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Financial Mistakes, In Game Form

January 26, 2011 · 116 comments

in Personal Finance

I was reading the post “Never Have I Ever” over at Sustainable Life Blog where you list 5 things you never did, and it was a very fun exercise.

While coming up with my answers, I found that it was easier to think of things I ‘did’ instead of things I ‘never did’.  All of my financial mistakes I have made during my life came flashing across my mind, and I was having a harder time coming up with things I ‘never’ did.  Had the game had a qualifier of “Never I ever did ‘this’ after the age of 30”, I would have been fine…

So, I am making a new game called “A Mistake I Made was…”  (I couldn’t find a way to for “ever” or “never” to work in the title.)   I would love if you would write 5 personal finance mistakes you have made in the comment section of this post.  The focus is personal finance, but if you are the perfect specimen of personal finance, then feel free to list anything!

I will start:

A mistake I made was I bounced a check in college.  This snowballed into a bunch of bounced checks because I was young and inexperienced and didn’t realize how one bounced check can turn into many bounced checks.

A mistake I made was I paid quite a bit in credit card debt when I was first starting out.  I also used my credit card like an ATM.

A mistake I made was I went in to debt for my wedding.  The wedding was not a mistake, but having a wedding larger than I could pay for was a mistake.

A mistake I made was buying a new car out of college instead of used.

A mistake I made was painting our house instead of putting up siding.  The ‘Duration’ paint the painting company used was supposed to be great, but it was garbage and is peeling, and the wood is rotting.  We spent a lot of money on that exterior paint job and it did not hold up nearly like I  hoped it would.  (We had the painting company come out and do repair work, but now it is out of warranty and it has been a long battle.)

Keep in mind, numbers 1-4 were all during my young adult life when I was crawling out of student loan debt.  I have not paid a dime in interest since I was about 25 years old.  (We have bought used cars since then, but we could afford it.)  My paint mistake was more recent, but I had no way of knowing what a disaster that would be.

Ok, your turn….

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{ 42 comments… read them below or add one }

101 Centavos January 26, 2011 at 6:54 am

Wow, there are so many, I’m glad we’re stopping at five.

(1) Buying a new car on payments while working and in college – ended up with a repo (duh!). Friends advised it was a “good deal”. Lesson learned: don’t listen to stupid friends.

(2) Taking a few too many expensive vacations while living overseas. Visiting foreign and exotic places is nice, but looking back on it I was living and partying was beyond my means.

(3) Not starting with good investment practices until well into my thirties.

(4) Buying new furniture. It’s overpriced and it won’t last. A better value is to buy solid vintage pieces, and re-upholster if necessary.

(5) Buying overly concerned with nice clothes, expensive ties and shoes. I keep a good number of those Lavin and Armani and Ermenegildo Zegna ties on a couple of clothes hangers in the closet, as a reminder of a ton of cash spent on now useless frills.


Kris January 26, 2011 at 3:17 pm

101 – That’s funny, I thought I would be the only one that could come up with 5. (I could come up with 10!)

I never even thought of buying anything BUT new when it came to furniture, but your comment makes total sense.

Re-sell those ties!!! 🙂


101 Centavos January 27, 2011 at 6:54 am

Re-selling the ties? That’s a tempting thought. On the other hand, since they’re in classic color, pattern and most essential, width (3-1/2″ wide), they won’t go out of fashion anytime soon and I could pass them down to the boys.


Nicole January 26, 2011 at 7:52 am

I like to remember myself as perfect, so I have a little black box in my mind that I lock all mistakes in. Otherwise I might become suicidal with despair. Also, mistakes are just learning experiences… and things have turned out ok. I’m incredibly good at rationalizing.

One mistake I vividly remember is going so frugal to pay off DH’s student loan debt that I lost my ability to eat red meat. Then I ate a steak. Don’t do that. It’s ok though because I gradually weaned my way back: super processed roast beef, less processed roast beef, hamburger, steak. If we ever have to go super-frugal again, I will make red meat once every couple of weeks a priority.

Oh, another mistake was doing something that caused my college earnings to be locked up for several months before they got transferred to my new bank. I should have been more organized and closed out my account before leaving my College state. (At the time, MA didn’t allow branch banking, so we couldn’t just keep our big banks.) Some of that money could have paid for a pound of hamburger.

When a mattress salesman says this mattress is so high quality, it will last 15 years instead of 10, don’t believe him. We still would have bought the mattress though. I do wonder if we could have negotiated the price down.

When a mattress is uncomfortable, it is time to buy a new mattress, no matter what. Getting enough sleep is incredibly important.

