Today’s post is from our regular Wednesday contributor, Cat.
Money mistakes: they happen. I’ve written about many of mine right here over the past year or so. Remember that time I paid three rents at once? Yeah, that was one for the books.
The thing is, although I wish I hadn’t made some money mistakes ($39,00 in student loan debt anyone?) I do think I’m a better, more knowledgable personal finance writer because of them.
Yeah it might be nice to go through life without making money mistakes, but what’s the fun in that? There’s no risk, no opportunity to learn, and no way to look back and see how far you’ve come.
Here’s why I’m glad I made my money mistakes, and why you should be too:
1) We won’t make them again
Not only will I never make the same money mistakes twice, but I definitely won’t let my kids make them. Every time they go to rent an apartment, you better believe I’m going to make them comb through every last detail of that contract.
If they want to take out a loan, whether it’s a student loan or a small business loan for whatever reason, we’re definitely going to talk at length about it. They’re going to know every last grueling detail of each money decision they make, and hopefully we can lead by example too.
2) They let me know I’m human
Mistakes keep us humble. The last thing I want to do is write about finance day in and day out acting like I’m some sort of money wiz. Yes, I have learned a lot in 4+ years of blogging about these things, but there’s so much I don’t know. There’s so much I want to learn, and I’m constantly impressed by others who live their lives in ways I admire.
3) They’ll haunt me
Yes, I’m glad my money mistakes haunt me, sometimes every day. And you know why? Because when I think about my student loan debt, when I think about the stupid things I’ve done, I remember not to go down that slippery slope. There are times even now when my credit card balance gets too high, and I have to move things around a bit in order to pay it off.
Ever since I paid off all my credit card debt two years ago, I’ve paid off my balance in full every month. There have been a time or two I came close to not being able to do that, but I found a way to make it happen because I remember what it was like to be in credit card debt, and I don’t want to go back.
Chances are, if you’ve come to terms with your money mistakes, you’ve gone through a period of mourning and wondering why on Earth you made the decisions you did. I’ve been there. However, instead of beating yourself up, let’s turn over a new leaf. Be glad for your mistakes because they made you wise. Be glad for them because they made you more aware, and be glad for them because after all, you’re only human.
What was your worst money mistake?
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I forgive myself and my husband about our money mistakes and put them in the past. But every once in a while when I feel that ole debt fatigue setting in, I beat myself up a bit. I know I won’t repeat the mistakes, but I still feel incredibly stupid and guilty sometimes. To try to switch my thinking, I focus on my kids and how wonderfully they’ve turned out, reminding myself “Oh yeah, that’s what I was doing while I was ignoring our finances”. I guess I can also say to myself, well working for four more years than planned is not the end of the world – 1 year for each kid! ha ha
debt debs I think that’s pretty normal to feel debt fatigue and debt guilt. What’s important is that you just keep on keepin on. You’re doing awesome Debs. :)
Definitely an interesting way of looking at it, but I think you’re totally right! I think about my past money mistakes every day, and you can bet I won’t repeat them. I’m even trying to keep other people from making the same mistakes!
RetiredBy40 Same here on both accounts!
Hindsight is 20-20. That is the only sure bet.
There’s always so much more to learn. I’ve definitely made my fair share of money blunders.
My worst money mistake was financing a 25K car with zero down and a low wage job in my early 20s. I did learn a lot from it so I suppose I wouldn’t change anything!
Worst money mistake? Well I have made a few… probably the worst was getting a loan for a new car in 2012. Next worst? Maybe getting a CPA review course for $3,000 that work was going to pay for, then get a new job causing my to have to pay them back and now I cannot obtain my CPA in my current work situation so I had $3,000 in study materials that became basically worthless. But on a side note I am much happier with my new position and the wage increase is over that difference.
Life is a series of forks in the road, each one requiring a decision. Nobody has every chosen the right path each time. We learn with each choice, whether right or wrong, and makes us better equipped to handle the next one. There’s a lot to be said about experience…!
No Nonsense Landlord Right? It’s so, so true – at least for me!
brokeandbeau Oh yeah we’ve all been there!!!
Holly at ClubThrifty I think you’ve done pretty well since then! :D
FranklyFrugalFI Well that’s good. Hopefully you can sell your course materials??
DebtChronicles I know – experience can be a great (but brutal) teacher!
While reading about other people’s mistakes is a great way to avoid them, sometimes you have to make your own mistakes for those lessons to really change your ways. Nothing haunts you more than personal experience going through a bad money mistake.
Totally agree that our mistakes can be good things – as long as we learn those lessons! My biggest mistake, and this is going to sound very harsh, is marrying my husband with his massive student loan debt and poor job prospects. He’d never worked a day in his life, but thought he knew all about how it would be once he had his Master’s degree. In hindsight, I think he would have been much more motivated about his loans and his career if I had said “yes, I’ll marry you… After you graduate and have been working in your field for a year. And please try to pay down loans in the meantime'”. We were married over three years before be accepted his first full-time job. My earnings were, thankfully, enough to pay his student loans and mine.
Sometimes, I’m so hard on myself that I forget it’s okay to make money mistakes! I think the best thing for me is to remember it was a mistake and keep in mind how it happened (so I don’t let it happen again), but without being hard on myself. And obviously, my biggest money mistake was taking out $206k in student loans. I don’t regret my education. I don’t regret some of my loans. But a lot of them could’ve been avoided by not going to a private undergrad and not funding my living with loans during undergrad and law school. That definitely haunts me everyday!
My worst money mistake was not having enough saved when we purchased our home and it does haunt me and will probably haunt me forever, but it’s true that mistakes have value and I honestly learn the most from my mistakes than my successes so I am okay with them (as long as I am learning).
