3 financial mistakes celebrities make and what they should learn from them

Select’s editorial team works independently to review financial products and write articles that we think our readers will find useful. We earn a commission from affiliate partners on many offers, but not all Select offers are from affiliate partners.

While we may sometimes envy the lifestyles of the rich and famous, their lavish wealth doesn’t always translate into better money managers. In fact, the financial mistakes that celebrities make are not just isolated to them; the average person may also be making the same bad money moves.

Bravo celebrity Buffie Purselle, who has had a successful career as a tax accountant and business manager for professional athletes, entertainers, reality stars and entrepreneurs, spoke with Select about the overlap between the financial mistakes she sees being made celebrities and common day-to-day financial flaws. the person is capable.

“I witnessed a single commune over and over again,” Purselle says. “That commonality is a bad relationship with money. If you have a bad relationship with money before you start making a lot of money, those same bad habits will continue.”

Next, Select takes a closer look at the top three financial mistakes Purselle sees celebrities make and what the everyday person can learn from them.

Subscribe to the Select newsletter!

Our top picks in your inbox. Shopping recommendations that help improve your life, delivered weekly. Sign up here.

1. ‘Balling’ when they receive large sums of money

You’ve probably come across the slang “ball off” before as another way of saying spend a lot of cash when you get it. Purselle explains that she sees celebrities indulging in things for instant gratification instead of choosing a smarter way to use that money, like making their money work for them in the marketplace. For high earners, this move can lead to poor expense planning, such as a large tax bill they may have to pay.

“This also happens to regular people when they get annual bonuses and change their tax withholding to maximize the amount of cash they get,” adds Purselle. “This creates a financial nightmare come tax season.”

Instead, whenever your income changes, write a plan on how to maximize that extra cash before you commit to anything. For example, a pay rise or bonus can help pay off high-interest debt or boost your savings.

Credit card debt, which often has the highest interest rate, can be paid off with a Balance transfer credit card that offers 0% introductory interest periods so you have more time to pay off your credit card balances and avoid accruing any extra interest.

The US Bank Visa® Platinum Card includes 20 billing cycles of 0% interest on balance transfers and purchases (then 16.74% to 26.74% variable APR; balances must be transferred within 60 days of account opening), plus no annual fee.

When you want to grow your savings, open a high-yield savings account that earns you more interest than a traditional savings account. The Marcus by Goldman Sachs High Yield Online Savings offers no fees and easy mobile access.

2. Don’t say “no”

3. Bring your assets

Celebrities are often the ones many people look to for the latest fashion trends and this puts a lot of financial pressure on them.

Purselle says she’s noticed celebrities often spend money on high-end brands they only wear once or twice. When the calls stop coming in for concerts, it’s only then that they realize their most important assets are their clothes, shoes and jewelry.

“Erika Girardi [now Erika Jayne] of ‘The Real Housewives of Beverly Hills’ recently found herself in this situation and had to sell her clothes for a fraction of what she bought them for in order to survive,” Purselle says.

Buying clothes or accessories that exceed the budget is also something that everyday people do. Purselle notes that a designer bag or pair of shoes can easily equal a paycheck or two, and that’s often bought just to make others think they have more money than they really do.

“The lesson is to stop trying to keep up with the rich Joneses on Instagram,” says Purselle. “They don’t have money either.”

A good way to avoid temptation in the first place is to get off social media, where users are bombarded with marketing and images of people flaunting their latest purchases. Spending more on consumer products won’t make you happier in the long run. Instead, focus on social connections, experiences, and giving back when you can.

Catch up with Select’s in-depth coverage of Personal finance, technology and tools, welfare and more, and follow us Facebook, Instagram i Twitter to keep up to date

Editorial note: The opinions, analyses, reviews or recommendations expressed in this article are those of Select only and have not been reviewed, approved or endorsed by any third party.

Leave a Comment

Your email address will not be published.