in Debt, FS

Confessions of a Gadget Junkie

Ah, April Fool’s Day. Such a special day at Get Rich Slowly. Every year, I share a story of my own foolishness with money. And there are so many stories to choose from! Stories like The $1500 Frisbee and How to Turn $500 Into $7 the Hard Way. This year’s story is about my love for computers.

When I graduated from college and went to work for the family box company, I had no concept of setting financial goals or saving for the future. I spent each paycheck as it came in — and more. I liked the idea, though, of investing my money. In my naive little mind, I imagined that the stock market made people rich.

So, when my cousin Nick — who is five years older than I am — took the time to explain what he was doing with his money, I did my best to listen. (I didn’t listen well, though, and didn’t really understand what he was saying.)

Nick told me about mutual funds, pools of stocks and bonds that made it easy for small investors to own a lot of companies at once. He told me that he was investing his money with a company called Invesco, buying funds of medical stocks and technology stocks. “I’ll do that, too,” I said.

Investing made stupid
This was back in 1992. I had the beginnings of a credit-card problem (about $12,000 in debt), no savings, and was making $30,000 a year. I was also spending more than I earned. To find the initial contribution to my mutual funds I had to — no joke — take a cash advance on my credit cards. It never even occurred to the 23-year-old J.D. that he was paying roughly 20% to chase uncertain returns in the stock market. This just seemed like the thing to do.

I sent in my $1,000 initial deposit, and then signed up for $50 automatic monthly contributions.

Sometime soon after, my Apple Macintosh SE died. I can’t remember why, but I know that I was convinced I needed a computer, so I did the only thing I could. Because my credit cards were maxed out, I cashed out my mutual funds to get the cash I needed to buy a Macintosh Classic II. (Kris contributed half of the funds, which she simply pulled from her ample savings.)

Looking back, I weep at how stupid I was. But there was plenty more to come.

How not to spend a windfall
My father died on 21 July 1995, ten days shy of his fiftieth birthday. When he died, he left each of his sons $5,000 in life insurance and 10% of the box factory.

By this time, my credit-card debt had grown to just over $20,000. If I’d been smart, I would have taken the life-insurance proceeds and used them to immediately pay off $5,000 in debt. But I wasn’t smart. I’m sure you can guess what I did.

I used $1,000 to pay off debt (and patted myself on the back for it), but took the rest to purchase a Macintosh Performa 640CD DOS-compatible personal computer. The machine was awesome. And expensive. And because it ran both Windows and Mac OS, that meant I spent twice as much money on computer programs.

My father had gone to a lot of trouble to set aside a bit of life insurance for us (he didn’t obtain the policy until after he discovered he had cancer). He wanted to give each of us a little boost so that we wouldn’t make the same mistakes he had. It was a nice idea, but it didn’t work.

Cash is king
I could go on and on, of course. For instance, after I’d cut up my credit cards in order to avoid new debt, I still found a way to buy a new computer on credit. I applied for a consumer loan directly from Apple, which gladly gave me the rope to hang myself. In 2003, I borrowed $3,000 to buy a brand new Power Macintosh G5 tower.

But eventually, as I started my financial turnaround, I learned to resist the lure of the money-saving gadget. In fact, when Apple first released the iPhone, I was in full debt repayment mode. As much as I wanted one, I resisted. It wasn’t until I’d paid off the last of my consumer debt that I finally gave in. But when I bought the phone, I paid cash.

Now, of course, the Apple iPad is just days away from launch. And yes, I’ve ordered one to be delivered to my door on Saturday morning. Is this just as stupid as all of my other tech purchases? Perhaps. But there’s one key difference. This time, instead of cashing out my mutual funds or using a windfall to fund my purchase, I’m using money I’ve put in my savings account for this very purpose.

It may be that I’m paying a penalty for being an early adopter, but one thing’s for certain: Because I no longer finance these sorts of purchases on credit, there’s no compounding on my stupidity. What I pay is what I pay. Now if only I could learn to be satisfied with last year’s model…

Okay, it’s your turn. I know I’m not the only April fool out there. Tell us about the stupid things you’ve done with money. What’d it cost you. What’d you learn? How you turn things around?

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100 Comments

  1. Good story here. I am glad you turned your finances around.

    I do not really have a turnaround story but do have a friend who influenced me in investing.

    In grad school I had a really good friend who had a subscription to the wall street journal. I thought that was odd for someone in their early 20s. He helped educate me on the concept of mutual funds, retirement accounts, savings, etc. When I got my first job at 24, I immediately opened a 401K and mutual fund account.

    I have really never been gadget crazy, so I cannot comment on that one.

  2. In the 80s and 90s I bought hundreds of music CDs while I was carrying a bunch of credit card debt. I eventually saw the error of my ways. For 5+ years now I have been out of debt, and have switched to buying the other kind of CDs (the ones from a bank). I have been watching the music CDs collect dust for the past 3 years since I put the music on my hard drives, and sometimes regretting having spent almost $10k on them, plus lots of credit card interest. Last week I decided to send 600 of them to http://ipodmeister.com , and will be getting an iPad in return shortly. Not a very good return on investment, but better than I expected to see.

  3. Nice story JD–for me, I convinced my wife to join me in a pyramid type business focused on military auctions—buying military old supply and then re-selling it. We had to drop $500 to get in (that should always be a clue–“hey, I have a great job for you; you just have to pay me to get in”–duh, I can see who’s going to really rake in here). This came when I was in seminary and we were living so cash-strapped (though out of personal debt—kind of a focus for me) that we had about $25 a week for groceries. Plus, I knew then that I hated doing sales, so even if we did buy something it would have only sat in my backyard gathering rust.

  4. I grew up in the 60s and 70s watching my mother pay for all my school clothes with her Visa (it was Bankamericard then). What I didn’t see was her writing a check each month to pay off the card. She never carried a balance, but I didn’t know that until years later.

    So, I came out of the gate charging everything but groceries and rent and the car note when I graduated from college. Because I only made the minimum monthly payment, my balances crept ever higher, of course.

    Some 20 years later, I was able to pay off around $15,000 with my husband’s help. It was a painful and embarrassing lesson to learn, and my early recklessness with credit is the one aspect of my personal history I would do over.

    Now, I’m debt free. The irony is, it’s far easier now to choose NOT to buy things than it was when I was charging everything.

