What is your biggest financial mistake?

[mawmawandlovingit]

I'm sure this had been asked before but it's been 10 years since my "HUGE" financial mistake and I thought it would be interesting to see if anyone else has made big financial mistakes and are willing to admit it .

10 years ago I had this brainstorm that I could open a home decor/gift shop and make tons of money. I was working a full-time job making decent money and we had no debt other than our mortgage. After paying off all debt other than the mortgage I was now in the position to save all of my paycheck. We had also been paying cash for our three children to go to private school. Unfortunately, I was so caught up in paying things off and paying for school, I did not save anything and had no capital to start my business. So there lies the problem......

No one could talk me out of opening this store, I was hell bent once I had it in my mind. DH reluctantly agreed to take out a second mortgage and I had a credit card only for business use. Long story short, I closed the store after 2 years and was $50K in debt. We took out $30K on second mortgage and $20K in CC debt.

It has taken 10 years, but I have finally paid off all of the business debt!! Boy, that was a hard lesson to learn.....I have beat myself up over this for years now, (so please don't bash me ) and I am glad I am finally clear of it.

We have been able to build up a nice 401K, put all the kids through college, AND I am back in the position that I do not "need" my paycheck. So, I guess all was not lost.....I have become financially responsible and our plans are to be able to retire in our mid 50's.

So, anyone else willing to share???

[cael]

Well to date, my biggest financial mistake would be credit cards. I opened two over the course of my undergraduate career to pay for summer and winter classes, and sadly I've had a balance since then. It's gone up and down, but I've been working really hard lately - I have two cards with balances right now, one at $1800 and one at $3100, which is better shape than I've been in for a while. If I use them at all, I use it for something I can pay off by the next billing cycle. I'm going to eventually transfer the smaller balance to the other card, because the interest rate on the lower bal card is almost double, but at this point I'm putting money away for the wedding so I may be making minimum payments for a few months :/

[Deleted]

Not starting my 401K earlier. I worked for a company with a match for 7 years, but only contributed to the 401K for the last 2 years. I had the money, I was just young and not thinking about retirement. That was also during the time the stock market shot up. I made a lot of other mistakes with credit, but that is the only one that bugs me.

[fuel100]

Not one big mistake for me, but my wife and I both like to drive new vehicles. We each get a new one about every three years. We have plenty of money so we don't mind having two car payments. It's our only financial vice.

[Cookies Galore]

Feb 11, 2011 9:14:04 GMT -5 @fuel100 said:

Not one big mistake for me, but my wife and I both like to drive new vehicles. We each get a new one about every three years. We have plenty of money so we don't mind having two car payments. It's our only financial vice.

Dad?!?! I swear, that's exactly what my Dad told me once when I was talking to him about my finance plan. He said his only vice was leasing cars every three years, but he likes driving new cars. But considering the man retired at 56 and has never had difficulty with money, I think he gets free pass.


My biggest financial mistake was listening to anything my Mom said (who is TERRIBLE! with money). Long story short, I'll be CC debt free in May!

[family legacy]

Building a new home right before the housing bubble burst. Had we known, we would've waited 2 years and bought an slightly older home for probably $100,000 less.

[sheilaincali]

Keep in mind this is all pre- WIR/Your Money. Took out a HEL on our house to pay off credit cards. Moved to CA and DH ran up our cards again. Took out a HEL against the new house to pay off credit cards again. In the process we paid off my car. Everything was great until 6 months later when DH talks me into buying a new car. So now I am saddled with a $600 monthly car payment.

Oh well, nearly out of debt again and not letting that happen again.

Haven't made any major purchases or money blunders since in joined these boards

[Gardening Grandma]

I think I've made all the classic mistakes: I've borrowed from my 401K, paid only the minimum on cc debt, not had a budget, not paid attention to interest rates (either on savings or debt) at a time when interest rates were in the double digits.
My most expensive mistake, however, was getting caught up in the tech bubble in the late 90's.