If you only have four pairs of shoes, start shopping for a new pair of shoes BEFORE you need them. Chances are you won’t be able to find anything in your size when you hit emergency times.


Kris January 26, 2011 at 3:19 pm

Nicole, those are some really good ‘life lessons’.

I don’t think I could go so frugal as to cut out red meat. I could cut out lamb, veal, and a bunch of other meats I don’t like though! I love a good steak!

You are right, a good night’s sleep is the best, and so important! I love our mattress, and it is huge! We are not big people, but I do love our king sized mattress.


The Biz of Life January 26, 2011 at 9:53 am

Mine would be:

1) Cutting too many classes in college.

2) Buying fancy new sports cars when I was single.

3) Not buying Berkshire Hathaway stock when I first heard of Warren Buffett.

4) Not buying “Bogle’s folly” when I first heard of it.

5) Not investing more when I was younger for the compounding.


Kris January 26, 2011 at 3:26 pm

Biz, I too cut too many classes in college. They were huge lecture halls and I was just so bored! However, I probably would have been better off attending more.

I wish I had more money to invest when I was younger! 🙂

Out of curiosity, what was the price of a share of BH when you first heard of it?


The Biz of Life January 26, 2011 at 4:21 pm

I believe BRK.A was around $3000 at the time…. talk about a missed opportunity.


Kris January 26, 2011 at 4:24 pm

Oh boy, that is tough…I have no idea it where it was when I first heard of BH, but I still should have invested. Lets not think about it!


First Gen American January 26, 2011 at 10:00 am

My biggest financial mistake and it’s a six figure mistake was to have almost all my retirement savings in company stock. I didn’t follow the “don’t have all your eggs in one basket rule” mostly because I didn’t have a non-company stock option in the plan until very late in the game. I think that alone is big enough to merit counting as 5 smaller mistakes.

The other thing I did was I way overpaid for a mattress. Never go mattress shopping when you are in agony and 8.5 months pregnant. Pain trumps all logic and reason.


First Gen American January 26, 2011 at 10:05 am

Oh, I have one more biggie. Once my company was sold and I could transfer my 401K into an individual plan, I hired an investment broker to diversify and manage my assets for me. I paid him thousands of dollars in commission while I watched my portfolio evaporate. He kept waiting for the right time to sell and never diversified my holdings. It took me 6 months to fire him. I also hired him right before my second child was born. Our life was chaos and I knew what I wanted to do with my investments but I just didn’t have the time to manage it myself.


Kris January 26, 2011 at 3:32 pm

First Gen – what an awful string of bad luck! First the ‘Enron-type’ scenario, and then you find someone that should be able to help you and they make things a million times worse. I am so sorry – and I know you are not the only one out there who has gotten bad advice, or not been treated properly by an advisor.


First Gen American January 27, 2011 at 5:35 am

At least I learned from it. I now have a diversified portfolio that I’m very happy with. It’s done pretty well and bounced back quite a bit. I’ve been trying to recoup my losses through more savings. It’ll all work out and luckily I’m still young enough that the savings I lost can be rebuilt. I really enjoyed reading this article and reading everyone’s comments to it.


Heather January 26, 2011 at 11:10 am

1-Buying new cars. Several of them in a row in not a long period of time.

2-Moving in with a roommate who I had a bad feeling about … and then moving out 6 months early but still paying my half of the rent.

3-Paying a year of out-of-state-tuition for grad school instead of moving, living for a year, then going to grad school.

4-Buying a house during the housing boom.

5-Not contributing to retirement accounts until I was 31.


Kris January 26, 2011 at 3:34 pm

Heather- if you had an awful roommate, you pretty much didn’t have a choice unfortunately. It is hard to just go with your gut when you don’t have much to base it on initially.

Regarding grad school, at least it is done with, right?

Nobody knew the housing boom was a boom until the bubble burst!


Heather January 26, 2011 at 11:48 pm

Grad school is long since done, but the loan is still here… :/ I’d rather still be in school than still paying for it 🙂

And, for the record, I don’t think buying new cars is inherently a financial mistake, but buying three new cars in just a few years is a huge mistake … or series of mistakes.


Linda January 26, 2011 at 12:01 pm

Hmmm…many of things I think of as classic mistakes have turned out to have a silver lining.

A mistake I made was not establishing robust savings goals and plans until very recently. Silver lining: I had nearly all of my cash assets wiped out during my divorce settlement, anyway, so knowing I could have saved more isn’t such a big deal.

A mistake I made was carrying any amount of credit card debt for a few years.

I’ve bought a few new cars, but I don’t really consider that as a big financial mistake. Sometimes, it’s important to get a new, reliable vehicle.


