What are the biggest financial mistakes you have made?

[queenofthehivemomof5]

I think most of us have made some along the way...learning from the mistakes of others can be helpful I think. I wish that they taught some basic finance stuff to kids in school... I have a teen on the cusp of adulthood and find myself having some good talks with her about what interest rates are, saving money, credit cards, etc and alot of our conversations have to do with the mistakes we have made.

To start off my confession I will start with a little history...I was an imancipated minor at the age of 16 and out on my own so to speak at an early age. Had checking account and credit cards when I was 16. And no one ever told me or taught me how to manage these things properly.

So my financial mistakes are:

• writting bad checks and getting caught up in the bank fees and not being able to pay my bills so writting another bad check and going through a vicious cycle of not having enough money to pay my bills because I was hit with high bank fees.
• Not paying on my credit cards...yeah no one ever told me you had to pay those back. I used them like it was free money!
• Doing payday loans...its another vicious cycle of borrowing money at what should be an illegal amount of high interest to pay your bills, you get paid and they depost your check, then you find that because of the fees you don't have the money again to pay your bills or buy groceries and so you need another payday loan.
• Doing Rent-to-own...high interest rate end up with a small manageable monthy payment but when all is said and done you end up paying 3-4 times the value of the items worth. Could have bought a used TV and saved gobs of money. Not smart on our part.
• Wanting to fit in with the "Joneses" and get a nice car for once after years of driving old beaters. Ended up financing a used mini van (it was nice) at 19% interest. Then DH put every extra warrenty they offered him (interior warrenty, exterior warrenty, paint warrenty, fabric protection,...you name it he said OK to it while the only one that was worth it for us was the extended engine/transmission warrenty cause we needed the tranny replaced 2 times). Our monthly payments were more than our rent...and when DH was injured at work and not working...it was repoed (best thing that happened when all was said and done) but it hurt our credit.
• Not saving...we were always stuck in this rut of not having enough money to pay the bills (due to bank fees or high interest rates on car/payday loans) if we had been smarter that money could have been saved. We are just now at the first time in our lives where we are paying ourselves first and saving money.

Lessons learned for us. Don't spend money you don't have. We now save money for the things we want. DH and I looked at a used SUV yesterday, and it was a good deal, he wanted to go to the bank and get a loan and I said no-way Jose...we will get a new car when our tax return comes and use that with some of our savings and just pay cash. If the car is still for sale (doubt it) it was meant to be...if not it was not meant to be for us.

We are still working dilligently on fixing our credit and saving money to get to the goals we have for our family. And I feel we are no longer making the same mistakes. We dont have any credit cards...but will soon I am sure and we will need to develop new skills on how to manage that.

So what mistakes have you made along the way?

[hotcouponmama]

Bought a restaurant for $79K when I was 23, and tied both of my houses to it as collateral. Lesson learned - never buy someone else's blue sky! If you want to own a business, start your own from scratch or buy an established franchise, although that doesn't guarantee success. But at least if you skip buying someone else's mess, you won't get stuck with a restaurant that was in a building that wasn't properly vented to be a restaurnant, hence a $700 air conditioning bill a month (among other things!!!)

[mom2lucas]

credit cards were our biggie when we first got married. we're still trying to clear that debt three years later. I had always paid mine off, and DH came with alot of credit card debit, which had a high interest rate, and somehow my cards started to not get paid off each month. It just snowballed from there. We don't have a ton of cc debt, but we have student loans, hospital bills that we are still paying off, and two car loans. It all adds up.

[jenjacobs]

Buying a fixer upper - we bought a 1929 bungalow in 2005 - DH and I spent hundreds of hours and tens of thousands of dollars of this house. He got a good job offer in NC in July 2007 but of course the market had crashed in FL. We ended up selling at break even point (covered what we had put into it and realtor fees - barely) but now we have very little in liquid cash to put into our next house. I know you can do different things to avoid paying PMI etc but I'd like more liquid cash in our bank account - everything is in investments.

[kdphi_uh]

We are blessed to be finanncially comfortable now but my biggest finnancial mistake was credit cards when I was in college. No one ever tell me that you have to make more than the minimum payment! LOL.

