Don’t try these at home: My worst money mistakes from 2000-2009

Don’t try these at home. People often wonder what qualifies me to write this blog. I sometimes wonder myself. By no means am I a financial guru. I do learn from my mistakes, though, and have stumbled enough times over the years to know the pitfalls of poor decision making. As a result, I usually make good choices now and I try to act on all of the things I’m allowed to share in this space. From using coupons to making sound investments, I’ve dusted myself off from the blunders you’ll read below and though I’m not clean as a whistle, I’m a lot better off today than I was.

I know there will be a host of commenters who’ll ridicule me and argue my qualification to author a blog called Atlanta Bargain Hunter. Have your say. I’ll counter that wisdom comes with time and age. Fortunately, I’ve had both on my side.

So, here you have it: Some of the biggest, most embarrassing money mistakes I’ve made over the last decade:

1. I let someone borrow a credit card in case of emergencies.

Result: My card was maxed out and I continue to make payments on it. Thankfully, I’m on track to have it paid off within a year.

2. I failed to roll over my 401 (K) when I changed jobs.

Result: I lost thousands and had to pay taxes on the money I received. A double-whammy.

3. I didn’t ask for more on the house.

Result: Sometimes, being in a hurry isn’t smart. I relocated out of state and had to sell my house. I was in such a hurry, I didn’t even take the time to counter-offer on my home. In retrospect, I could have gotten quite a bit more from the sell.

4. I co-signed.

Result: When a friend needed to move to an apartment quickly, I agreed to co-sign. Big mistake. When the rent wasn’t paid, whose number do you think the company called?

5. Victim of fraud.

Result: I’ve learned that hard way how important it is to protect your identity and your assets. Paying closer attention to daily transactions would have prevented what could have ended up being a costly ordeal.

6. Impulse shopper.

Result: I’ll admit that I was never one to look for sales, or to show patience while shopping for a coveted item. Rather, I saw it and I bought it. I now know better. I don’t pay full-price for much of anything these days and know when items are marked down. I also am a wiser grocery store shopper, returning to old habits of using coupons and buying in bulk when it makes sense to do so.

7. Not saving.

Result: I don’t know about you, but I can’t trust myself when it comes to saving money. While I’ve contributed to my company’s saving program, I haven’t always done much in terms of personal savings. Luckily, I nipped it in the bud early. I have money automatically placed into a savings account, and have recently begun using an online savings account for a better interest rate.

8. Where to tonight?

Result: There have been weeks and months at a time when I ate out religiously. I have scaled back dramatically and eat dinner out only once or twice a week. While that may still sound like a lot for some, it is a big change for me, as I routinely ate out five or six nights a week. Making it worse, I didn’t look for coupons or specials.

9. I sold everything.

Result: In yet another cross-country move, I decided — rather impulsively — that I wanted to start anew. So, I sold practically everything I had. Couch, television, bed…you name it. What was my plan? Well, I had none. I bought new furniture and paid a handsome price for it, all without giving it a second thought until my credit card bill arrived. That was long ago and I’ll never make such a foolish move again.

10. Sure, I’ll buy it.

Result: I met an insurance salesman outside the gates at a college football game. He made a good pitch, and the next thing I knew, I was paying too much for insurance that I didn’t need. Before I buy anything nowadays, I take a deep breath. If it’s such a good deal, it will be available later. Sometimes I wait too long to pull the trigger, but that’s better than taking the first bite.

There you have it. I wasn’t taught smart money management growing up and have made some pretty ridiculous mistakes in adulthood. Here’s hoping this little slice of life will prevent you from traveling down some of the treacherous paths I’ve taken and that we end up in the same place — smart decision makers with a steady eye on the prize that lies before us.

My New Year’s goals:

1. Grow my emergency savings fund. I’ve made progress and will continue working on this.

2. Continue my education. In ways small and large, it is important to keep growing in order to improve your chances of continued financial stability. Nothing is promised and many qualified, intelligent professionals have lost jobs this year. In droves, many of them have turned to continuing education in an effort to have more doors opened to them in the future.

3. Pay off debt. As I mentioned earlier, I’m very near paying off what was a substantial amount of credit card debt. Even though I didn’t run up the charges, my mistakes led to the problem and I intend to correct it once and for all this year.

4. Make home improvements. Eventually, the housing market will turn around and may someday want to sell my home. To do that, I need to make some improvements. However, I plan to follow many of the DIY steps you’ve read on my blog to save money during the process.

5. Take care of important paperwork. If you don’t have a living will or estate plans, you should. You’ll also want to organize your finances and make sure you have access to important documents that you or your spouse could someday need.

Happy New Year!

19 comments Add your comment

Noah

January 4th, 2010
8:50 am

Add disability insurance and possibly life insurance to the important list.

lovelyliz

January 4th, 2010
9:05 am

My big $ mistake generally runs around making “loans” to friends and family. Loan implies that the recipient has assumed some responsibility to pay back at least the original loan in a timely manner. Maybe it’s them or me, but they almost never ever pay back everything the way they say they are going to and the lender (me) is left with less $ and a sense of foolishness.

I have learned my lesson: never lend but giving it away, if you can afford it, is the way to go. If you can’t afford to lose it all, then simple say no.

HP

January 4th, 2010
9:11 am

Good ideas Noah.