Kris January 26, 2011 at 3:35 pm

Linda, I like your Silver Linings! Do you think starting from scratch forced you to create financial goals and such, or would it have happened regardless?


Linda January 26, 2011 at 5:32 pm

Because of what happened I was able to create my own, very personal financial goals. During my marriage we both benefitted from the dual income stream, and neither of us were inclined to spend a lot of money. As a result we saved a lot. In cash. In just a basic money market account.

Everytime I tried to have a discussion with my ex about goals for our savings or doing something more than just letting it sit in a low interest account, he didn’t want to talk. Now that I have control of my own money, I can set goals for my savings and make it work for me.

Incidentally, he continued his own lazy money management habits after the divorce. A few months after it was finalized he was telling me that he made a huge mistake in filling out an online payment for a doctor’s bill: he accidentally paid the doc $22,000 instead of $220. Yeah, that’s right; he had over $20K in his basic, big-bank checking account. Silly man.


Kris January 26, 2011 at 11:01 pm

If I paid 20k extra on a bill, the check would sure bounce mighty high!!

One good thing is that at least your investment was protected from downturns in its nice, safe, money market nest.


MoneyCone January 26, 2011 at 12:20 pm

Not contributing to an IRA and 401K as soon as I had my first job!


Kris January 26, 2011 at 3:36 pm

MoneyCone, your mistake is about the only thing I did right! 🙂


retirebyforty January 26, 2011 at 1:03 pm

Mistakes?? I am so forgetful these days and old mistakes just slips away.

1) Should have learned more and had more fun in college instead of focusing on passing the tests. I would have enjoyed the classes more now that I’m older.
2) Had too much money in company stock when I first started investing. I lost some money during the dot com bubble. Probably my worst investment mistake.

I’ll come back later to put more down. 🙂


Kris January 26, 2011 at 3:38 pm

RB40- I am glad you don’t have any recent mistakes!
Had you had too much fun in college, you would have regretted not studying more. You can never win that one.

I think just about everyone lost money in the dot com bubble. Regarding the condo purchase, that is where you live now, right? What don’t you like about it?


retirebyforty January 26, 2011 at 11:25 pm

We love living here. I just don’t like paying the mortgage. 🙂
It’s not underwater, but it did lost a lot of value. I guess like everyone else. We should have just waited a few years and could have purchase a much nicer place for the same price.


retirebyforty January 26, 2011 at 1:25 pm

Purchasing a condo in 2007 wasn’t the smartest move on my part.


Lindy Mint January 26, 2011 at 1:56 pm

1. Charging it up post college without ever thinking about how hard it would be to pay it off.
2. Getting my post college credit debt down to zero, then repeating #1 all over again.
3. Buying a house in 2005 with a 5 year interest only loan.
4. Putting all of my 401k into the safe money market fund after the crash of 2008 and not reaping the benefits of the gains of 2009.
5. I can’t decide on #5, so I’ll just leave it at 4.

Fun game! I hope I’ve learned my lessons.


Kris January 26, 2011 at 3:40 pm

Lindy, it is great you could only come up with 4!

At least you didn’t charge up the cards again after the second time. I knew someone that took out a loan to consolidate cards, but didn’t cut up the cards and charged them all up again. Very hard lessons to learn.

Market timing is tough. I just rode the last bump out because I knew I wouldn’t need the money. However, it could have gone the other way and continued to drop and you would have had no regrets, and I would have listed that as my regret! You just never know.


krantcents January 26, 2011 at 2:23 pm

I make mistakes all the time! The key is doing more things right than wrong. The only time you don’t make mistakes is when you are doing nothing! Learn from your mistakes so you don’t repeat them.


Kris January 26, 2011 at 3:41 pm

Krant – I agree, the key is to not repeat the mistakes, and to pay attention to them when they are happening. I think some people don’t even see their mistakes, so the same thing happens over and over…


Money Reasons January 26, 2011 at 3:55 pm

Hmmm, okay here I go:

1.) When I was 16 or 17, I bought $200 dollars worth of New York Seltzer stock (pink slip I believe, OTC stock by another name), that company is now gone along with my money. While $200 doesn’t seem like a lot today, to a teenager it was.

2.) Paid for a Gym membership a year in advance (for the discount) that was too far from my house. I went twice, but it was too far. That was money that got sucked down the drain (that too was around $200).

3.) Bought too cheap of a lawnmower (again $200). While it lasted over 10 years, I think if I had a high quality one it would still be with me today. Plus I put a lot of time fixing the cheap lawnmower…

4.) My house is a little to small (only 2,100 sq ft), and my yard is way to small (1/4 of an acre).

