Stupid things people thought about Finance

My cousin whom I talked about in another thread wanted to open an RRSP account because she heard that my dad used that money to rebuild the interior of our house.

She came to my dad grocery and said (all proundly) : hey! Guess what?! I'm opening an RRSP account soon! My dad asked her if she knows what an RRSP account is, then he explained to her about it... Haha, her reaction was priceless, she responed with : WHAT?! WE HAVE TO PUT MONEY IN THERE??! She thought it was tax refund money and that the governement gives back thousand and thousand of dollars for free... She changes her mind after that... haha! What an idiot. She thought the money was free.

So... Share your experience!

[Broken Arrow]

Well, I used to think that the bank interest rates were applied monthly. Imagine my disappointment when I realized that it was annual.

[Snoopy2645]

Talking about tax refunds reminds me of my now SIL & BIL when I was first dating my husband now he told them I was getting around 5k back on taxes because I got the childcare tax credit & EIC & head of household I got everything well they tried to do it too then they thought why not Well only one problem they didnt pay daycare or qualify for EIC because they both worked just enough to not get it & were married. I just laughed at them I thought why in the heck would you think you could cheat the tax man???!!! They really thought they could just go in & say they paid daycare they didnt know you had to have receipts & a tax id or ss# for the daycare!!!

[boefixepa]

I had a dear roommate, but really, she was dense when it came to finances...

She had recieved her federal return, but not her state and just couldn't figure out why.

I asked if she mailed them on the same day.

Yes, she replied, I sent them together.

"Together!" I said shocked. "As in the same envelope."

"Yes!" she said. "So why is it taking so long!"

I then I had to explain to her that you send your state and federal to TWO different places.

To this day that STILL gets me! She'd been filing taxes for YEARS and didn't know this!

[meaghanchan]

I have a good one...

One day I heard my roommate in the other room, cursing loudly at her computer. I asked her what was wrong. She said,

"you know when the balance in your account is in parentheses?"
"yeah..."
"I just realized that means it's negative!"

She had watched her balance go down, down, down, and then up, up, up (but in parentheses) and didn't know why it was going up, but was just happy that it was.

D'oh.

[tgavin71]

Originally Posted by boefixepa

send your state and federal to TWO different places.

To this day that STILL gets me! She'd been filing taxes for YEARS and didn't know this!

Well that is my new thing learnt everyday. I never knew you guys had to pay state tax and federal tax. Whats the difference?

[PrincessPerky]

I have a friend who thinks 40$ in the pocket is rich...nevermind her 600$ phone bill, that she can't pay.

One who thinks the phone company should send a big pink envelope before they shut you off for not paying......(an will swear and curse the 'terrible company' for daring to shut her off)

One who thinks bouncing a check is a good way to 'float yourself a loan' (I suppose it is cheaper than a payday place?)

Many who think having a high CC balance is no big deal as long as you pay your bills (see above note on the bounced check...)

And so many more, nothing to make you laugh though.

[tabbycat31]

I have a friend in college who always buys books from her college bookstore. YOu can get them for so much cheaper online

[boefixepa]

State have certain responsibilities, federal as certain responsibilities, both need money.

The federal government get is by federal taxes...this is a nationwide thing.

States can do it a number of ways, and not all states have an 'income' tax. Those states that don't have a higher sales tax or higher property taxes. Either way, they get their money.

Oh and it doesn't stop there, counties and cities even, have their own taxes. Generally these are sales and property taxes though and not 'income' taxes which are the ones that are done yearly.

It's really sad, but because of the way it's set up american's are generally working close to half a year to pay all the different forms of taxes. They just do it in different forms so we don't notice it as much...makes us feel better I guess.

[Ima saver]

When I was very young, children did not have to have a social security number. I read about a man that claimed his dogs on his income tax form. He gave them all "people " names. To this date, i have always given my dogs a "people" name, ex. Holly, Lucy, Dixie, Penny, Nicki, etc. But I have never claimed one!

[thekid]

Originally Posted by Ima saver

When I was very young, children did not have to have a social security number. I read about a man that claimed his dogs on his income tax form. He gave them all "people " names. To this date, i have always given my dogs a "people" name, ex. Holly, Lucy, Dixie, Penny, Nicki, etc. But I have never claimed one!

Very interesting. I've got to add Sir Winston S. Churchill (my dog) on my income taxes as a dependant.

[Ima saver]

What a cute name. Let me know if you get away with it, I still have Lucy, age 15 and Holly age 6!!

[jodi]

Hmmm...I don't think I can get away with adding "Chewy" to my tax return! (short for Chewbacca, for all you Star Wars fans). But I could probably sneak "Buford" past

[creditcardfree]

This just backs up my feelings that we as families, churches and possibly schools need to teach the basics of personal finance. Some people don't know how to maintain a checkbook, let alone write a check. These things seem simple and basic, but some people just have never been taught.

I really think the value of compound interest should be taught in school at the very least. At least it would get the students brain working on wanting to save and how much more something would cost them on credit.

[tabbycat31]

I think the problem is that kids are exposed to finance in the wrong way. They're not taught about budgeting, yet they see Mom or Dad "magically" swipe a card into an ATM and get cash.

