What are the biggest financial mistakes you have made?

Discussion in 'Hot Entrepreneurs: Build Wealth & Share Links' started by queenofthehivemomof5, Nov 28, 2007.

  1. queenofthehivemomof5

    queenofthehivemomof5 Admin Hottie Trader Group

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    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?
     
  2. hotcouponmama

    hotcouponmama Admin Hottie

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    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!!!)
     
  3. mom2lucas

    mom2lucas Mod Of The Month June 2009 / Super Swapper Trader Group

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    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.
     
  4. jenjacobs

    jenjacobs Gator Saver Trader Group

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    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.
     
  5. kdphi_uh

    kdphi_uh New Member Trader Group

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    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.
     
  6. BzyBee DH

    BzyBee DH New Member Trader Group

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

    berlinsmommy New Member Trader Group

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    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%.
     
  8. Cin42382

    Cin42382 Guest

    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!
     
  9. Nimbus254

    Nimbus254 New Member Trader Group

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    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. :rolleyes24: 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!
     
  10. MrsPinecone

    MrsPinecone Finder Of Lost Posts Trader Group

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    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.
     
  11. aimeebee

    aimeebee New Member Trader Group

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    When I was in college, I signed up for every credit card offer that came along. Those credit people would sit down in the student union and offer students things like a HUGE bag of M&Ms, free backpacks, a 24 pack of Pepsi, etc to get students to sign up. Well, you all probably know I'm not the type who could pass up a freebie like that. LOL They would tell you to put down the tuition cost as your income for the year, too. (Higher income = higher credit limit) When I got out of college, I had student loans I couldn't afford to pay, plus huge credit card debt. Starting out in the hole like that was a bad way to go. I couldn't afford rent because I owed everybody. I had to work two jobs and still couldn't make ends meet. I ended up doing consumer counseling til I could pay off the cards. I deferred the student loans so many times that I still haven't paid them off and I have been out of college almost 15 years.
     
  12. lanichan

    lanichan New Member Trader Group

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    Then:

    Getting my 1st credit card as a college freshman.

    Yikes.

    Paying only minimum payment thinking I was so good! :rolleyes24: Not realizing that it would of taken me YEARS to pay it off. Finally bit the bullet and begged/pleaded my parents for help. Paid it off, tore up my card, closed the account and generally ran away from C.C. offers. Had to use Mr. lanichan's credit history when buying our first house because by then, my credit history was non-existent.


    Now:

    Buying our current house at the "peak" of the housing boom. I love, love the house and we are planning on staying here a very long time, but seeing all the for sale signs, depreciation of our house/neighborhood makes me wish we were renters.
     
  13. Macaela25

    Macaela25 New Member Trader Group

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    Mismanagement of credit cards while single and in my 20s, as many have said before me.

    I really wish that colleges would require students to sit through a financial class/workshop focusing on credit cards and student loans during orientation, and not allow one credit card company on campus until the class was complete. Colleges receive huge gifts/bonuses/whatever from credit card companies to allow them to solicit students on campus.
     
  14. taxchyk

    taxchyk New Member Trader Group

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    Marrying a jerk while still greiving for my parents. Jerk spent $10k of small inheritance first year. Not a good spouse by any stretch. Buying a fixer-upper house I could barely afford, while working 2 jobs and single parenting 2 kids.
     
    mytuesdays likes this.
  15. arubagirl

    arubagirl New Member Trader Group

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    using credit cards:(
     
  16. justmeagain

    justmeagain New Member Trader Group

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    Buying a house--every mistake that is possible to make in doing so.........I made
    *Lack of down payment
    *Paying PMI
    *Buying too much house
    *Buying at high market time
    *Buying a house that was a total money pit
    *Over-improving for the area (house wasn't even finished when we purchased it)
    *Buying in dumpy area (where all the values of ALL the other house are WAY less)
    *Listening to the realtor
    *Not understanding property taxes (the house that was here had burned down and the taxes were based on that....no clue the taxes would based on selling price--increased payment A LOT)

    Now I'm stuck in a house we will never get all our money out of and I live in Michigan where the whole economy sucks. And as with other places the market is flooded with repos. I could on and on about my housing mistake.

    Other mistakes..........
    Credit cards, not saving, not understanding investments (which I still don't), vehicles, on goes the list...........