  5. My first car in high school was a Jeep Wrangler. My parent’s took out the loan in their names, and I made the payments. I struggled with the $99 payment each month, but I made it, and I paid the car off myself without missing a payment and had the title transferred to my name in the end. The sad part was, I put about $5000 into a stereo system, oversized tires, a winch, a chrome grill, new seats, and all sorts of other shennanigans. All told, I spent $8000 total on the Jeep, and sold it three years later for $1000. Talk about feeling sheepish! Looking back though, I couldn’t have asked for a better first car.

  6. At the end of last year I counted my DVDs. I have 102 of them (some multiple disc). At an cost of 5 to 19 dollars each I estimate that I spent about 1,000 dollars.

    I realized I was watching a previously-seen DVD only once or twice a month.

    What a waste of cash.

    I decided that I would not spend any new money on DVD’s for this year (except for one b-day present for myself). I am allowed to trade or sell my current DVD collection to get different ones though.

    So far this year I have not bought any. DVD –although I have traded for a few (e.g., Caroline for Shawn of the Dead). I have not re-sold any as of yet.

    Not the worst waste in the world but a story that fits here.

  7. My broker (who accepted our money $10 at a time)retired . Her son took over her accounts. We had lots of dollar over dollar money in Worldcom. I went in to take it out. Gut feeling He had a great sailing boat picture on the wall, ” I just bought it.” “Don’t take your money out- the company is fine.” Easily embarrassed and a teen outside on the side walk I left without taking it out
    The NEXT DAY I lost a large chunk of our life savings when it went under. Still writing it off – 14 years later.

    Hard lesson- trust my gut. At least I trusted in at 14,000…and know how to save on one income!
    Also, no one cares about your money more than you- so take good care of it.

  8. I bought a Toyota Camry for $1800, sold it for $1200 to buy a VW Jetta Diesel for $9000 IN ORDER TO SAVE MONEY ON GAS.
    Nearly two years later I’m still paying on the car loan!

  9. I cashed in a mutual fund to buy a Mac. I wish I’d kept the stock in an IRA — it is a good company. But I can only move forward with the knowledge I gain from sites like yours. AND I bought my iPhone with cash this time. I learned something! Thanks.

  10. I love computer technology but I have not purchased a computer in many years. People give away the “old computers” that are running Microsoft operating systems and are full of virus and spy-ware. I wipe the disk drive and install Ubuntu and other free, open source software. The free computer suddenly runs as fast at an i4 and has cost me nothing. Now people are starting to give away multi-core computers! Recycle and reuse. Keep your money in your investments.

  11. When my wife and I decided to start a college fund, we made an appointment to sit down with a financial advisor. Thinking ahead, I took out a cashier’s check for the amount we were planning to invest. When it came time to give the advisor our initial investment, he said a personal check would work just as well — so I wrote a personal check instead, wrote VOID across the $5000 cashier’s check, and put it through the shredder. Since it was about full, I dumped the shredder’s contents into the kitchen trash and took it out to the dumpster.

    The next day, I was looking at my balance online and trying to figure out why I had already been debited for the $5000 cashier’s check when it hadn’t been cashed yet. After googling “cashier’s check” and slamming my head on my desk a few times, I went out to dig around in the (now much-fuller) dumpster to no avail.

    Fortunately for idiots like me, my bank agreed to refund the money after 30 days as long as I would sign a document saying the check had been destroyed, which I was sure of. (I did it myself!) Needless to say, my wife no longer allows me to handle cashier’s checks on the very rare occasions when we use them.

    • What advantage did you see to writing a personal check instead of the cashier’s check you already had prepared?

  12. That’s just funny but I feel the same, 5 months ago I had a 19,000$ debt, and I was merely doing 24,000$ a year. Now imagine, I couldn’t even rely on myself to buy food I was always late in my payments and somehow I always managed to find excuses to spend more money. I was full in debt when I got the iPhone but felt like it was worth the money. 5 months layer I got rid of my car, I asked someone to take over my iPhone, payed entirely one of my 2 credit cards and now I’m just over 2000$ in debt. It’s been a really hard time and I had to rely on my parent’s for food and shelter but I’m going back with my girlfriend in 3 months, free of debt.

  13. I got a full college scholarship that was contingent on maintaining my GPA above 3.5. I kept the scholarship for 2 years, and the first foolish thing I did was allow my GPA to drop below 3.5. What really makes me kick myself, though, is that there was an appeal process for extending the scholarship for one year in the event of extenuating circumstances (for example, a death in the family or serious illness). I didn’t have much of an excuse, so I didn’t even try to appeal. I later found out that almost every appeal was approved, even if the excuse was simply being under a lot of stress. I probably could have kept my scholarship for another year, which would have been almost $10,000.

  14. In the early 90s spent $240 on a pair of nice leather, fur lined, cowboy boots. They did not fit as well as they should have so I only wore them a few times. A few years later I came to my senses and realize that I am too boring and conservative to pull off the cowboy boots look and donated them to charity.

  15. I took out a $5,000 personal loan to invest in the stock market towards the end of 2008. We all know what happened to the stock market in late 2008…
    It felt so good when that loan was finally paid off…

  16. It may be that the money you “wasted” on gadgets helped you develop the technical competence that allowed you to push this blog to the top of the heap.

    Life is funny that way. We do dumb stuff and are rewarded. We do smart stuff and it kills us. This sort of thing happens all the time.

    Rob

  17. I got rid of a terrific, paid-off ’02 Chevy Impala for a less than great ’07 Ford Mustang with a car loan and high insurance. I’ve since vowed to be more shrewd with car choices.

  18. I’ll second post #2 and #6 about the CD’s and DVD’s. From the time I got my first job in high school, I would get my paycheck and then go to Best Buy to buy CD’s 2 or 3 at a time. I’d also go to movies almost every weekend. When I got into college, I got back in to comics and baseball cards. After college, I moved to Books, magazines, and DVD’s.

    One day, you look at all that stuff, shelves full of CD’s, DVD’s (many unopenned), and books (many unread) and boxes of comics and magazines along with a stack of movie ticket receipts and you think, “I wish I had all that money back.”

    I suppose I created a lot of fun experiences for myself at the time, and I’ve used my pop-culture and movie knowledge to start a movie-themed webcomic, but still, I can now think of a bunch of better ways I could have spent that money.

    Oh well, live and learn.

  19. I am over $47000 in debt getting a BA and MA in Theology and an MLIS. Funny thing is: I’m not even that religious anymore (although I do enjoy the study of religion) and a job in a library, even one specializing in theological resources, barely pays a decent salary without adding the cost of the loan on top. Oh well.