5.) I didn’t buy a cheap house (cost around $20,000) as an investment in a neighborhood close by. This would have been a cheap way to get into the real estate market as a landlord or house flipper. Sometimes financial mistakes are the ways that we don’t spend money…

Well there’s my list, not horrible but bothering to me all the same!


Deidre @ TransFormX January 26, 2011 at 4:38 pm

Oh, boy! Only 5? LOL 🙂

Ok, here goes:

1. Paid my ex’s student loans off when I was married to him & he left me with a mountain of debt when we divorced. I should have kept the money!!

2. I borrowed $$ off of a life insurance policy to buy a car when I was 22 and pregnant with my son. At the time the agent told me the policy was no longer in force and I never heard anything more from the Life Insurance company…Unfortunately it was still in force and lapsed due to non payment in 2009. I was notified of this just this month!! Now I have to pay taxes on the money I borrowed 20+ years ago! Amazing! Taxes = 345.00. I would have preferred to have the nice Life Insurance policy!!!

3. Borrowed too much on student loans for college and am still paying on them.

4. Paid too long on a storage unit after I got divorced. The total cost of the storage completely out-weighed the value of the items inside.

Number 2 still bothers me. I really would have liked the option of paying back the loan and having the policy in effect – especially since the policy value was enough to keep paying the premiums for 20 years!!!! I had no idea that it was still in force and if I had gotten notices I definately would have kept the policy!


Kris January 26, 2011 at 10:59 pm

Deidre, hindsight is always 20/20 unfortunately. You never would have wasted time on the ex, let alone given him money if you would have known it would end in divorce. (Well except you got kids out of it.)

I would be furious about the insurance situation too, and not even sure that I understand it!

You will feel great when those loans are paid off. Imagine the alternative, not having an education!


Deidre @ TransFormX January 26, 2011 at 11:45 pm

@ insurance situation….They consider the 4K loan I took out on it as ‘income’ since the loan amount was never paid back. Therefore I have to pay taxes on the ‘income’. The taxes don’t bother me, it is what it is. What annoys me is that the policy was obviously a good investment since it stood the test of time and kept accruing income which paid the premiums … for 20 years!! Sheesh! What was the growth rate on that I wonder! I certainly would have (and could have) paid back the loan amount and kept the policy had I know it was still out there.

@ education …yea thats why I grit my teeth and write the check every month LOL 😉


Jeff January 26, 2011 at 9:51 pm

1. Overdrafted on my debit card..multiple times.
2. Enjoyed gambling tooooo much.


Kris January 26, 2011 at 11:02 pm

Jeff, I am sure the gambling thing can be a real bummer. I am sure there are up days, but also a lot of down days. I am glad you no longer enjoy it so much!


Barb Friedberg January 26, 2011 at 10:51 pm

As usual, a very engaging article.
1. Bought a brand new home after moving from CA. to Indiana. And then moving 2 years later. Had a loss.
2. Countless investing losses, but I look at those at a normal part of being a portfolio manager. Everyone has losses. Fortunately, my gains FAR outweigh the losses.

Gotta run, but believe me, there are more 😉


Kris January 26, 2011 at 11:05 pm

Barb, thank you!

It is very hard to predict the housing market, especially if you don’t know how long you will be staying in a house.

I have had my share of investment losses too, goes with the territory I guess. (Or so I tell myself.)


Roshawn @ Watson Inc January 26, 2011 at 10:52 pm

Financing a car, placing medical bills on a credit card, not working full-time to clean up debt when I finished with 2nd degree.


Kris January 26, 2011 at 11:06 pm

Shawn- did you even have an alternative than to put medical bills on a credit card though? Sometimes you just don’t have a choice!

I could have worked a second job after my MBA, but I didn’t. Gotta enjoy life some too. (I am a great rationalizer!)


Courtney@OnlineLoansWithBadCredit February 7, 2011 at 4:30 am

Great post!
Financial management isn’t supposed to be hard, but plenty of individuals struggle with money issues every single day.
People are supposed to make money and not spend it too quickly or on the wrong things. Most forms of debt should be avoided and saving for the future should be a regular and highly disciplined habit. Unfortunately, there is a large gap between what people should do and what they actually do with their money. Today people are more mired in debt than ever before, and for many individuals the prospect of purchasing large items or retiring someday is simply not going to happen unless there is a drastic change in habits.


Domingo February 17, 2011 at 3:21 am

I found that it was easier to think of things I ‘did’ instead of things I ‘never did’. All of my financial mistakes I have made during my life came flashing across my mind, and I was having a harder time coming up with things I ‘never’ did. Had the game had a qualifier of “Never I ever did ‘this’ after the age of 30?, I would have been fine…


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