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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.
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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.”
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2. Don’t say “no”
Purselle has realized that when you’re a well-known celebrity, people can easily Google it net worth, you suddenly have a lot more family and friends than you thought.
“Everyone in your orbit suddenly needs a loan or some kind of financial help,” he says, explaining that many celebrities have cited caring for friends and family as the main reason for their financial demise. “MC Hammer reported he had a staff of 200 people with a $500,000 monthly payroll for friends and family who didn’t really do anything for the money,” adds Purselle.
Perhaps on a much smaller scale, this can also happen to everyday people. You may find yourself in situations of paying bills for family members, for example. Although small amounts at first, they can quickly add up and put you in a bad financial situation.
“The lesson is just to say ‘no,'” says Purselle. “You can empathize and support loved ones in more ways than becoming a human ATM.”
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.
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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.