  20. I have a good one I purchased a brand new car in 2002 (a 2003 model) with the intent of turning it into a show car. Which I did I took a 21K car and over the next 18 months added between 25-30K of Rims, stereo, suspension, engine work and body mods you name it I had it on this car. I won multiple trophies at some big national car shows, but I wanted more. I sent it to a shop halfway across the country to “develop” some prototype parts for it. Well 6 months later when i took the car back from them on a flat bed by force. I had to deliver it to another shop to get it somewhat running again before I could drive it back home. I took it home and pretty much parked it for the better part of 5 1/2 years.

    I recently sold the car for $1500 bucks just to get it out of my garage. I was so mad at that car for the whole time it sat there laughing at me. For the past 5 years I haven’t even been able to enjoy my favorite hobby which is cars. I had taken a loan on the car 21K over 5 years + interest, plus lets say 25K in parts (lucky that was mostly paid for in cash) Also lets not forget while I was paying on a car sitting in the garage un-drivable I went out and purchased another new car.I just think what I could have done with that cash or least the cars I could have purchased for 70K+ I want to cry.

    Well I guess that is how you learn. I just wish I would have learned it with only a 1/10th the investment in cash.

  21. I havent done anything this stupid. but I will tell you what I think of the iPhone, iPad and such. I dont really want to make whats-his-face-Steve Jobs, I guess, any richer. He is rich enough without my adding my nickel to his pile. That idea really stops me in my tracks. My celphone, a blackberry, is paid for by my employer-I dont need it much and rarely use it-a waste of time and money. Perfectly happy with a landline. The office pays for my home computer too. I will not buy another, and may go computerless when I retire-its just a time suck. I would rather get my ironing done. I would rather buy artwork: mine has appreciated 10-20 fold since I bought it-gadgets depreciate.

  22. Sorry to hear about your Dad. He was young.

    I have been pretty good with money. Unless you factor in eating out. I’m not big on homecooked meals.

    My mistakes with money was menial. Enough to make up for it later

  23. Mine is definitely pianos. I know how to fix them up and I like doing that but I now have 5 pianos in various forms (organ, electric piano, acoustic)….and I don’t even know how to play that well! It’s not a big deal because I have friends that can play well that I play along with, but I still feel sheepish when I think about it or tell anyone about my “gadget” obsession.

  24. I funded my entire undergraduate degree myself with private and federal student loans. Unfortunately, I also racked up credit card bills on frivolous stuff (none of which I still own today), and then took out larger student loans to pay off the credit cards. To make matters worse, over the years I would use any excuse to defer payment of the loans, such as when I took a couple college courses just for fun in my spare time. Eventually I had to defer again for a full year when I went back to school full time for a new degree. I took out my first Wells Fargo private student loan in 1994, at 9% interest, and 2 years ago I had a balance higher than the original disbursement amount, over 30k! The whole thing makes me sick to my stomach to think about. I’m morbidly curious as to how much money I have paid in interest on that loan over the last 16 years, but so far I haven’t had the nerve to calculate it out. Now it’s more than half paid off, and we should be rid of it in a year or so. Sadly, that is only the worst of many terrible financial decisions we have made over the years, and 2 years ago when we finally started to seriously pay the loans off, we had 120K in consumer/student loan debt. Unbelievable. We’re down to 80k now, and while theoretically we should be able to pay it all off within about 3 years, it seems like a pipe dream that will never actually happen. I wish I could go back to being 20 years old again and do pretty much everything differently.

  25. Back in 2000 I was purchasing my home. I did have 20% down from the sale of my condo, but I had no emergency fund and was living on the edge.

    A friend of mine living in San Francisco working for a tech company. For the years she worked there she told me what a great company it was. I didn’t have much money, but scraped together $750–the last of my savings to buy stock. The bubble burst and the stocks were worth nothing within a few months.

  26. When I got engaged to the man of my dreams I had already dreamed what my perfect wedding would be. As we started the planning process my parents offered to give us $25 000 as a wedding present, either to pay for the wedding or to use as a down payment on a house. I convinced my fiance that we would only have one wedding, but we had many years to save for a house. He agreed and we stayed in our little apartment while I planned a grandios wedding for 400 people.

    It was a beautiful wedding! 8 bridesmaids, 8 ushers, limo bus, prime rib dinner and a $3000 dream dress. I really tried to stick to the $25 000 budget, but as anyone who has planned a wedding knows, things get out of hand and at the end of it all we spent approximately $55 000 in total – on one day!

    I wish the story ended there. Almost 3 months after the wedding my husband came home and told me that he was moving out of the province. He realized that he was in love with one of his co-workers, and his company was transfering her to their office 3000 kms away due to their relationship. He decided to quit his job and follow her there.

    That was in June of 2005 and I am proud to say I am almost finished paying off the additional debt we incurred for the wedding, in addition to the $25 000 my parents gave us (still owe them $6000). I insisted on paying them back and I have been living frugally in a tiny apartment and working a part time and a full time job since.

    Thank you for making me realize that I am not the only one who makes stupid mistakes, and for helping me regain control of my finances.

  27. I used to have the bug of getting the latest computers. For me, it wasn’t macintosh, it was a build your own PC. I would upgrade stuff way too much. We all know how much you regret those purcahses eventually.

    What cured me, aside from getting older and wiser, was to start using Linux. For one thing, there’s constantly things to learn, so I don’t feel like I’m bored with technology. For another thing, there’s a new version every six months, which is about how fast I used to upgrade my computer wanting the fastest, greatest hardware. Lastly, Linux doesn’t always work with hardware that’s less than a month old, so you really have a hard time paying that first-one-on-the-block premium.

    I’m about to start some open source coding projects of my own, because I appreciate the community so much. This is going to give me something to do (cheap hobby, since I already own the computers) and give me something else to throw onto my resume. I have a good job now, but if I wanted a better one, then public code experience is money in the bank.

  28. My biggest financial mistake was not being ontop of my paperwork in college. There’s one year I didn’t even apply for FAFSA, just took out a loan for the full amount. Yes, absolutely beyond stupid.

  29. Bought my condo with no money down (100% financing). Looking back, it was a dumb move. I’m miserable in that condo and having a horrible condo association/management company that bleeds money, cannot tell us where our money is going, then try to get us each to pay 4k up front or 46 bucks a month for 10 years for brand new siding (in this economy) doesn’t help. We had to petition and go door to door to get homeowners signatures so we can veto the board’s unilateral decision…when in the condo bylaws, it states that for something like this (a project that will cost 900k plus or minus) needs to have a vote taken of all homeowners. Finally, the ‘allowed’ the vote…and we voted it down.

