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SCMP Reporter

THESE are the common financial traps that snare people, according to Eric Tyson, author of Personal Finance for Dummies .

Not planning.

 No one plans to fail. Many fail to plan. There are no deadlines in getting a financial act together.

Overspending.

 Americans save less than five per cent of after-tax income. The Japanese save 15 per cent.

Buying things that decline in value on credit.

 Never borrow money to buy something that depreciates in value, such as a car or clothing.

Not saving early enough for retirement.

Studies show many baby boomers have not saved enough for their retirements.

Falling for financial pitches.

 If it's a great deal and you can't wait to think about it, it often is a disaster.

Not doing homework.

 Read reviews of products by objective third parties.

Making financial decisions based on emotion, such as anger at being sacked.

Trusting people who claim to be experts.

 Just because someone has written an article doesn't mean they know any more than you do.

Too much exposure to catastrophic risk.

 Many people lack savings for emergencies.

Focusing too much on money.

 Health and relationships with family and friends are more important.



Advice to avoid financial traps