I've heard of stories where Parent tells Junior that they don't have money and Junior's response is "well go to that machine and get some"

[Ima saver]

That is very true. Now I don't have an atm card, but I know when children see mama and daddy charge something, they don't get the concept that someone has to work to get the money to pay that charge card off.
I wasn't raised like that cause my mama never had a charge card, she paid cash for everything.

[Great to be Debt Free]

Meaghan, I loved yours. Reminded me of when I was in college -- I had two friends, blond twins who defined "blond" and who must be the targets behind all those dumb blond jokes out there. Both were great scholars, but man oh man...

And one did exactly what your said -- Oh, look, somebody put money in my account -- the number is going up! (In parentheses -- negative balance)

They also left their convertible (old, beat up, but a convertibel nonetheless) with the top down in a rainstorm. Of course, it was full of water. Someone advised them to put kitty litter in there to absorb some of the water, so they did. They poured 60 lbs of kitty litter all through it, and didn't even bother to sweep out the standing water or blot any up with old towels. They has SUCH a mess! It was like concrete when it dried.

They hadn't cleaned it out when one of them got pulled over for failure to come to a complete stop. The cop laughed so hard when they explained it to him that he actually had to sit down. Of course, the cute twins got out of the ticket, but the car was not the same again!

[cicy33]

Originally Posted by Snoopy2645

Talking about tax refunds reminds me of my now SIL & BIL when I was first dating my husband now he told them I was getting around 5k back on taxes because I got the childcare tax credit & EIC & head of household I got everything well they tried to do it too then they thought why not Well only one problem they didnt pay daycare or qualify for EIC because they both worked just enough to not get it & were married. I just laughed at them I thought why in the heck would you think you could cheat the tax man???!!! They really thought they could just go in & say they paid daycare they didnt know you had to have receipts & a tax id or ss# for the daycare!!!

I wasn't aware daycare costs were deductible? of course we don't pay them. However, we have always gotten the EIC credit and I know there are people even on here that complain about people like me that get it, but oh well. I work and pay taxes too. We also pay child support in the amount of $500 per month and that is not deductible. and apparently she does not have to report it as income. our state has all taxes! lucky us! One town over became a home rule town recently and raised their tax another 1/4 percent above the increase the state gave them. So, I pay taxes to buy stuff, pay taxes to work, and pay taxes when I sell stuff. I sometimes feel that I am taxed to death.

[Mathew Green]

One of my co-workers (about 30yo) told me this: "When you are young, being in debt is bad; but after you're 50 or 60, debt is good! When you're that old, you can spend as much as you want on stuff, make the minimum payment every month, and then buy more stuff to run the balance back up. Why should you care? You'll get old and die without ever having to pay back what you borrowed! A young person can't do that." He was totally serious and really believed what he was saying.

A group of us were discussing what we'd do if we won the lottery ($40-million). One co-worker who had never made more than $20k/year in his life said that he'd use the $40-million to buy rental houses so he'd have enough income to quit working.

FWIW, my own answer to the lottery question was: "If they took half of it for taxes ($20-million) and I spent $200,000 a year, the money would last 100 years; so I guess I'd have to give most of it away." None of my co-workers thought that was a good idea!

Not money-related, but typical of the dumb stuff that gets passed off as wisdom nowadays: On the TV show 'Num3ers' the character who is suposed to be a total mathmatical genius poses a question to his class:

"I have three doors. There is money behind one of them and a goat behind the other two. Pick a door." Two students pick two different doors, and he opens one to show that it is a goat. Then he asks to the other student if they want to exchange their door for the one neither of them picked and if doing so would make any difference in the odds of them winning. The class concensus is that it would make no difference, but the 'professor' explains that it would because when they first chose that door the odds of choosing the correct door were only one-in-three, but now that there are only two doors left the odds of picking the right door are 50-50... "so if you switch doors now, the odds are higher that your new choice will be right!"

The logic of that scene is so bad that even a gradeschool kid ought to see through it, but aparently neither the scriptwriters, not the actors, nor the "mathmatical consultant" listed in the credits at the end of the show realized that having a 50-50 chance of the money being behind the unpicked door means there is also a 50-50 chance that it's behind the door they already chose!

Things like that make me talk to the TV set loudly. So does "Deal or No Deal" -- A glaring advertisment if there ever was one for the fact that average people don't understand odds and/or are insanely greedy. I'm using the word 'insane' on purpose. When the banker is offering $40,000 and 4 of the 5 amounts left on the board are less than $20,000; and momma and poppa and girlfriend and best buddy and the entire audience is yelling "Take the $40,000"; but the contestant just has to open one more suitcase in hopes of getting a better offer.... That is 'insane greed' IMO, and yet that scene and other similar ones played out several times in the episodes I watched of 'Deal or No Deal'. I kept tuning in night after night until I couldn't stand to watch it any more, just because I just couldn't believe what I was seeing on the screen!

[LuxLiving]

Originally Posted by PrincessPerky

One who thinks bouncing a check is a good way to 'float yourself a loan' (I suppose it is cheaper than a payday place?)

Until the district attorney comes and hauls him/her to the pokie for passing bad checks.

Bummer!