  30. I have too many financial horror stories to think about but I would just like to say that I wish I’d never plundered the 401K ….or bought the 1966 Thunderbird home from Solvang on a flatbed for ‘restoration’ ….or bought more house than I needed…and so on.

    I hit bottom, resolved to change my ways, and the past 3 years have been much better.

  31. Am I a fool or what?

    This past year, I put my annual tax withholding, $20 K, into a stock for a company with a unique energy storage product that was going to launch in December 2009 and save the world. As April 15 approaches, I am still waiting and there is no new news. 🙁 Now I am working 60 hour weeks to make up the taxes by April 15th. Even though the stock is worth half of what I bought it for, I am still holding out hope. Go Zenn Motor Company!

  32. Yes, thanks for the stories. Dee, #26, that’s a heartbreaker of a story and you are brave to share it.
    My idiot story is using my credit card to eat out all the time. When I grew up it was a special treat to go out. For several years I “treated myself” almost daily using my credit card, with no regard to the debt I was accumulating or the type of food I was eating. Needless to say it was embarassing to spend money later–and on my credit card- to pay for personal training and Weight Watchers to take off the weight I put on. All total, at least $8k over 3 years.

  33. I could have made a down payment on a house with all of the money I have spent on compact discs over the past ten years. I love listening to music — I do play them — and I have enjoyed the collecting aspect, but I can tell it is time to leave the buying behind and focus on enjoying what I own. The dumbest thing I have spent money on is cigarettes. That’s another thing I will soon be leaving behind.

  34. Oh I have one that still stings- we bought a house, a TINY house worth $68K in a bad neighborhood, and somehow ended up with $960 in monthly payments. !!?!?!?!! My real estate agent told me that the ‘big secret’ that nobody was telling me was that we’d get all teh interest back in taxes, so the trick was to take the tax return and divide it by 12 to help with the monthly payments. Everybody does that-didn’t you know? She also advised us to refinance THE MONTH AFTER WE MOVED IN. Well, re-fi requires more $ that we didn’t have and our tax ‘refund’ turned out to be about $100. You can guess where that road led..

  35. My April fool was borrowing money on my 401k to buy a “cant miss” triplex,

    The tenants never paid rent and I had to do 3 evictions; that took weeks and weeks. One decided to take everything down to even the door knobs. Then yes, I got down sized at work where for 8 years I thought I was too valuable to ever be replaced. Not replaced but consolidated. Ouch.

    I was so leveraged trying to get rich quick in real estate that I couldnt pay back my 401k.

    Never again, no debt, no credit cards, no trying to leverage my way to riches.

  36. Great topic for April Fool’s Day. Thanks for initiating it; it helps one see the wisdom of good financial skills as well as making you feel a little less like an idiot. Others have done similar things too.

    I think the biggest foolish thing I did was to be the “spender” in a “saver” marriage. My husband always told me that if we could carry $3-5000 in credit card debt, we could equally as easy save $3-5000 instead.

    I grew up in a large family and while I didn’t feel especially deprived, I couldn’t wait to get a paycheck and be able to acquire things. Marrying a saver didn’t rub off on me until we came close to retirement and I started worrying about what we would live on.

    Fortunately, a friend turned me onto your website and it was the best thing that ever happened to us. I read all the books, especially Dave Ramsey and quickly with “gazelle intense” effort, our home was paid for (I don’t even want to think about how much we ACTUALLY did pay for it); and our cars were paid for and we were debt free.

    We have shared the books with our children and only hope they will adopt the Baby Steps and be financially secure throughout their lives.

    Thanks for the great advice.

  37. I married a man who was a financial disaster (and still is)with HUGE earning potential. Our entire marriage he spent every penny we earned and all available credit to get gadgets and keep up with his friends (who earned a QUARTER of what he, as an engineer with no student loans, did and had NO debt) — computers, video games, consoles, DVDs, cameras, clothes, cars… it seemed that every time I got us consolidated and had a plan in place to get out of debt, he applied for another credit card or store card!!

    I believed I could change him. When I left him we had a $125K home in a VERY nice neighborhood that he decided (against my wishes)to refinance less than a year after we bought it for $175K, $6K on VISA (which the bank had promised would be capped at $1000!!), and $20K in a line of credit… and that was just the debt I KNEW about. He took the ENTIRE $40K he recieved in the refinance (i had left him by this time) and bought himself a new car (using cash and visa), paid off the line of credit, and bought himself a whole new wardrobe, had laser eye surgery, paid taxes on the house, gave money to friends and girlfriends… basically frittered everythign away. Meanwhile I and his children didn’t get one PENNY of support (while he made $90K/year and I made $20K/year)…
    But, leaving him was the BEST THING I could do. Despite him hanging onto the house until the housing bubble in our area burst and the courts allowing him to ratchet up debts under my name AFTER I left him… once the house was sold and MOST of the debts paid off with the proceeds I ended up in a much better position.
    Instead of shouldering the $40K in debts that were my “share” as a married person, I was able to walk away with only $5K in student loans (which I have paid off now, in less than a year), and $7K in legal debts. I now have a mortage under my own name, and a plan to get the rest of the way out of the non-mortgage debt AND STAY THERE…
    I could never have changed him… he’s still spending more than he earns and cashing in retirement savings (RRSPs here in Canada) to make ends meet!

  38. I guess I should feel bad about spending a metric ton o’ money on CDs, DVDs, and books, but I feel like I’ve gotten a lot of value out of them – and they’ve kept me content to not go out much for concerts, the theatre, first-run movies etc. I didn’t even have cable till five years ago.

    The thing that’s a *headdesk* for me is the digital piano in my dining room. It’s an excellent instrument, but at the time I bought it I hadn’t played regularly for over ten years. And I’ve had it over six years and have barely played it. It was bought used from a university music department and cost just under $6K, which I financed but paid off in full at the end of the first year.

    I feel relatively certain I will want to play the piano again in the future, but it’s a solitary pursuit, and I already have enough of those to fill my time. I want to spend my years with DH doing things with him, not by myself.

    So I have this dilemma. The piano is big, and it’s one of the things that if we ever need/want to downsize our living space, we’ll have to decide whether to keep it or not.

    Plus, when I’m old and alone, will I want a nearly full-size piano that I can’t move by myself, or will I want a small keyboard that’s more manageable? Most likely the latter.

