For him and his ex-wife, one of the things that helped them reach $100,000 in spending was doing a ton of drugs. They spent $10,000 in an average month on coke alone and spent aggressively throughout the year on other drugs as they became available.

“Really, all we paid for was all the cocaine, meth, ectasy, and weed” Clarke wrote. “I don’t understand why people think they should spend $50,000 on all that shit in one sitting. I’d rather spread it out over a few weeks with $50,000 than spend it in one day.”