The Rapture Retirement Plan

Every so often, a religious figure appears in the news headlines proclaiming that the world will end at a specific date in the future, or that the faithful remnant will be taken up from the earth in the blink of an eye. Of course, history shows that the track records of these prophets have thus far been less than perfect. But an ironic truth can be found in the budgets, checkbooks and financial statements of many Americans who are quick to laugh at these doomsayers. These items reveal a mindset that the world will end tomorrow …or certainly before they reap the consequences of their current financial irresponsibility. There are several financial habits that reflect this mentality. (For those who don't believe in the Rapture, check out 5 Painless Ways To Save More Money.) TUTORIAL: Retirement Planning

Failure to Pay Taxes
If the end was really going to come tomorrow, then it probably really wouldn't matter whether you paid Uncle Sam or not. But since this is uncertain, the smart play is to stay current on your tax payments. And the failure to file taxes is an even bigger mistake; the penalty on your unpaid tax for this accrues at 10-times the rate as the penalty for simple failure to pay them.

Failure to Save for Retirement
It can be tempting to forgo having to save now in order to be able to buy items that you want now. And, of course, if the end comes before you stop working, then you will have gambled and won. Unfortunately, if this doesn't happen, you will be left without any savings after your working years have ended - a scenario that can have ugly consequences. (To learn how you can save for retirement, read 7 Tools For Rebuilding Retirement Savings.)

Failure to Pay Off Credit Cards or Other Debt
Just like saving for retirement, it may be tempting to forgo making payments on your car, credit card or other debt and spend the money now. But this can have very destructive consequences for you over time. Your credit rating will be destroyed, along with your balance sheet. Waiting for the world to end before this catches up with you may result in substantial inconvenience.

Purchase of Big-Ticket Items
If you believe that you won't ever have to suffer the consequences of your actions, then why shouldn't you buy that second home, cabin cruiser or Caribbean cruise? You can afford the payments for the moment, so that's all that matters. Besides, if the end is coming, then why not enjoy yourself in the meantime? (For more information on saving, check out 12 Ways To Shop Smarter.)

Spending Your Retirement/Investment Portfolio
This is perhaps the most foolish of all financial behaviors. But it falls right in line with the other habits listed here. You've worked hard to build up your portfolio; shouldn't you be able to enjoy it now? If the end comes before you have the chance to liquidate your savings, then won't all your efforts have been for nothing? You can't take it with you, so spend it now!

The Bottom Line
Of course, most people who engage in the habits listed above have no particular beliefs about when the world will end. They simply persist in managing their money as if they believe that it will end very soon. Many consumers refuse to face the fact that their finances are out of control and need substantial adjustments. Those who are unable to come to terms with their spending and saving habits are every bit as disconnected from reality as the prophets who tell us to prepare for the end. Unfortunately, the consequences of this type of irresponsibility can last a lifetime. (For more on how to save money, check out The Beauty Of Budgeting.)

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