    I’m leaning toward offering to give it to our friends who have a bright, creative little girl … and a big house.

  39. My wife and I recently went onto the Dave Ramsey program just under a year ago, and it has really opened our eyes to the kind of “smart” decisions we made. I love to ride bikes, and one of my pride and joys is my Orbea Onix TDF that I have been riding for 2 1/2 years. I did all kinds of work, and sold off a lot of extra stuff I had lying around the house in order to pay for it. I walked out of the store with a brand new $2000 dollar bike paid for in cash. I love it and have never regretted making that decision.
    Of course, once you get into the community, you start nickel and diming yourself. Once I was in the bike store looking to “upgrade” the pedals on my bike. The ones I had were slightly worn and needed to be replaced, but not necessarily upgraded. I found the pedals that I wanted, and they were only $120, that I didn’t have. Of course, with the pedal purchase, I would need a new $300 shoes right? Isn’t that how this works? $450 dollars later at 11.9% interest, I was looking more and more like a real cyclist! I used to laugh at the people that would buy their $6,000 bikes on a credit card and put them on the back of their 1999 Toyota Corolla and drive off. I was like “Well at least the car is paid for!” After taking Dave’s Financial Peace University I feel like such a hypocrite.
    The good news is, since the class, my wife and I have eliminated all our credit cards, developed a crucial skill called “Power Over Purchase”, reorganized our finances into this new thing they call a budget (maybe it’s a hard G pronounced Bud-Get?), finished paying off a personal loan we had taken out with my Grandfather, zeroed in on Credit Card number 1, and reduced our total debt by $7590.

  40. Probably the biggest one for me was skipping out on the $5k/year in-state tuition of the state school and selecting instead the $25k/year private school. I did receive scholarships and grants that dropped that tuition rate — but I also took on a hefty amount of loans.

    In the end, for my chosen major, the state school would have been a better choice.

  41. Had to post mine…

    In 3rd year University I bought a $3000 engagement ring for a girl that cheated on me in 4th year a month before we were to be married. I still have the ring (~10 years later), and I’ve been told by pawn brokers etc. that it’s worth about $60 to $300. And yes, I’d paid for it with student loans which I am still paying off.

  42. @chacha1 (#38)
    You just inspired a post! I’ve had writers block all frickin’ week, and now in the matter of fifteen minutes, I’ve outlined three posts, the longest of which is based on your comment. Thanks.

  43. Pretty much everything I did with money between 18 and 28 was stupid. The smartest thing I did was doing well in school and getting lots of scholarships. Even with $40k of free money for school, I still ended up with $24k of student loans. How? I would overspend every semester and pay off my credit cards with student loans at the beginning of the next semester. I kept my overspending, no-clue-with-money ways after graduating from college and landing a decent paying job. At 27, I cut up my credit cards. At 28, I started aggressively paying off my debt. Four years later I’m almost done with all the debt ($77k) of my younger years. $6k left to go and I’ll be debt-free!!!

  44. I think Dee takes the cake on this one. As for me, my April fool was DVDs. I have over 1300 DVDs, many of them unwatched. I would guesstimate that they totaled about $20k, not including lost interest.

    Of course via Netflix, we have access to more movies than we would ever have time to watch for $9/month.

  45. How about just years of not paying attention, not really knowing where my money was going and if i was saving or not. Just living in a financial fog. I always contributed to my 401K and never touched my investment account, but I don’t think I really saved anything for about 10 years. Oy vey!

  46. Let’s just say someone convinced me (and I convinced myself) that investing my savings in Washington Mutual before the crash in September 2008 would double my investment in a few months…

  47. My biggest mistake was marrying a “spender” and not keeping a close watch on her spending. $30k in credit card debt at one point. I put my foot down and began tightly managing the finances (she eventually left) and I am now debt free (except for a mortgage). I have a nice emergency fund and am aggressively saving for retirment and other things.

    Regarding gadgets, specifically cell phones. I find that these little toys are a huge drain on a budget. I have one. And, I actually only use it as a phone.

    I bet most people with Smart phones spend about $50/month simply to be able to access the internet from their phone.

    That is a huge cost when you can carry a laptop to a wi-fi spot or better yet, do without the internet when you are not at your desk at work or near your desktop pc at home.

    I like gadgets like most people, but to me the smart phone does not offer any bang for my buck.

  48. Stupid things I’ve done. Let me count the ways.

    OK, enough counting already. Don’t need to beat myself up too much.

    Thanks to great blogs like this, I’m learning though.

    Slow and steady wins the race. A penny saved is a penny earned. Get rich slowly.

    We can’t go wrong.

  49. Pam (#37), were you on Til Debt Do Us Part, with Gali Vaz-Oxlade? I saw that episode; and the whole time could not believe anyone (much less a husband) was that cruel and demeaning, as was that husband.

  50. I decided to go back to school and get my degree when I was 24 and thought it would be wise to move out so I could better concentrate. I have 3 younger brothers and we lived in a smaller house at the time. On top of regular government loans for tuition I was very easily able to get a 20K private loan to pay off my car so I didn’t have a car payment and another 7K loan for living expenses. I’m 29 now and done with school but I have learned alot since then and am in the process of quickly paying it all back. Thats probably the dumbest financial thing I could have done.

  51. my biggest money mistake was going to a private university on a half tuition scholarship (which left fund funding about 20k a year on private loans) when i could have gone to a state school for free. i thought the prestige of the private school would help me in life, but i ended up withdrawing after my second year and am looking to go back and finishing my degree somewhere else. but now i have almost 70k in student loans (from also attending a 6 month certificate program after withdrawing in a different field) and no degree to show for it. also, transferring has been harder than expected.

  52. Hmmm, I’d say buying 2 brand new cars just a month or 2 apart.

    I stressed about finances for years on the loans.

    Now, I own both cars free and clear… Next tiem I’ll go used to replace both cars.

    As for gadgets, I bought a new camcorder 2 years ago, that we haven’t used yet (we still use the old one).

  53. I have $25,000 in savings today and never invested a dollar, ever. I even dont have a saving account and all the money is in a checking account..

  54. I went temporarily crazy when I was pregnant and traded my nice little car with a really good interest rate and low miles for a bigger car with worse gas mileage and horrible electrical problems…for twice the rate I was paying before. The car dealers played April Fools on me! I’m gonna drive that stupid car until the wheels fall off and never go to a dealer again.

