I’ve made so many money mistakes throughout my life.
Maybe that goes without saying. It’s why I find myself so close to retirement age and so mentally ready to make the change, but forced to continue working because the money just isn’t there.
The best thing I can do, now, is to be transparent and share my money follies with a hope that you don’t have to share these experiences. Below, I’ve listed 11 of what I consider to be the worst financial mistakes I’ve made throughout my life. There are certainly many more, but these are the whoppers that stand out the most.
I followed the list of mistakes up with some decisions that could have been mistakes, but they turned out alright. Read and enjoy.
What are my worst and most regrettable money mistakes?
Thinking that something I can buy will make me happy. Why couldn’t I just learn to be content? Everyone around me always had cool things, so I wanted them too. I just knew that if I owned that one thing, everything in my life would be wonderful. I would live happily ever after. Except that I wasn’t happy. There was that one more thing that I needed before I could be happy.
At 56, I finally get it. Things don’t make you happy. They never have, and they never will. It’s the relationships and the experiences that bring a smile to my face when I think about them.
This discontent caused my next big mistake.
Not learning to save money. I didn’t ever develop a pattern of saving. I spent every penny I got my hands on because I somehow felt that the thing I was buying would provide me with happiness and satisfaction but it never was enough. I always wanted more.
I got my driver’s license and wanted my own car. It was my first major purchase and I borrowed money to buy it. Then I worked to be able to make the payments and keep the car running. That began the pattern of leveraging my income to continue getting things that I thought would satisfy my desires.
Going to college without a plan. I went away to college immediately after completing high school before I had any clue about what I wanted to do in life.
I believe in education and think that everyone should continue to educate themselves throughout their lives. I believe that an investment in education can be one of the best investments you will ever make.
I also believe that spending huge sums of money on an aimless search for purpose (that’s disguised as education) can be one of the worst financial decisions.
Buying life insurance (a whole life policy, none the less) before I had any dependents. First, If you have no dependents, you don’t need life insurance. No one is depending on your finances.
Secondly, cash value insurance is a terrible investment. Anyone who tells you otherwise is lying. If you buy term insurance (it’s really, really cheap) you will have extra money to invest in mutual funds, or real estate, or just about anything else that will get you a better return than a whole life insurance policy.
Heck, you can probably bury the money in a coffee can in your back yard and come out better than a whole life policy.
Using credit cards as a method for affording anything I wanted to purchase. Not living within my means was my way of life. How much money I had was never a consideration when I wanted to own something. About the only thing that mattered to me was if I could come up with the money to make the monthly minimum payments.
My credit card lifestyle led me to a position where, at one point, I had over $75,000 in credit card debt. That doesn’t include the mortgage, the car loan, student loans, and other installment debt I maintained on top of that.
Not paying off the credit cards each month. I could only come up with the minimum payments. I’m still working on the debt snowball to pay off that old debt. It will finally be gone in less than a year from the time I’m writing this post.
I have one credit card that I use today for almost every expense in my budget. I’ve earned several airline flights this way.
This card gets paid in full every month. I transfer funds from my checking account to my savings account for each time I use the credit card. That way, when the payment is due, the money necessary to pay the full amount is ready and waiting.
Buying a lifetime membership in a health and fitness club. Some friends of mine gave me a “Gold” membership as a gift. I think it was because they didn’t use it and wanted to get out from under the monthly payments.
As soon as we became “Gold” members, the sales people at the club sold us the upgrade to “Lifetime” members. We eagerly upgraded, even though we were only using the facility a few times each month.
Very soon after we purchased, we quit going at all. Not too long after we finished paying for the lifetime membership, the club went bankrupt and closed down.
Selling a perfectly satisfactory (and paid for) Dodge Colt and buying a used Ford Thunderbird on a 4 ½ year contract. The Colt was my wife’s car. It was paid for. It ran great. We convinced ourselves that this Thunderbird would be more practical for us when we started having children because it was a larger vehicle. I know now that any 2-door vehicle is impractical when you are getting babies in and out of car seats in the back seat. It doesn’t matter how big the 2-door car is.
On top of that, the monthly payment for the newer car just about buried us. We had more trouble paying our bills during that period of time than just about any other time in our lives.
Selling our first house to purchase a larger house. I can’t tell you how many times I’ve thought about this one. Our first house was very adequate. We had a small 3 bedroom 2 bath house with a 2 car garage. It fit us just right while we had 2 children.
Once we became pregnant with our 3rd child, we began to panic with the thought that 2 of our 3 children might have to share a bedroom. Oh my gosh! My children will be damaged for life.
As it turned out, even though they each had their own room, my kids would mostly share rooms, anyway, because the didn’t want to sleep alone. Go figure.
Adopting a philosophy of “make more money” instead of “live within your means” to try to get finances under control. If you are spending every nickle you earn, and you want to get out of debt, you will need to either make more money, or spend less money.
For me, spending less money didn’t sound so fun. I chose instead to jump into every get-rich-quick scheme I came across. That philosophy added to my credit card issues. The schemes didn’t get me rich. The just got me more broke.
It wasn’t until I learned to manage my spending better and adopt a more fugal lifestyle that I began to rapidly pay down my debt.
Using debt to fund my children’s college education. With a little pre-planning, I could have had some savings available to take care of that. Better yet, I could have taught my children to work, and save, and plan ahead.
Instead, I’m still working on paying parent loans.
Expensive financial decisions that I don’t regret.
Some of these decisions I made will seem very stupid and irrational to you. They just may be. But each of these decisions has made my life much happier, so I have absolutely no regrets that I made them.
Getting married before I had my financial house in order. If I waited for everything to fall into place, I’d still be single today. I would have missed out on a lifetime with my best friend in the world. This decision just worked out.
Having children before we could afford the costs of raising a family. I have the best children in the world. Not only that, but they are giving me the most amazing grandchildren a Nana and Papa could ever ask for.
Returning to complete my college degree after I had developed some long term goals. This was one of the most challenging things I ever did.
After I had been away from college for nearly 10 years, I returned to school full time for the final seven (consecutive – summer included) quarters of college. I commuted an hour each way, and maintained a full time job, all while raising two children. This was a team effort. I could not have made it through this time without the full support of my wife.
Selling our house just before a real estate boom and choosing to rent, instead. We were in an amazing 2400 sq. ft. home on an acre in the country. We had just recently added a 720 sq. ft. multi-tiered deck on the back of our house to help us enjoy the view of the valley below us.
We enjoyed family gatherings during most holidays, evenings around the fire pit toasting s’mores, and rocking together on the swing under the grape arbor. In many respects, life couldn’t have been much better.
The downside was that the place was sucking us dry – both financially and physically. Even though we had attempted to make everything as easy to maintain as possible, it was just so big. It took hours every week to keep up with the maintenance. The half-acre lawn needed to be mowed. The weeds had to be pulled or sprayed. Occasionally, I had to replace a well pump or repair the septic system.
The bottom line is that since we sold, life is much easier and we are much happier. Yeah, by selling when we did, we left a lot of equity on the table for someone else to benefit from. I don’t really care. Without selling when we did, we would never have been able to get our debt in order the way we have. Honestly, my net worth has grown more without the house than had we kept it.
Conclusion
You go through your life and make so many decisions with your money. Some are good, some are not so good. You can only do your best. Hopefully, you can take some of these experiences to heart and improve your life as a result.