We’ve all made financial mistakes, whether we realize them or not. Many financial bloggers only detail their successes, so I wanted to just put it all out there. Today I’m going to talk about the times that I truly screwed up financially. And you know what? It’s okay. I’ve learned from the experiences and become better at handling myself and my finances as a result. No use in crying over a spilled piggy bank. I think that’s how the phrase goes, right?
My parents were able to pay for most of my first year of college, which I am grateful for, and I had to pay for the remainder. I did receive scholarships for about half the cost of my schooling, but the rest was put into loans. After my freshman year, I was desperate to get off of campus. The cost of living on campus vs. off was about 3x as much. I found a great place to move. It was close to campus with some good people as roommates. After the lease was signed, I went straight to admin to cancel my room on campus and save myself several thousand dollars. I was so proud of myself.
Yes, by the time I made it to admin, I was ONE day late to being able to cancel my room and not be charged. I didn’t even know about this rule or see it on any paperwork. To say that I was furious with myself is an understatement. I ended up having to pay for one semester of housing on campus and off while living off campus. This cost still worked out to be less than living on campus all year, but I couldn’t believe how stupid I was to let that happen. That lesson of “read the fine print” cost me several thousand dollars.
But, I Deserved It!
After I graduated from my undergrad program, I was able to get an internship that was meant to just hold me over until graduate school and give myself some spending money. Then my car died. The transmission finally went and the cost was more than the value of the car, so I decided to get myself a car that I wouldn’t have to worry about getting work done on every month or two. For some reason, in my mind, that meant getting a brand new car with a big ‘ole loan. After taxes, fees, and interest over the life of the loan, it cost me ~$31,000. I would have been just as happy if not happier with a car that cost half or a third of that.
About 2-3 years into my car loan was when I discovered the concept of FI and particularly MMM with his opinions on “clown cars”. Boy, all I wanted to do was go back to that dealership and face punch “Past Me”. All of the things that I could have done with that money instead of paying for this unnecessary car started to come to mind. I still enjoyed the car so, I made plans to pay the car off quickly. Then I would keep this car until the wheels fell off and never have a car loan ever again. So far, so good.
Wrap It Up
These lessons were learned at the cost of many thousands of dollars, which are equal to many hours of my life working to pay for these mistakes. However, I’m lucky to pay for these mistakes early on in my life and not when it could more seriously impact my financial future or that of my family.
If you have made a mistake, no matter how egregious it may be, it can be fixed. The only thing worse than making the initial mistake is realizing that it was a mistake and continuing to throw good money after bad. Putting time and money into something that doesn’t align with how you want your life to progress is just a waste of two of your most precious resources. These resources could be used for bigger and better goals and ideas. Things that can really take you from where you are and who you are to the person and place you want to be in life. Just because you’ve made a mistake, doesn’t mean you have to keep paying for it, literally, over and over again.
Pick yourself up. Dust yourself off. Move on to something better. You deserve that.
What are some of your biggest financial mistakes? Let me know in the comments below!