  55. the big things I bought were always carefully thought out, it’s the little things (CDs, clothes, shoes) that sunk me. the tragedy was not one or two big purchases gone wrong. It was debt from a thousand little cuts

  56. I have no idea how many thousands of dollars I spent on clothing, concerts, and road trips in my 20’s.
    I am 30, single and have $34,000 in student loans (paid off $9000 in the past year). While in school I’d alternate between frugal living & binge buying/consuming/travel/boozing.
    I’ve been trying to track finances and smooth out these habits. I had been on track until last month when I bought myself into $1300 of cc debt (my visa is usually in my freezer). It’ll be paid off in a few days but now that money won’t be going onto debt or into savings.
    Learning…learning….

  57. Hey J.D., glad I could help! 🙂

    Incidentally, I think it’s very sad that so many of us feel we overspent for education. I was fortunate to get a full scholarship for college and made it through grad school with only a couple thousand dollars of credit card debt (believe it or not, better interest rates on the credit cards than on the student loans – would have had to be private – I otherwise might have taken).

    And sympathies to all those who feel they overspent on cars. We kind of did too (leased then bought) but it worked out ’cause we love the car and will keep it till it falls into little rusty bits.

  58. I totalled my car – which I still owed about $2K on – and bought a new car. For reasons that I can’t begin to explain in a way that makes remotely any sense, a year later, I traded in for another new car, and a year later, another new car. This left me pretty far upside down on the car loan.

    A year or so later, a mere four days before I was planning to drive across the country to relocate, I was rear-ended. Drive-able, but not with stuff in the trunk. On moving day, when I woke up with a flat, I decided to leave the car behind (at a friend’s, with permission), get it fixed and sell it from cross country. Rented a car for the drive. Friend lent me $8K to pay off the car; sold it for $5K.

    In my new digs, I travelled exclusively by bike and public transportation for a year and a half, until a colleague was selling an almost-new car (with warranty still on it and only 7K miles) for $4K. Bought it cash. Still driving it 6 years later. Much smarter now 🙂

  59. @chacha1 — in my case, I was fortunate enough to emerge from college and obtain employment which paid enough let me pay off my loans and live on my own. The education was a good one, and people do recognize the school by name when I mention it now (although the tuition has grown MUCH larger). So it’s not all bad news and gloom and doom. I wish that I had walked into it with my eyes more wide open, though — for example, if my parents had been able to show me what things would look like post-graduation.

    The state college also has great name recognition for obvious reasons (midwestern NCAA powerhouse sports teams), but also they are well known and respected for their technical and engineering programs.

    Whenever my daughters go off to college, having this experience we will be better prepared to mentor them in the many ways in which a college education can be obtained. There’s no question in my mind that my college education has helped me increase my income. I could not have entered the work force doing the kind of work I do with only experience or a high school diploma.

  60. Great stories.

    My biggest money mistake was to take out enormous student loans for an MBA (over $50k) and, once I graduated, pay the absolute minimum possible while I had a high-paying job. I mean, why not? I did work hard for two years while I was in school and “deserved” to live well.

    10 years later, I’ve gotten out of the corporate world and still have over $20k left to pay, but now on a much smaller salary. But with the help of GRS, Dave Ramsey, Suze Orman, etc. I have seen the light. I already have saved a 6 month EF, will have the last student loan paid off within one year, and my HELOC one year later.

  61. I would have to say our worse decision was not get married until after I graduated from college. I didn’t go to school until I was 23. I met my husband my freshman year as he was working in the college’s IT department (He was 28 at the time and also a graduate of that college).

    We moved in together 6 months later and bought a house 6 months after that (the beginning of my sophomore year) We knew we were going to get married, but both felt it was best to wait until I was done school. We were so afraid of what our parents would say about us getting married before I finished and we were “established”.

    We also talked about going to the courthouse to get married and just not tell anyone. But once again were we so afraid of how mad our families would be if they found out.

    Fast forward to the present…..had we gotten married in my sophomore year (age 24), I would have been eligible for free tutition staring my junior year. We could have saved 2 years of tution. Instead we paid for 4 at $30k/year. We paid as much in cash as we could throughout the year so the end balance of my loans when I graduated was approx $60k. (I don’t miss those summers of working double shifts as a waitress 6 days a week:)

    Morale of the story is that we now do what is best for US, as a married couple….oh and paying down my student loan in the meantime 🙂

  62. I’ve shared plenty of stupid things I’ve done in the past, but I can relate to the computer mania. I used to have a custom PC, constantly upgraded with the latest and greatest processor, memory, video card. I thought it was fun at the time. Sure, it was a bit expensive, but it was never the biggest of my problems.

    I got bored with it, though. Now I don’t even own a computer, I just use the ones my work supplies. If they break, they get fixed or replaced for free. I just ordered an iPhone earlier this week, but I bought a used one off eBay because I didn’t want to commit to a two-year contract. Maybe in two or three years an iPad will seem compelling, but for now, I can wait.

  63. My mistakes have all involved either hiring the wrong people or trying to do everything myself. I estimate they’ve cost me over $250,000 in total. Now, of course, I am a huge advocate for hiring out lots of stuff (including accounting) and hiring the right people–even if they cost a bit more!

    I get around the gadget lust by buying a new “X” (desktop computer, laptop computer, cell phone) exactly every 24 months. My month is May for computers, and I alternate desktop and laptop. So last year I bought a new laptop, and this May I’m able to buy a new desktop if I wish (though I might hold out a bit.) Cell phone is every 2 years January; that came up this January and I replaced a Sprint Palm Centro with a Verizon Motorola Droid.

    The “every 24 months” rule keeps me from buying needless Stuff (with a capital S, J.D. 😉 just because it’s the hot new thing.

    -Erica

  64. I’ll speak for the wife on this one — her biggest mistake would be to transfer from Small State Law School to Big City Private School for the purpose of seeking employment in Big City. It’s 2 years since she graduated, and we’re leaving Big City for jobs in Small State instead. Tuition at the state school was $5,000 a year, tuition at the private school was $25,000+ (I don’t even WANT to know the exact amount). Now here we are with $100,000 in student loan debt and back where she started.

    Kids, don’t spend too much on college. If you can get into a TOP school, then maybe it’s worth it. But unless it’s Harvard or something, just stick with the cheap state school.

  65. $5,000 at Sephora in the past 6 years. I bought barely anything since 2008. It was frightening when I added it all up (I purchased most of it online).