Credit card debt was my worst money mistake, but it did teach me lots about what I am capable of. It’s probably a good thing we had that debt or otherwise I might still be socking away a whopping 3% for retirement and working until I’m 70.
The idea of my money mistakes haunting me is NOT comforting, Cat!
I don’t know what my worst money mistake was… I kind of like to think that it wasn’t starting a blog while I was in university… I could have so much passive income by now if I had!
My money mistakes definitely haunt me, and I like it. It means I’m never going to make them again. Honestly, if I didn’t make a crap-ton of mistakes, I likely would have never become that good about my finances. It really was a blessing disguised as a terrifying nightmare. But grad school was definitely my biggest money mistake. Loans + no income + impractical degree = trouble.
ImpersonalFinance I made a similar grad school mistake although I enjoyed my program and learned a lot – I just wish I didn’t borrow so much money to live during that time.
moneypropeller Haha sorry – I mean it isn’t comforting but it lights the fire, ya know?
Eyesonthedollar I think that’s great – you always learn from mistakes most!
blonde_finance I agree – Learning is the whole point!
theFinancegirl I feel the same way. Don’t regret the education so much as regret taking out too many living expenses.
indebtedmom Wow that is so hard. I get it though. ;)
Andrew LivingRichCheaply It’s true. You can cringe reading about others but when it comes to yours – they haunt you like I said!
Number 3 is spot on. I have a few money mistakes that haunt me. I’m working on eliminating them forever though.
I think #1 is the most important. Learn from your mistakes! Make them, learn, and move on! Great post.
Jay
I always try and look on the bright side of making mistakes. They really are a learning experience, and you’re generally better for it at the end of the day. It can be tough to see in the moment, but like you said, it can have other benefits. I know I learned a lot from watching my parents make mistakes!
BudgetBlonde FranklyFrugalFI I have waited too long to do that, should have gotten on it right away. Course materials change every year (probably not drastically tho)
It’s true that we really don’t know it all so we’re bound to make some mistakes. Some of them I’d like to forget because they were epic fails when I knew better but it is long done and over with. But at least I will make sure to never repeat them again.
FranklyFrugalFI BudgetBlonde Yeah there’s no way you could sell your CPA materials after a couple years. I’m about to invest a little less than a grand on CMA study materials : (
I once chipped in 5K to do a foreign exchange training course program.. While it wasn’t a massive and irrecoverable mistake it’s one that I probably didn’t need to make..
Out of interest as well why would you say that educating yourself and student loans was a mistake? I’ve always thought education for the right reasons is always a good thing and you usually make up the money down the track :)
This has been top of mind recently. I’m terrible at making big financial decisions – I pro and con things to DEATH and am paralyzed by the thought that my decision must be PERFECT and i must make the RIGHT decision – to the point where I just won’t pull the trigger.
I have been looking for a new car for over a year now. I know the car that I *want* – but it’s not perfect, and I’m panicking that I will make the wrong decision by buying it. This last weekend I had a epiphany – if I buy the car, and after 6 months, decide I *hate* it – I will suck it up for 6 more months, and SELL the darned thing. Worst case scenario I lose a bit of money – but it IS possible to sell a car – I’m not *forced* to keep it for 12 years if it absolutely turns out to be a terrible decision.
That realization – that my decision isn’t something that cannot be undone, ever – is something I really have to keep in mind. Obviously, I still need to do my best to to make the right decision – but the penalty of making the wrong decision, isn’t death or dismemberment in this case :D
Wow! I am working on a 3 part series of my biggest money mistakes. What are the odds? I have made many mistakes over the years and I am glad that I have. I am a better investor, money manager and person because of them. Mistakes can be a great thing if we learn from them. 3 rents at once? That is interesting. lol
Everyone HAS money skeletons in their closets. And I must say one thing that regularly fascinates me about money mistakes is how many people seem to believe they are the only one who has ever made one. They hide them and beat themselves up over them. I may not be proud of my mistakes – money or otherwise – but they have all taught me valuable lessons and in some instances, I wouldn’t be where I am now without them. And I happy where I am. :)
Everyone has made mistakes, even the big guys like Buffet and Gates. But the key is to come back stronger than ever from them. My worst mistake must have been taking the full amount of student loans in my last year of optometry school. I was going to be in a unfamiliar area so I figured I might need some more money for housing etc. but it was way more than I needed. I’m trying to pay that loan off as quickly as possible now!
Jason @ The Butler Journal Rock on Jason – good luck!
Jay at Thinking Wealthy Moving on is my fav part :)
JourneytoSaving I think so too. Everyone makes them – just gotta bounce back and learn from them!
Kassandra @ More Than Just Money Lol I use “epic fail” all the time. :)
mycareercrusade Interesting. I don’t think it was a mistake per say because I gained some skills. I’m just not in the industry I got my masters in so right now it feels like I’m paying off loans for something I’m not using although it was rigorous writing for 2 years which prob helps!
SpiffiKins Actually deciding on things is something that most adults have trouble with. Just remember – it’s just a car. :D
MoneyMiniBlog Great minds for sure!
ShannonRyan I know right? Although I think you’ve been pretty solid. :D
thebrokeprof You’ve got a great career and I know you’ll do well!
Hey we’re human and everyone is going to make mistakes, money and otherwise. I think my biggest money mistake is well documented on my blog which is why I started it…see, something good did come of that. :)
Mistakes suck at the time, but I’m so grateful for each and everyone I’ve made. Sometimes, you’ve got to touch a hot stove a few times before you really know not to touch it. Mistakes help us grow!
BudgetBlonde I added this article to my link roundup! :) http://bit.ly/1vAs3Y4