I think we have all made these mistakes at one time or another. However, I think a couple of things should be reiterated again:

1. DON’T COSIGN ANYTHING, FOR ANYBODY. PERIOD. If you are a full-fledged adult with a job, and you can’t get a decent apartment in a decent area or a car without a double-digit interest rate, you haven’t just made one or two money mistakes. You have a long history of doing harmful things to your credit. Go live in the hood and pay too much for your car. We all have to pay for our mistakes in order to learn (just like the good blogger) and move forward. Why should anyone be exempt from that???

2. If you lend people money, make it a gift and not a loan. Seriously. It just saves a lot of grief and bad feelings down the road. I do this only for close, life-long friends or immediate family. You should not do this for a new boyfriend of girlfriend who has “fallen on hard times.”

These sound harsh – and maybe like common sense – but I have seen so many people get burned in these very situations. And it is not just money – it is hurt feelings, etc.

Too young for this one....?

January 4th, 2010
10:02 am

Not having a properly diversified investment portfolio can be huge mistake. Just ask anyone who is approaching retirement age and has owned way too much exposure to equities.

Or ask some poor sap from Wachovia, Enron, WorldCom….. ect. who put the lion’s share of their 401k money into their company stock.

Just me

January 4th, 2010
10:30 am

This year I plan to go from a good credit score to a GREAT credit score. I just happened to solidify a mortgage a day after interest rates took a plummet. I was able to see first hand what a one point reduction in interest can equate to. I’ve already bought the house and own my car outright, so I really have no plans to use credit for the next several years (I pay cash for almost everything) but if I need to, I want to be READY!!!

BongWater Slurpee

January 4th, 2010
10:49 am

My worst investment was attending a 2 year college course on being trained as a washroom attendant.

C Tucker

January 4th, 2010
11:09 am

Add purchasing a subscription to the AJC.

Kar

January 4th, 2010
11:25 am

Wait, is buying a subscription a DO or a DON’T? Could be either depending on your viewpoint, and the fact that we’re all looking at this online.

Gretchen

January 4th, 2010
11:29 am

I will be finishing my Master’s Degree in Dec 2010 thanks to my company’s tuition reimbursement program! And will continue to pay off debt. That is my revolving New Year’s resolution.

Tinytam

January 4th, 2010
11:33 am

I plan to save, reduce debt and live on a budget for the first time in years so I can save money. My worst money mistakes have been not using a budget to manage my household more effective. I make sure all bills are paid on time and in full but don’t do as much to save and pay off debt early. Good luck to everyone in their goals for 2010!

Kat

January 4th, 2010
11:44 am

Remember, you are a “Bargain Hunter,” not a financial advisor, so cut yourself some slack. Not too much though, it will get you in trouble. I always like your column!

Rana Cash

January 4th, 2010
11:57 am

@Gretchen, wonderful plan and one many of us should be taking advantage of.
@ Kat, thanks for the encouraging words.
@ Just me, congrats and keep up the good work
@Noah, great advice

Bill

January 4th, 2010
12:01 pm

Add #6:
Attend Dave Ramsey’s Financial Peace course. He will help you stop paying all that Stupid Tax. The wifey and I attended the course in fall, 2008 and it has completely turned around our finances, for the better. Have each dollar allocated at the beginning of each month. If you don’t control your money, it will control you.

LS

January 4th, 2010
12:08 pm

Our biggest money mistake was trusting Wells Fargo with our mortgage

Sally

January 4th, 2010
12:08 pm

Thirteen years ago I paid off my then current bank card and vowed to never keep a running balance on a bank card again. I have managed to maintain that, I never charge more than I can afford to pay each month and pay all bills in full each month. Also, when shopping at stores such as Macy’s, before I buy anything, I ask myself “do I really need this?” The answer is usually “no.”

Old Timer

January 4th, 2010
12:14 pm

I’ve been to the School of Financial Hard Knocks too. My experiences are more philosophical rather than specific practices.

Don’t exhaust all of your money on your children. Of course, you love them and want the best for them, but don’t sacrifice your future for their present happiness. They have plenty of TIME to fund and pursue their dreams. Besides that, they don’t want to have a needy old person at their house.

Know that sometimes bad things could happen to you……..job loss, illness, etc. Save some money and you’ll rest easier.

Take care of your health, first, last and always.

Stop trying to impress others with your “stuff.” Ask yourself what would you buy if no one in the world could see it except for you? If you would still buy the item, then fine. Otherwise, other people really don’t care about it. The “ooh factor” lasts just a few minutes.

You need three major thngs to be happy…….someone to love, something to do and something to look foward to. Add a litte cash to and you’re good to go.

BongWater Slurpee

January 4th, 2010
12:24 pm

Here is a way we ALL can save money. How you ask? By STOPPING the kenyan and his OboboCare… http://youcanstopobama.com/

Gretchen

January 4th, 2010
1:12 pm

Thanks Rana! I turned 30 this year and figured I’m not getting any younger and I might as well take advantage of the opportunity at hand. The light IS at the end of the tunnel!
I too am trying to stay on the ball w/ Dave Ramsey’s plan. It’s hard, especially with unexpected emegencies hit – roof damage, car repairs(condenser went out), etc. But life happens. You do what you gotta do.

[...] chronicled the same here in this space. My transgressions range from lending someone my credit card for an emergency that turned into a maxed-out disaster, to neglecting my bank accounts and co-signing on a loan. [...]