  66. whew, wow – let’s see

    got credit card in college, spent entire balance within a few months, mindlessly paid ONLY minimum payments for years,eventually i did not have the funds to pay the card, sent to collection agency, settled debt years later

    lost graduate scholarship because it was contingent on me going to school full-time, could no longer afford full-time study, i should have faced that reality and applied for the part time program, scholarship monies were available for that as well

    not educating myself about personal finance, so much of it is not intuitive if you were not taught or exposed in your younger years

    too much take out / entertainment & leisure expenses

    emergency fund – what’s that!?

    i’m in a much better position now, thank God!! – i never want to go back to that helpless, hopeless, stressful place again

  67. The first stupid thing I remember doing with my money was to spend all the money my parents gave me for a field trip even though I didn’t see anything I really wanted. I learned I could have saved it to spend on something better.

    The second stupid thing: I routinely saved my allowance until my parents would “borrow” it and never pay it back. I actually learned nothing from this experience. I still like saving money. I did eventually develop two rules for borrowing, though: 1) I won’t lend you money if you still owe me from last time. 2) I won’t lend (or give away) money for short-term solutions to problems. I’ll do it for short-term fun (like family vacation) or long-term fixes (like first and last rent at a cheaper place), but I won’t help you put off foreclosure or bankruptcy by another month.

    Other regrets: I should have taken the second loan they offered me my senior year in college (instead of refusing it), invested it in a CD, and then used all that money and the interest I had earned to pay back that loan and more. I should have taken that Y2K job fixing COBOL code–even though I wouldn’t have loved it and it wouldn’t have lasted–it would have paid awfully well and brought me a lot closer to early retirement. I trusted a real estate agent to recommend an inspector when the inspector recommended by a friend couldn’t make it before the closing date; I totally lucked out in that my house was in decent shape after all, but I remember reading later that you shouldn’t get just a check list like I did. Oh, and I should have checked where the actual 100-year flood plain was–I was smart enough to find out that my house wasn’t in it, but it turns out that the edge of that flood plain is my back fence. On the other side of the fence is an apartment complex with a very flat (and non-absorbent) parking lot–I don’t see how they can flood without me flooding, but at least my insurance is cheap.

    I’ve also made mistakes that I don’t regret because I got lucky or I can’t think of an alternative that’s much better.

  68. Great story J.D.

    Mine goes back to when I was a somewhat professional musian. When I left my most successful band, I decided I wanted to set up my own studio and do MIDI/Sampling and hard disk recording. This was in 1992, and as such, the state of the art of these tools hadn’t come anywhere near where they are today (and they were about 10 times as expensive, too). I financed somewhere around $10,000 over the course of a few years to get all of the pieces, and I willsay that at the end of the acquisition spree, i had an amazing studio, with a custom built rack mounted PC for good measure.

    In the almost 18 years I’ve had all of this gear, truthfully, I’ve written about 4 songs that actually used the lions share. that works out to about $2,500 per song written. So totally not worth it.

    Later on, I did get some additional use out of the gear as a portable P.A. system and mixing rig for events I did with the Cub Scouts and the Boy Scouts, but for most of the past 15 years or so, the gear has just sat and collected dust. My little, cheap Fender Telecoustic guitar, however, has been at arms length on many days, and I’ve loved to just pull it out and play for the fun of it. The rest of the stuff? Way too much work to hook it all up and get any use out of it.

  69. My brick wall was my complete utter stupidity regarding my credit card… Thank god for limits..

    In my first summer after my first year of college I took to the nightclub scene like white on rice. I actually would take cash advances at the ATM in the bar ($2.75 ATM fee) to have a good time. I did this until one day, it rejected me… $2500 limit reached… I am sure every dollar cost me two using this method.

    Me meet Turning Point.

  70. Ah, these are fun to read. My most expensive mistake: buy mutual funds in 1998, I think, in a fund I didn’t understand. It was a contrarian fund and my friend said it was doing well. Yeah, real well – by the time I closed it a couple years or so later, my money had been slashed to about a third. I a) didn’t understand my purchase, b) didn’t track how it was doing, and c) let my money ride that dying horse for far too long.

    My other one: I had an investment account with Schwab. Sold the stocks and paid off my credit card debt – yay me! It happened right before the tech bubble burst AND I got laid off, so that was good. The bad thing was that I left a small balance in my Schwab account, about $300, and didn’t notice that they were assessing a $25/quarter fee for my low balance. I realized it after losing $75, closed my account, will never forgive them, and tell everyone I know who is thinking about opening an account NOT to use Schwab.

    So in both cases, my real guilt lay in not paying attention/acting in a timely fashion. Isn’t that what most of us get bitten by?

  71. My biggest financial mistake so far have been my 2 student loans. I was in the military and decided to start taking classes but I hadn’t gotten my Tuition Assistance approved before the semester began. I was excited to begin so I just took out some student loans through Sallie Mae and it never occurred to me to follow up with my counselor about the TA. My procrastination got the best of me and I never got the TA approved so here we are 4 years later and I’m still paying off the student loan. I will definitely not make the same mistake next year when I use my GI Bill to go back to school.

  72. My regret: grad school (M.S.) immediately after getting my second B.S. It’s in environmental science/engineering so it’ll probably pay off in the end, but I’m still rolling the dice on it and hoping to not end up with snake-eyes.

    In the meantime, I’ve accrued $50,000+ in college loans. I have plans to pay this pile off in 5 years or less, but we shall see how that works out.

    Education is important, but I’m wondering if I should have waited a while and completely paid off the relatively small 2nd B.S. (~$13,000) before getting in deeper.

    Oh well.

  73. I am a Apple stockholder and huge fan of it’s products. With that said, I think the main questionable thing you did was buy an iPad without it being released yet. I would never buy any major product before it is released and I have a chance to try it out. Further, I want it too be out a month or so to catch early production issues that get worked during that period.

    Don’t get me wrong, I think the product will be great. I, however, don’t get the rush even though as a stockholder I appreciate it.

  74. I’m decluttering (again), and right now I’m getting rid of two gadgets that I’ve literally never used: a USB fingerprint scanner and a Palm Vx modem.

    I think it’s significant that I bought them both on my credit card: that allowed me to instantly indulge my whims, because I could easily “afford” them. Now that I’ve paid off my debt, and I’m saving up for things, that’s made me much more selective about what I buy. In particular, I now ask myself “Do I really want this now, or can it wait until next month?” Basically, I have a list of stuff that I want to buy, and by the time something reaches the top of the list I can be pretty confident that I’ll actually use it.

