Stupid Money Mistakes I’ve Made – What I Learned From Them
I’d love to parade myself around as a flawless financial knight, but wow…that couldn’t be further from the truth. Authenticity and honesty would be virtues that I think a knight would respect though. So I am here to be honest, I’ve made some stupid money mistakes.
These decisions made by my earlier-self have helped make my trip to the starting line of even starting to pursue financial independence bumpier than needed.
These aren’t the biggest monetary sum mistakes I’ve made or the major life decisions like career field of choice or location of living that might’ve had a bigger impact on my finances.
More so examples of poor money management and financial illiteracy.
I am lucky enough to have never made a decision or mistake so glaring that it totally crippled me or the relationships I have. No foreclosed homes, white collar crimes or major strain put on my supporting family members. Just plain old stupid money mistakes and decision making.
Thankfully with time comes reflection and self-awareness, so I’ve been able to learn from these mistakes I’ve made with money.
Used My Credit Card For Tuition
In the final semester of my undergraduate degree I thought it would be a good idea to not take any additional student loans. Sounds like a smart, forward thinking strategy. My genius alternative? Paying for everything on my credit card.
Despite having a limited part-time job to barely be paying the minimums and an already outstanding balance, I felt this was the right path.
Aighta boy Scott!
It was only a few courses to complete my final credits, roughly $5,200 with tuition and textbooks, so it wasn’t an ungodly total sum. The compounding negative effective this had on my then and future financial situation was the real sore spot. I was now paying an interest rate of 19.99% on that stupid money mistake (not to mention the other purchases I’d made on it before, during and following that timeframe).
After graduating, it took me almost two years to pay off my full credit card balance. Only then could I start tackling my student loan debt.
What I Learned:
A credit card is not an “income stretcher” or device to make large scale purchases you can’t afford with the liquid cash you currently have available. Whether that’s tuition, vacations, electronics, etc.
The interest rates will cripple you.
Proper management of a credit card can help you build credit, earn travel rewards or cash back, have purchase flexibility and so much more if wielded properly. The one hard rule I implemented since those younger years: no more outstanding balances, that line shows $0 every month.
Stopped Checking My Credit Card Balance
When I was at my absolute lowest state financially, I had stopped checking my credit card account statements. I had set-up automatic payments to always hit the minimum needed but that was it for the most part outside of throwing some extra payments periodically.
Every time I saw that balance, it just made my internal disdain burn brighter. It got so bad at one point that I didn’t even realize I had gone over my limit by almost 30%.
This stupid money mistake of ignorance would once again cost me sums of money in interest. The outstanding balance would continue to serve as a ball and chain around my finances. Going over my credit card limit was part of my personal finance aha moment that helped drive me on the path I am pursuing now.
I knew it was time to wake up, grow up and take control.
What I Learned:
Again since those younger years…no matter how bleak your financial situation and hardships are, you have to stay on top of your finances. This applies to not only credit cards but budgets, saving goals, retirement or any other area of money.
While financial automation is amazing, an audit of all your accounts and activity is definitely a recommended tactic to ensure you’re staying on track. Especially during the hard times.
Didn’t Ask For More Money Advice
Even though I had a solid foundation of relationships I could leverage for advice in my early 20’s, I neglected to do so. My parents, extended family, family friends and coworkers had all been through similar financial situations that I was currently experiencing.
I’ve always been a pretty independent person but instead of seeking advice or guidance, I closed the door. Whether that’s rooted in shame, embarrassment or misplaced pride, it was the incorrect tactic.
It was another stupid money mistake.
My situation wasn’t really that bad and each of these people would have been more than happy to provide advice or moral support. A tip on credit cards, saving, lifestyle inflation, student loan repayment, saying “no”, etc.
I didn’t even turn to my good friend Google for advice until only a few years ago.
What I Learned:
The power of people should never be overlooked. All the problems or decisions in your life have been faced by countless others before you. From money management to retirement planning, just a few questions can help get you pointed in the right direction.
Whether through the Internet or your personal life, seek out knowledge and advice.
Ask, listen and learn.
Got Tattoos After My Walkabout
This one isn’t about the dollar value that’s stupid, it’s just the clear neglect for money management and financial foresight. Ha!
Another stupid money mistake.
After getting back from a 3-month European backpacking adventure, I was feeling spiritually inspired. The trip was absolutely amazing and changed my life forever. I’d perfectly planned the backpacking escapade down to the dollar to ensure we could stretch it to 3 months, so I had no money to my name upon returning.
To celebrate the spiritual and intellectual leaps I’d made during the walkabout, I decided the best thing to do was get tattoos of philosophical quotes and symbols tattooed on my torso.
For the record, I have nothing against tattoos and would never judge another human for having them.