    Maybe it would have been easier for me to answer what have I done RIGHT Finacially-- guess my answer would be blank LOL
     
  17. MamaVader

    MamaVader ♕ Prince$$ Bu$h ♕ Staff Member Moderator Trader Group

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    Your answer for what you did right shouldn't be blank. You are here, aren't you? :BigHand:
     
  18. powercat24

    powercat24 New Member Trader Group

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    • 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.
    • 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. 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.

    Ditto here!!!! The payday loans were the worst for us, I think. We have made many a financial mistake since being married. When we first got married, my hubby's credit card limit went up to $5,000 so I went on a little shopping spree to buy furniture (a couch and loveseat set, a dining room set with a cherry finish, etc) and other things we "needed" for our house. Then we financed a bed-$1,000 for a mattress set is TOO much if you ask me! Dumb!! LOL then we traded in a car we had only had for a few months and traded DH's motorcycle for leasing 2 brand new Honda civics...dumb dumb dumb Kicking myself!! The nerve of that salesman..."God is on your side tonight!" aaahhhh We voluntarily surrendered them a month later when DH lost his job. (2 repos on credit=bad) then filed for bankruptcy immediately after so we wouldn't be stuck with repaying $6000 for the repos. THEN: (as if we hadn't learned our lesson...) $2100 for Kirby Vacuum! We don't let sales people in our door any more. :)
    We have not been paying our bills regularly or on time up until this year, I am ashamed to say. It wasn't until we stopped doing the payday loans a few months ago that we are just now finally able to see the light at the end of the tunnel. We also purchased a use minivan a year ago. I still don't think it was the WRONG thing to do at the time because our other van was seriously not safe and we didn't have the money to make it safe for the kids and I. We made NO down payment on the van but traded in our other van for it and we were free to go. I thought it was a great deal until the $369/month that we should have been paying on the van each month went to over draft fees and payday loans. They repo'd the new van about a month ago. I am not upset at not having transportation but I am upset that if we had been responsible we could still have a van right now. I want to tell everyone....I HAVE LEARNED MY LESSON FINALLY!!!!!!!!!
    sorry if this was long, I just had to share:smile::wavehi:
     
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  19. Cheeky

    Cheeky New Member Trader Group

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    not guarding my credit score- borrowing money is smart sometimes, but not when your score is low !!
    :(
     
  20. berlinsmommy

    berlinsmommy New Member Trader Group

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    Don't kick yourself just yet. Keep in mind that first and foremost, a house is a place to live. That's what you bought, a place to live.

    In the short term, it sounds like you didn't do the best you could have. Let me tell you about our house. We bought in 2000. The market was pretty flat but DH and I were straight out of college, didn't know any better, and we fell in love with this house. As far as neighborhood...well, at the time it was non-existent. Our subdivision was the end of the planet, and we were at the edge of the subdivision. Fields on 3 sides, no stores out here, basic roads, etc. We'd tell people where we lived and they'd say, "There are houses out there??" We bought with 0% down (no PMI though, VA loan) at 8%. With fees and stuff, we owed $175k on a $169k house. Also, although we didn't build it, ours is the most upgraded of this plan in the subdivision. Had I needed to sell shortly after, like yours, our neighborhood would not have supported our upgrades.

    Then came 9/11. Even though values were stagnant, we were able to lower our rate from 8% to 6% with no fees (we had no room in the new mortgage for fees, we owed 100% of what the house was worth). Meanwhile, for the next few years, housing values plodded along with 1% and 2% increases. It was a few years before my house was even worth what we owed.

    Then, all of a sudden housing values took off. I remember when the neighbor next door to me (same floorplan, less upgrades) put her house up for sale for $207k. We thought she was nuts! It sold at full list price. Then our area started developing. A huge shopping area (largest in the state) went in a little over a mile away. Roads got built and improved. $400k and $500k houses were being built on those fields. Then we started watching values around us and when the house on the other side of us (similar plan, again, less upgrades) sold for $299k, we were in awe. All of a sudden to sell their houses, our neighbors are scrambling to upgrade their houses, many with upgrades we already had like air conditioning, jetted tubs, and ceramic tile bathrooms.

    Now, we are used to our neighborhood full of BMWs, Volvos, Caddys, etc. and our house is one of the more desirable in our subdivision because of the upgrades and the big lot on the end of a cul-de-sac. So, by both patience and luck, our house has become a pretty smart purchase for our family. Hold on, live in yours, ride out this period of repos and shrinking values, and you never know. Maybe buying that house was the smartest thing you ever did. Only time will tell.
     

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