alfexe / Getty Images/iStockphoto

alfexe / Getty Images/iStockphoto

It takes discipline to save up $15,000.

But it only takes a few poor decisions to lose that $15,000 forever.

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When saving money, it’s important to avoid using your funds for things that don’t bring you a great return on your investment. There are some great ways to use $15,000, such as high-yield savings accounts, investing and more.

But it’s also important to understand how not to use that money. GOBankingRates interviewed three financial advisors and experts on the worst ways to use $15,000. Here’s what they shared.

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Older Luxury Car Purchases

Most people need a car, but driving an old luxury car can come with many hidden — not-so-nice — surprises.

“Allocating $15,000 towards an older luxury car may not be prudent,” said Arielle Tucker, CFP and lead planner at Connected Financial Planning. “This budget, obviously, won’t secure a new luxury vehicle; instead, it often leads to the purchase of a decade-old model. While spending on personal enjoyment is understandable, it’s worth noting that older luxury cars often come with elevated maintenance costs. For those with a $15,000 budget for a vehicle, I recommend considering options that prioritize reliability.”

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Extravagant Getaways

Vacation is nice, but it’s very easy to overspend.

“Investing $15,000 in a pampered escape might offer a temporary reprieve but may not align with long-term financial goals,” said Tucker. “Rather than hastily booking a holiday during peak seasons, I suggest thorough research and early booking.”

“While vacations are valuable, it’s more important to work towards constructing a fulfilling life that doesn’t necessitate constant escapes,” Tucker added. “Setting aside funds for future endeavors ensures the flexibility to start a business, take a gap year or potentially have a part-time work schedule.”

“Picture this: you’re planning the vacation of a lifetime, staying in five-star hotels, dining at Michelin-star restaurants and enjoying every luxury possible,” said Karina Newman, investor and owner of iBuyers. “Sounds dreamy, right? Well, it is until you return home and face the reality of a depleted bank account. Overspending on a vacation can be like a sugar rush: sweet at first but followed by a crash. It’s crucial to balance the desire for an unforgettable trip with the practicality of your budget to avoid post-vacation financial blues.”

Low-Interest Debt Repayment

Paying off debt can be a great use of funds, but only if it makes mathematical sense.

“Interest rates have increased substantially over the past year,” said Tucker. “If you were lucky enough to lock in a low-interest rate mortgage or student loan, you may want to focus your funds on tackling high-interest debt — [for example,] credit card debt — or ensuring you max out your current retirement savings, including employer-sponsored savings — 401(k)/403(b) — and individual contributions like an IRA.”

Tiny Homes

Tiny homes are hot right now — but they aren’t necessarily a good investment.

“One of the worst ways to spend $15,000 is on a tiny home,” said Timothy Connon, founder and advisor at Paramount Quote. “Although they may seem more affordable, most tiny homes are mobile, which means they do not add any kind of value to the property they are stationed on. This means they will depreciate in value just like a mobile home or car.

“Instead of spending $15,000 on a tiny home, consider using that as a down payment for a home. Investing that kind of money into a home that appreciates in value is a much better investment.”

Cryptocurrency Speculation

While crypto investing and trading can be fun, it’s a terrible use of a large amount of savings.

“Think of investing in cryptocurrencies like navigating through a roller coaster,” said Newman. “The highs can be exhilarating, but the lows can be stomach-churning. Cryptocurrencies offer the potential for significant gains, but the market is unpredictable. Without a deep understanding of this roller coaster ride and a solid plan for when things get bumpy, you might end up feeling queasy with financial losses. It’s a thrilling adventure, but not without its risks and uncertainties.”

Bad Side Hustles

A side hustle can be life-changing and help you pay off debt or save more money. But they can also be a time-suck and waste of resources.

“Envision starting a side business, something that promises big returns but requires more time and effort than you initially thought,” said Newman. “It’s like planting seeds and expecting a garden but getting just a few sprouts. Ventures that demand a lot but don’t offer proportional rewards can be like chasing rainbows — captivating but elusive. Before diving into such opportunities, it’s crucial to do your homework, or you might find yourself investing time and money without reaping the rewards you envisioned.”

More From GOBankingRates

This article originally appeared on GOBankingRates.com: I’m a Financial Advisor: Here Are the 6 Worst Ways To Spend $15,000

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