financial tips

My guess is that at some point in your life, you’ve watched at least one episode of Judge Judy as you’ve been flipping through the channels during the day. Maybe you’ve seen it playing in your doctor’s office or at a local diner. At first it seems like nothing more than a reality court show, but it actually is an excellent source of practical life lessons and money management skills that everyone should keep in mind. As most of the cases on the show tend to deal with money or financial matters, here are a few crucial money lessons that people can learn from watching the show. Below are some of the more important ones:

Money Makes People Act Irrationally

Anyone who has watched even a snippet of the show knows that people become irrational when it comes to money. Even the nicest and kindest people can turn vicious when their finances are on the line. This is an important money lesson to keep in mind as you read some of the other tips below.

Be Wary of Co-Signing on a Loan

If you search for “lessons learned from Judge Judy” on Google, you’ll find many different life/money lessons people have learned by watching the show. However, one that appears on almost every single list is being wary of co-signing a loan unless you’re married or in a long-term, committed relationship with that person. When you co-sign a loan with someone else, you’re responsible for the payments even if you’re co-signing for an item that you don’t use. So, if that other person flakes out and doesn’t pay, you’re on the line for paying off the loan and it’s up to you to fork over the money.

Don’t Put Your Name on a Loan for Someone Else

Another tip to keep in mind is to never put your name on a loan for someone else unless it’s a dire circumstance. For instance, say your significant other wants you to take out a loan for them so they can buy a car. What happens when they decide not to pay that loan or break up with you? Since your name is the one on the loan instead of their name, you’re the one who is responsible for paying it off.

A Gift is Not a Loan

Many of the cases that appear on the show deal with people who don’t know the difference between a gift and a loan, and the one thing that all should take away from this is that if you give money to another person as a loan, have them sign a paper stating as much. If you are in a relationship and end up giving your partner money for a variety of things on a consistent basis over a long period of time without getting paid back, then you break up and want your money back because it was a loan, you’re likely going to be out of luck getting that money back without a signed document saying it was a loan. Since the money was never expected back during the relationship and only once that relationship ended, there is a good chance that it would be viewed as a gift. Always get a signed document stating that any money given is a loan if you want to make sure you’re paid back.

Oral Contracts Aren’t Binding

In addition to the last point, the show makes it clear that oral contracts aren’t legally binding. If a friend promises to pay you back, but you have no documentation to prove that they said this, you have no case to take them to court. Many people believe others will honor their promises, but you cannot hold someone legally accountable when all you have is that “she said she would pay me back” and nothing else. Again, if you are making any type of financial transaction, put it in writing and have all parties sign it.

Loaning Money Can Ruin Relationships

As most of the cases that end up on the show demonstrate, loaning money can ruin relationships. It doesn’t matter the type. Loaning money can ruin romantic, familial, and close friendships with equal force. People get protective and defensive over money they owe or are owed. Judge Judy shows time and again that loaning money can cause a huge rift in a relationship that may never be able to be repaired. Not having a friend or family member pay back the money they owe you is a serious cause of tension and can fracture not only your relationship, but the relationships of those around you.

Don’t Expect Someone to Pay for Your Bills

If you watch the show more than a few time, you will soon see a pattern where there are a lot of people who expect that someone else will pay for their bills or debt. Unless someone is a co-signer on a loan, people aren’t legally obligated to help you pay for your bills. A lot of the cases deal with parents or children or significant others who expect someone to pay for them while they don’t contribute anything financially. One of the biggest money lessons to take away from the show is the knowledge that you are the main person responsible for your financial decisions and that no one is obligated to help you out of a financial mess you’ve created.

Be Smart About Managing Your Money

A general money lesson to gain from watching the show is the knowledge that you have to be smart about managing your money. Many of the people who end up on the show are there due irresponsibly spending their own money or making the poor financial decisions to help others who can’t manage their own money. The show reveals that these poor money decisions can end up being costly and are a great reference of mistakes that you want to avoid making yourself.

Have Paper Trails for Big Purchases

One of the important lessons from the show is that if you ever make a large purchase together, give cash to someone or pay off part of a loan, keep accurate records on how much and when you paid. Again, just saying you did something without being able to verify it with a paper trail will usually cost you in the end. If you make payments in cash, always get a receipt. Paper trails can definitely help you out of any unfortunate financial circumstances where you’re not to blame.

Don’t Loan Money You Don’t Have

Another of the many important lessons that you should take away when watching Judge Judy is that you should never loan money you don’t have. If you need the money for something else, you are going to make a huge financial mistake letting someone else use it. Loaning money you don’t have means that you’re unnecessarily creating a financial problem for yourself. If you do need to loan money to someone, make sure that you’re financially stable enough to do so. Never put yourself into debt for someone else.

Do you watch Judge Judy? if so, what other money lessons have you been able to take away from the show?