I however spent close to $900 on my credit card within days of being back in Canada. There was only a month and a half of income earning potential left that summer before going back to university in September. Instead of being smart about my finances and starting what was left of my summer job ASAP, I was getting tattoos and credit card debt.
This was just another money decision that helped lay the framework for my poor financial situation during and after university.
What I Learned:
Spontaneous spending has it’s time and place in your life but that needs to be mitigated when you aren’t in a position to do so.
Spend on what makes you happy and gives you the most value, cut back on the rest. Take a little extra time to analyze larger purchases before just springing ahead.
Delayed Hitting The Full Company Contribution Match %
I am lucky enough to work full-time at an organization that offers a contribution match into a retirement plan (RPP). Sounds great, right? No stupid money mistakes to be made here.
Unfortunately, when I first started working here I was still in my financial illiteracy phase.
I was so put off by my credit card and student loan debt that anything related to money just caused a wave of feeling overwhelmed and daunted.
How could I afford changing my contribution to the max % when I can’t even get out of credit card debt?
And look at that student loan balance.
You fool! Maybe stop spending money on electronics, bar tabs and entertainment. That might’ve helped expedite your debt repayment and caused you to skip your silly decision to not increase that contribution to the max % immediately on day-one.
And oh, you might not have cost yourself thousands of free dollars in retirement savings. Not to mention the value those dollars will actually be when you’re ready to access them in retirement.
What I Learned:
No matter the situation, take your finances serious and properly analyze the decisions. Even if you aren’t in the best position, you still need to make the most efficient and effective decision.
What is the EV of option A versus option B? Run the numbers and get quantitative evidence to support your money decisions.
Especially when it comes to retirement planning.
I’d Seen The Light & Couldn’t Stop Talking About Money
This stupid money mistake doesn’t involve a credit card or poor money management skills.
Just my big mouth.
After seeing the light and starting to get my finances in order, I couldn’t shut up about it. My girlfriend, family members, friends and coworkers all subject to an ear-beating.
- “Have you heard these podcasts?”
- “You have to check out these blogs.” … reply from some: “Get Rich Mustache Money, what the heck is that?!”
- “Low cost index funds man, I am telling you.”
- “I Will Teach You To Be Rich, I will let you borrow it but you have to finish it within 10 days. That’s the deal.”
- “That rounds of beers will be worth like half a year of retirement in 40 years from now.”
- “Have you read that blog post yet that I sent you?”
Similar to anyone who has started a diet or new workout plan, they love to talk about it. It’s just general human nature to want to discuss whatever is exciting and engaging you currently in life. And as social beings, we want to tell the people we interact with about it.
My mistake was being too preachy and over the top about it to people who weren’t in the same mindset as I was now. Not everyone needs to agree with your ideas, and not everyone needs to hear them.
Over and over again.
What I Learned:
You can introduce your friends and family to the topics of personal finance and financial independence. The best practice would be to casually bring it up, seed them with a few ideas or suggested pieces of content to check out…then let it be.
Never judge anyone, preach constantly or take a holier than thou approach with the decisions others are making with their money. When the time is right, they will come for help or connect with you about some of those books or podcasts you’d mentioned before.
You can’t force it, and shouldn’t try to.
4 Other Stupid Money Mistakes In My Younger Purchasing Years
Here are a few other examples of my consumerism as a youngster.
- Spent $3,000+ building a 350+ DVD collection from age 16 – 22
- Various fish tanks and tropical fish must’ve cost me well over $2,000 when I was 18 – 22
- Bought $937 worth of skateboard shoes in one online order when I was 19
- Won $1,197 in Fantasy Basketball and spent it on a 55” TV and Xbox One S
Not to mention the all-inclusive trips in the Caribbean, countless nights out and other rampant spending sprees.
I was young and finding my way through life. Plus some of the money I spent a little recklessly also provided me with amazing experiences, adventures and memories that will be with me for the rest of my life.
Of course these stupid money mistakes have undoubtedly set back my financial situation. The accumulated total of the money spent, interest accrued and opportunity cost would be well into the mid 5-figure range.
I can’t change the past and I am now able to use these learning experiences as guidance.
“The only source of knowledge is experience” – Albert Einstein.
Be smart with your money, never stop learning and keep growing that wealth!
Do you have any stupid money mistakes to share? Let me know in the comments below.
Here are some other posts to help you take control of your money and life:
- 15 Smart Money Moves You Can (Easily) Make This Month
- The Personal Finance Resources And Content That Saved My Life
- 35+ Rewarding Side Hustles Anyone Can Do To Earn More Money
- Building Good Money Habits – Make Your Own Money Momentum
- The Best Personal Finance Podcasts – 30+ Money, Investing And Side Hustle Shows
- 25 Books On Personal And Professional Development
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