[BzyBee DH]

Driving new cars....even with the employee discount and the "great" deals......

[berlinsmommy]

Buying DH's truck on impulse. He was right out of college and our household income had basically quadrupled overnight. I sort of "fell into" (as in dumb luck, not smarts), taking dealer financing to get more incentives, then turning around and refinancing at literally half the rate, so I did okay there, but I'm still pretty sure we way overpaid. We did no research, we just went out and bought it. It was a 2000 and we got it in July 2000. I'm sure had we waited (our other car was fine, it was just old and boring, but it ran), researched pricing and dealer incentives, shopped loans, and saved up and put a load of money down we probably would have done a lot better. The truck is 7 yrs old and we still have it and its a good truck, but had I done my homework and been patient we probably could have saved ~$5,000 or so.

Locking the rate on the majority of DH's student loans. I guess no one knew 9/11 was going to happen but we bought the house in 2000 and the lender wanted us to lock our rate so they could figure a fixed payment. We locked at 6.875%. ARGH!!! At least by not locking his Sallie Mae loans, I was later able to "blend" 2 rates, consolidate, and find a lender with fab incentives, but it is still in the 5's. My BIL graduated the same time as DH and didn't lock until later and his loans are at 1.9%.

[Cin42382]

Not saving and Credit CARDS!!! AHHH lol. When I started college I had a few credit cards. But when I turned 19 I received a large settlement from an injury when I was younger. I swore up and down I would not blow the money, but I quit my job, blew through the money (about 15-20K) in 6 -12 months, and ran up all my credit cards. Being that i had no job I stopped paying the cards.

When I finally got a job I called and they set up a "payment schedule" with me. EVEN WORSE. They had me paying for example 3 payments of $100. However, they never stopped the over limit charges, etc. So for every payment I made, my balance went up by about $50 LOL.

Now I have all of those CC's gone and paid off, and very little CC debt, maybe $1000 if that. I will never be that stupid again!

[Nimbus254]

My mom and stepfather expected me to go to college, and I put away all my part-time job money to help pay for it. When my first year of college started, my stepfather refused to pay the bills came in. My financial aid package was based upon his income (Mom didn't work) and my income, and what we could both afford to pay, and with him refusing to pay anything, my savings account was used up by the end of my first semester.

I moved in with my boyfriend's family later that year, and went through a huge hassle with the college, trying to get them to understand that my stepfather wouldn't pay and since I wasn't even living there anymore, could they please just base my aid on my income?!

While they were trying to straighten all of that out, I got a credit card and used it to buy books and pay for my tuition. Eventually they declared me an "independent student" and fixed my financial aid, but I had already built up quite a bit of debt by then.

After my BF and I graduated, we bought an old house that needed a lot of work. We did as much work as we could, and stopped when we ran out of money. Then we wanted to get married, and none of our parents could help us out financially, so we ended up charging $3000 on everything we needed for the wedding.

Luckily, my mother did teach me about interest rates and paying more than the minimum on your credit cards, and the importance of maintaining your credit score, etc. when I was a pre-teen. So even though DH and I had quite a bit of debt built up, we've never paid a single bill late.

Earlier this year, we had our house appraised, and its value had increased quite a bit, so we got a home equity loan and paid off all of our debt (with the exception of one of DH's student loans), and also completely remodeled our bathroom, got all new replacement windows and will get the house brick-pointed in the spring.

It's great being rid of all of that "bad" debt, and our home equity loan payment is much much less than all of those different credit card payments. I will never carry a balance on a credit card ever again!!!

The one mistake I still make now is not saving enough. It seems like whenever we have extra money, there's always something that pops up, like car repairs or something, and then the money's gone again. But I guess I should be thankful that I don't have to charge that stuff!

[MrsPinecone]

After college, I ran up $7000 in credit card debt and then married an idiot and moved to England. He was a financial black hole, and I had to defer student loans and was late on many a credit card payment.

It took years to clean up my credit rating and pay off the credit card and student loans.

I know that there are a lot of people who love their credit cards and reward programs, but I will never have a credit card again if I can help it.

Our policy is "if we can't pay cash for it, we can't afford it." And it works very well.