Trust me when I say that I’ve made my share of stupid financial mistakes in my 35 years on this earth. Also believe me when I say my life would have been a lot easier if I didn’t make any mistakes with money in my teens, then again in my 20s. But you know what? I learned from them and they’ve made me the financially responsible person I am today – and that’s why I have no regrets.
I made some mistakes, but I only made them once and that’s pretty cool. I’m not ashamed of my past because I learned from my mistakes, I did whatever I had to (literally) do to pay off my debt and now I live a very different life.
I’m a better person for my stupid financial mistakes and I like to share my story because if I can help even one person avoid making the same errors with their money then I will be happy. I like to think that I’ve helped more than one and hopefully that number goes up after you finish reading this.
Here are three stupid financial mistakes I made, but don’t regret:
I bought a new car
Worst. Decision. Ever. But you know what I’ll probably do it again. However next time I buy a new car I will be prepared for the financial commitment. I wasn’t ready the first time around. In 2007 I purchased a brand new Honda Civic for no reason other than I didn’t have one. Yes, I know, stupid.
I was 27 years old, had a good job as a financial planner, never had anything of my own and all my friends had cars so I wanted one too. One day on my lunch hour I went to Honda and bought a new car. A year later when the market crashed I couldn’t afford the $500 monthly car payment. I did the best I could, but three years later I ended up selling the car with less than 30,000 miles on it.
Financial lesson number one: don’t ever buy something just because you’re keeping up with the Joneses. You can’t afford to be in the Jones family.
I took money for granted
When you work in investments and the market is booming there is a lot of money to be made…A LOT OF MONEY. However, when the market crashed globally there was NO MONEY to be made. In 2007 I was making a six figure income and I never thought that a year later I would be dead broke.
I never saved a single penny (or should I say nickel because we don’t have pennies in Canada) because I was young and stupid and thought there would always be money to be made. I was wrong.
Financial lesson number two: always save because you never know what’s going to happen in the world, in your life or with your job.
I used credit card cash advances
Oh good Lord this was a stupid idea. When I was 28 I got my first platinum MasterCard with a $10k limit and I thought I was on top of the world. I used it to purchase expensive electronics, go on vacation and put gas in my new Honda – remember how expensive gas was in 2008?
After the market crash my income dropped by half and I couldn’t afford to pay rent. Some people would get a second job, some would move, but not me. No sir. What did I do? I took out cash advances from my shiny new platinum MasterCard to pay my rent. That’s a mistake that helped me rack up over $50k in debt by the time I was 29.
Financial lesson number three: Don’t take a cash advance on your credit card because the interest rate is higher than on purchases and there is no interest free grace period.