[Savoir Faire-Demogague in NJ]

The only thing I can say that as a mistake was buying a 1974 Triumph Spitfire way back in 1976. I spent a fortune on maintenance and repairs. I was 21 at the time, should have went with a more reasonable choice. That was about one year prior to getting married so it did cause some financial issues on my end.

[fuel100]

Feb 11, 2011 9:45:42 GMT -5 Cookies Galore said:

Feb 11, 2011 9:14:04 GMT -5 @fuel100 said:

Not one big mistake for me, but my wife and I both like to drive new vehicles. We each get a new one about every three years. We have plenty of money so we don't mind having two car payments. It's our only financial vice.

Dad?!?! I swear, that's exactly what my Dad told me once when I was talking to him about my finance plan. He said his only vice was leasing cars every three years, but he likes driving new cars. But considering the man retired at 56 and has never had difficulty with money, I think he gets free pass.


My biggest financial mistake was listening to anything my Mom said (who is TERRIBLE! with money). Long story short, I'll be CC debt free in May!

That's funny, I do have a grown daughter named Megan.

[Cookies Galore]

Uh-oh...
Well, you spelled Meghan wrong, so you're not my Dad!

[fuel100]

Feb 11, 2011 10:37:07 GMT -5 Cookies Galore said:

Uh-oh...
Well, you spelled Meghan wrong, so you're not my Dad!

Exactly. I'm not going to take a paternity test either.

[Urban Chicago]

Not a regret yet, but if we were selling our house right now, I'd probably say that was a big one!

[DVM gone riding]

I wish I had bought my house 6 weeks latter!! I missed out on the 8k tax credit and by then I think I could have knocked another 5-10k off of the price

[Deleted]

Along the lines of Urban Chicago; we had an unsolicited offer to buy a commercial property we co-owned with another family owner towards the end of 2004. We sold the property but instead of taking the money and running we did a 1031 into a house. The tax hit on the sale would have been something like $140k. If we were to sell the "new" house today we would probably lose $150k!

I think it will work out as I don't see us selling for at least 10 years. And for a while I felt o.k. because not only would we have paid the taxes but also would have invested it in the stock market a couple of years before "the crash of 2008". Now our stock investments have recovered but the real estate continues to be in the doldrums.

[hawkeyes2001]

Racked up $85k in student loans and about 10-15k in cc debt during the 18-24 year age time period.

cc debt is long gone. private student loans with variable rate long gone as well. Now I just owe 49k consolidated at 1.875%. I can live with this.

Mommy told me that credit was there to be used and not to worry about paying it back. I was 25 before I realized mommy was wrong.

[Firebird]

Supporting another adult and a kid (who wasn't mine) in addition to myself at age 20. It was a bad decision at the time, but a very good lesson.

[shanendoah]

Cosigning for a kind of DBF (also old friend) on a cell phone, in the early early days of cell phones. He defaulted and no one contacted me until the notice right before it went to collections. I paid it,then complained to a co-worker. Of course, that same week, our store manager forgot to do the nightly deposit and it disappeared. Because I was the closing shift manager and had mentioned the collection notice, the chain ops manager decided I was guilty of taking it (I DID NOT. I had access to the safe but never had a reason to open it, all of my stuff could be dropped through the slot, which is what I did). She couldn't prove anything, but fired me later for breaking a "rule" that every manager I had ever worked with at that chain broke at least once a week.

Other than that, putting my student loans into forbearance as often as I did. I graduated in May 2000, and in October 2011, I will have finally paid off all the interest that accrued and actually owe less than I borrowed.

[whoisjohngalt]

Would it be too mean to say marrying my DH and by extension his family? Our biggest fights have ALWAYS been about giving money to his family. I don't regret marrying him, but I DO regret not setting up better boundaries before we got married as far his family's financial support.

Lena

[Regis]

Waiting for someone to say "having kids"... ;D

Those little boogers are expensive!

[debtheaven]

Cosigning a lease for the first nanny I hired after my ex left me with three kids aged six, four and one month. After a few months she told me they wanted to move closer to me, but needed somebody to cosign their lease. No problem, I blithely signed.

