What’s your Biggest Money Mistake?

23 Mar What’s your Biggest Money Mistake?

We’re gathering a list of the biggest money mistakes people make. We’d like to do a top ten list of biggest money mistakes for a podcast episode. Have you done stupid with some zeros attached? Often these are opportunities to learn but they’re very painful lessons.

Please share your learning experiences with us so we can laugh together at the past and learn together for the future. Chances are there’s someone else out there who is about to make the same mistake. With your help they can avoid those mistakes.

I’ll share one of mine: When I was in college I fell for one of those members-only buying clubs. It sounded good at the time: join the club and save tons on future purchases of pretty much anything. If you found something cheaper than the price they offered, they would match the price and pay you the difference so you saved double. Well I bought the multi-year membership at somewhere close to $1,000 and financed it at (only 1.5% per month) 18%! Then I never bought more than a handful of items through the membership. I think I saved a total of $50 or so for the $1,000 I paid, just to have the privilege of saving money.

My parents were really mad at the time and tried to tell me it was a stupid idea but as a young, know-it-all college kid you know I wasn’t going to listen to them. I was bound and determined to prove them wrong with all the money I was going to save. Well, mom and dad I have to (grudgingly) admit you were right.

Today I know I can save much more by having a budget, watching for deals, and paying with cash. Cash is king and it goes a really long way in negotiating bargains. If negotiating isn’t your style, simply watching for deals can save you tons instead of buying at retail price.

So now that I’ve shared mine, I’ll open it up to the rest of you: What are some of the biggest mistakes you’ve made with money, and what are the lessons learned from them? I have plenty more but I want to hear yours first! (Note: I just might share your money mistake on the podcast in an effort to help other people).

  • Teripostell827
    Posted at 16:57h, 24 March

    There have been many lessons over my life time…here are just a few that jump to the head of the line.
    1. Buying exercise equipment/tapes from infomercials. Over the years, I’ve purchased so many different pieces thinking this looks so cool, it’s easy to use, blah blah blah. The reality is that unless one is already working out, the equipment probably won’t work miracles for you. It’s about developing the habit of working out that matters; not the equipment you use to work out. I’ve found that the best piece of equipment is my walking shoes and the dog wagging his tail saying “come on Mom, let’s go for a walk”.
    2. Buying dvd’s (at full price) …if there’s a really great movie, I may watch it a few times but after that, how many times are you likely to pull out the dvd and watch it again?? Besides, if it’s really good, it’ll end up on a movie channel so I can catch reruns. I have so many dvd’s sitting on the shelf now because I got caught up on the hype of what a great movie it was and it was a good movie but I really didn’t need to have a copy of it collecting dust at home.
    3. When I was younger, thinking that I needed to have a pair of shoes for each outfit I bought. When my husband and I were moving into our first home, I remember packing up my shoes. There were several totes of them. Of course, I got some teasing from the guys about this. It turned out that there were just over 100 pairs of shoes. It did take me a few years to collect them (maybe 2 or 3 years) but that’s a lot of money just on shoes not to mention the clothes/accessories that went with each outfit. And, if that was’t enough, I had body lotions/perfumes that went with the outfits however this was based on the primary colors…for red clothes (it didn’t matter on the shade of red) I used perfume/lotions that were in red bottles, blue clothes had blue perfume/lotion bottles, etc. I was the posterchild for the “girly girly”. My bedroom looked like a department store…clothes, shoes, jewelry, makeup, perfume. Now, I think back to all the money I spent on that…had I just put it away and let it accrue some interest…my finances would be so different right now. Oh well…live and learn:)

    • Anonymous
      Posted at 17:14h, 24 March

      Great lessons learned Teri. Thanks so much for sharing them!

  • Jonathan White
    Posted at 13:28h, 21 May

    Matt, for me this is pretty easy. My biggest money mistake was the purchase of the condo that my wife and I currently live in. Every mistake that you could make, I made.  First, I got house fever and just bought a house because “real estate is a good investment.” I did little research, only looked at three homes, and put a bid on the first one I liked.  Then, I bought at the top of the market and didn’t really negotiate all that well either so I really overpaid for the house. Finally, to make matters worse, I put zero down on the house and I didn’t even know what my monthly mortgage payment was going to be! I just thought I would figure it out, haha.  Thankfully I am able to afford the payment and I love the condo, but the impulse purchases is still costing me today.  The value has dropped anywhere between 25-33% from when I first bought it and we are looking to move in the next year or so with the birth of our first child in July.  Thankfully we have been paying extra to get it paid off sooner and build equity but if we had just been making just the minimum payments, we would be anywhere from 20-25K underwater!  So never ever buy a house without doing your research first.  Thanks for letting me relive my blunders Matt! 🙂 

    • Anonymous
      Posted at 02:03h, 24 May

      Thanks for sharing, Jon. Real estate mistakes have a tendency to magnify our blunders and add a lot of zeros to the end of them! You’re right – taking the time to do the research can save a ton of money!

  • Bill Thompson
    Posted at 14:32h, 24 May

    I made a whopper in January of 2004 when I (and a friend of mine) “rescued” someone from foreclosure by purchasing the house right before the sheriff’s sale convened.  I did this against the “gut feeling” of my spouse who I assured I had this “all figured out and there was no way we could get burned.”  We ended up having to force this family out of the house (which was bigger and more expensive than my own)because they couldn’t pay rent and then had to spend thousands of dollars to fix it up so we could sell it for $27,000 less than what we bought it for!  Not to mention the mortage payments we made for almost a whole year!  Is there something called an imbecile tax?  There were so many mistakes at so many levels.  I (we) did seek wise counsel and we ignored the input of our spouses because we were the “experts.”  Never, EVER expose your own finacial health to “rescue” someone else from bad financial behavior.  Teach them, support them, pray for them and even provide for them.  Do not bail them out.  This was my financial come to Jesus moment and the catalyst to my becoming a financial coach.  Where’s my t-shirt!?

    • Anonymous
      Posted at 14:45h, 24 May

      Wow, Bill. that is a whopper! Thanks so much for sharing.