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Financial Sanity 101: Stupid Tax

Financial Sanity 101: Stupid Tax

When I finally started getting my financial house in order, I started getting very frustrated with myself for doing dumb things with money. I’m not just talking about the obvious stuff, like running up credit cards and buying stuff I couldn’t afford. I’m talking about dumb, dumb, dumb stuff that I did that cost me money, years later, as a result of me just being unconscious about the way I spent money.

One of my earliest examples of stupid tax from those days was the money I paid to Bally Total Fitness for what they call a “Lifetime Membership.” I had just moved to LA and needed a gym membership, so I walked into Bally Total Fitness and got talked into buying what I thought was just a regular gym membership. But what I didn’t realize was that my monthly fee was simply a finance charge on a larger “product”–I was buying this lifetime membership for upwards of $1000, and financing it over 10 years or so! So even if I quit the gym, I still had to pay the stupid payment on the “lifetime membership”! Surely I would have known that if I had paid attention to what I was signing, but I was all self-obsessed about my weight and needing to work out, and so I just signed it all away.

This dumb maneuver of mine cost me quite a bit of money. I finally solved it by putting the lifetime membership on sale on eBay, and then transferring it to somebody else’s name. This took away some of the sting, but at the end of the day, I still had quite a hefty stupid tax to pay.

The thing I like about Dave Ramsey’s concept of stupid tax is that it helps you realize that many of us do dumb stuff with money, and though it’s nice to avoid this wherever possible, it’s also not useful to beat yourself up over it endlessly. So, internet, what are your experiences with stupid tax? Fess up.

Comments (2)

  1. When I was in Toys R Us shopping for the boys, I found a Fisher Price Imaginext playset I wanted, and proceeded to the checkout. Upon giving me my total, the cashier asked if I wanted to buy a protection plan for the item at a one-time cost of $10. I realize that’s not much, but I just looked at him like he was crazy. I may have asked if he was kidding. A protection plan on such an item? Then I realized they were asking this question of every customer, regardless of what they were buying, and some were going for it. Nice way to add a bit to the bottom line.

  2. AKD
    Dec 16, 2008

    I financed a used car (Subaru station wagon) for a 5-year term when I made no money. The head gasket blew on the way back from Tahoe (which is a whole other “this week in stupid” entry about not paying attention to the temperature gauge). We were stranded by the freeway in Davis with a car that should have gone straight to the junkyard. But I still had to pay off the loan, and until I paid it off I couldn’t get the clean title to be able to junk it. So I had to pay to get the stupid car towed from Davis back to Oakland, and then it sat in front of my house for months while I finished paying off the loan. I can’t even remember how much the towing was, but it’s probably still there as part of my credit card balance.

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