Then they decided to move back to Portugal. Hugs all around. And then the police contacted me asking if I knew where they went. I was called into the police station twice to do a formal declaration. I was single then, absolutely terrified. At the end of my interrogation (I can only call it that) the police officer put on a nice face and said, but how on earth did they ever get that lease in the first place?! Lady, please tell me you didn't cosign for them?! Because if you did, Lady, you owe all their back rent!

Uh-oh. I drove home, called my (divorce) lawyer (because I was still in the process of divorcing from my ex) crying. She immediately wrote a letter to the owner of the apt. An elderly German woman who went back to live in Germany after her French husband died, but who kept their apt and lived at least partly off the rent. The owner VERY kindly decided to cut me some slack because I was (and I quote) "obviously extremely young and foolish". She wrote me a letter that was PAGES long, explaining that she depended on that rental income for her retirement. But she felt sorry for me (because I was obviously "foolish" rather than "ill-intentioned", again, I quote. So her deal was that she would only charge me until the apt was redone and re-rented, rather than for the entire lease as she was entitled to, under the condition that I wrote her back promising to NEVER EVER do it again.

In the end she charged me for three months' rent, rather than the 18 months left on the lease. (Three year leases are standard here.)

OH BOY DID I LEARN MY LESSON!!! And that was in the mid 1990s ... no cell phones, no computers, no email. You had to wait days, or weeks, for a snail mail response in those days!

I was so traumatized I ended up telling my kids as they were growing up that I would NEVER EVER cosign a lease for ANYBODY, even for them LOL. (I would now, because of where DH and I are now, and because of who our kids are now.)

But it was an important lesson to learn. I know I got off easy! She also taught me a very valuable lesson in being graceful, and paying some things "forward".

[TheOtherMe]

I was doing fine financially until I had a serious illness and thought I was going to die. Since I was going to die, I racked up major credit card debt. Guess what? I didn't die and am finally debt free again. Never again.

If I can't pay the credit card off next month, it's not gonna' happen.

[debtheaven]

TaxPro
I'm sorry about the racked-up CC debt and I'm glad it's paid off. But above all I'm glad you're still here to tell the tale!

[TheOtherMe]

That is what I keep telling myself, too. I'm here to tell the story. They told me I had a year to live, so I spent, spent, spent. That was in 1999. Proved them wrong, didn't I. I sure paid for it on my credit score, etc.

But I worked my way out of it and was able to buy a brand new house in July of 2009 on my own. I am saving to purchase a new car as my car is a 1994 and will someday no longer run. So far, it has only needed one major repair, but nothing not expected with a car that age.

[Deleted]

Not a huge mistake but I was to conservative with my investments when I was younger. I just didn't know any better.

[Plain Old Petunia]

My choice of marriage partner was definately the biggest financial mistake I ever made.

[wvugurl26]

I think its just a bad combination of choices. One or two bad decisions alone wouldn't have sunk me. Not starting retirement savings until I was 26, not having enough leftover to invest on my own outside of work pension and tsp, cheap car insurance, no savings, borrowing $19kish for masters degree, 7 months in a job making $10/hr bc it was what I could find and was stuck in lease, ~$5k in CC debt currently, not knowing I could ask for more money even with govt grades/steps/etc.
Working on getting it turned around now. I know the usual get another job but that would have to be approved by my employer and they don't approve just anything. Get a $10k raise in July that will help.

[busymom]

One big mistake I made was not getting the full match on the company 401K plan. When you're in your 20's, retirement seems so far away. I think I was only investing 2-3% into retirement at the time. (Stupid, stupid, stupid!) Wish I could do a "do-over" on that! (And yes, DH and I were saving for our first house at the time, so it's not like we totally blew the money.)

[gsbrq]

Biggest financial mistake was waiting until age 34 to start saving for retirement. I'd be in such good financial shape now if I'd started with my first job at age 15! Of all the "non-optimal" financial decisions I've made, that is my one real regret.

[onestepcloser]

My biggest mistake was getting cancer - before I was diagnosed I had no debt, now after it is all done and I am back on my feet: over $30,000.00 in debt because insurance would not cover it and hubby lost job since he was driving me to and from everything since I was always sick.