  75. Hmm – it never occurred to me that anyone would pay my college tuition but me, so I did. Does that make me smart or dumb? Went to a competitive state college, and paid my tuition with the cash I earned working. Could not have done it without free room and board from the folks though. As a result, I’ve only recently gotten to know about student loans and financial aid. And those are just concepts that apply to other people.
    Never had a financial meltdown – smart. But shopping after cocktails and buying stuff like the pink leather pillow in Portland – we’ve all had our dumb money moments. But if we’re here at GRS, then there’s hope yet!

  76. Money Mistakes and Purchases I regret – so so many!
    Buying in to a multi-level self improvement program named Delfin on a recommendation of a casual friend -$1200

    Buying a new Honda Prelude when they were the hot thing – and waiting for months to take delivery

    Allowing a male friend to rack up tens thousands of dollars in loans which he had no means (or intention) of repaying

    When between jobs, spending money as if I were working

    All the money I drank away, smoked up, and ate

    While working for MCI, I invested 15% of my income on company stock…and continued to hold on as the company went down the toilet

    Letting my mortgage run into negative amortization just for convenience

    i could go on but now I am debt free and live totally within my means…financial freedom feels so good!

  77. The dumbest thing I have ever done is to let one payment slip by on my credit card. The reason I say this is because when nobody came to shoot me, I thought it was free money. Luckily, all of my big purchases have been in cash, but it doesn’t mean that the small ones add up!

  78. I didn’t do very many big stupid things. One regret that comes to mind is when my husband and I put an offer on a home. We decided it was too much for us, but not until spending a pretty penny for the inspection and loan application. Also, a financial advisor told me when I was 20 that it would be a good idea to open a Roth IRA. That was the stupidest thing I DIDN’T do.
    The smartest things I did were going to community college, then in-state public university, living with my parents while saving and having a first credit card that I paid in full every month (having a $200 credit limit helped).

  79. My stupidity:

    My parents paid most of my college tuition, and I busted butt to finish early and save them dough. At the end of my junior year, I checked in with my advisor and he said I could not double-count a course for credit towards my minor and towards my gen eds.

    I never questioned him, he was wrong, and it cost me an extra semester. I finished college in 7 semesters when I could have been done in 6.

  80. I’ve had some pretty dumb investing mistakes in the past. Nothing catastrophic, but there were investments I made that I didn’t understand as well as I thought I did.

    Although they were definitely mistakes, they’re not the kind of mistakes that I’m sorry I made. I learned a lot from them, and they’ve made me a better investor. I view those poor investments as “tuition” for my experience and growth.

    From looking at these comments, I’m noticing a lot of people were annoyed that they went to private universities instead of state schools. I can’t really say the same- I went to a state school and ended up $45,000 in student debt upon graduation, even after living extremely frugally and working several jobs. The school had lower tuition but virtually no scholarships (at least for a while male). I mean, I got a trifling small scholarship for being near the top of the class, but that barely even covered the annual tuition increase. I consider this a mistake, though I’m not sure what I would have done differently.

  81. Thanks for all the stories. I’ve paid off my credit cards but got caught by a fast-talking salesman into getting loans etc to take “courses” online thru University of Phoenix so I could qualify for a work/study job at a company I wanted to work for. Got accepted only to be told U of P refused to work with the program, (“we’re for working adults,” I was told) so I lost out on the job and but still had the 3500.00 debt for 4 “classes.” It went to collection while I was ill and on disability, so now I have to deal with all that. For that money, I could have taken real classes at a local college, and qualified for the work/study.

    I was thinking of getting a credit card to use just for ordering online (since brick stores have such poor selection and service) with a 150.00 limit to minimize risk from identity theft, but my bank won’t issue a card for less than 500.00 balance and I don’t want that.
    I’ve just realized what I could do is open a new separate savings account with a 150.00 balance and use that debit card to shop online with. Problem solved!

  82. Your mistake is not considering all expenditures as investments, including gadgets. It’s not grade school anymore where latest-cool somehow gives you meaningful status.

    Why do you need the iPad? Why do you need an iPhone? What problem does it solve for you NOW? What is the opportunity cost of spending on the gadget instead of saving it for something else possibly more important? These are the questions that weren’t answered and hence our huge financial meltdown with people buying what they don’t need nor afford.

    I take myself as an example, I have not purchased a new laptop in 4 years until recently. Any gadget purchasing (such as fancy phones) were also resume building as well as programming experience which generated their own revenue multi-fold. I did not upgrade to any fancy flat-screen until my cheap and ancient crt HDTV broke down. The only debt I have is mortgage.

    I’ve avoided PCs and Macs until my ancient Apple IIGS couldn’t keep up, so then got myself a cheap PC and built BSD experience on it that paid for itself in jobs. Built myself a fancy Athlon afterwards that again was a tool for technical and investment assistance. Avoided the entire Athlon II, Core/Core2Duo generation, any Nvidia past GF4 and only focused on purchases that would pay for itself. Now I’m on a i5 laptop upgrade which again will pay for itself as an investment tool and more technical resume building.

    I have never purchased an Apple product unless as a gift, strictly avoid any first-gen items esp from Apple, avoid the Apple premium prices, and live within my needs reality bubble. I strictly buy full-price off-contract equipment for the long-term savings.

    The money not thrown into the gadget black-hole was invested in 401K, Roth IRA, mutual funds, high interest savings accounts, etc. I software track money and project 2-10 years OUT so I can made monetary adjustments NOW instead of when it’s too late.

    My mistakes were not learning about tracking and performing extended expenditure projections before meeting and spending on women. They can be the death of any savings plan. The jewel is one that doesn’t need constant monetary feeding. So once one buried my ass into massive debt, I’ve dug myself out within 4 years with hard-core buckling down through tracking and projecting, intelligent refinancing, and justifying purchases for their cost-saving or investment values.

    Once you find this Zen of not wanting, but only fixing, or investing, properly can you get rich slowly.

    It might really help to play some resource-based games where success is dependent on you hording, and planning expenditures wisely in advance.

  83. I’m with #48. If I went on about all my stupid financial mistakes, I could be typing all day long!

    Over the years, I’ve come to peace with the fact that I’m prone to making stupid financial choices. Instead of either (A) perpetuating them, or (B) beating myself up over them, I’ve learned to (C) plan ahead so that I can be responsibly irresponsible, lol. 🙂 Now I just make sure to budget a small amount that I can use for my whimsies, so that I can indulge without seriously harming my overall financial progress!

  84. I had just purchased my first home in 2006 and started checking out new furniture (of course you need new furniture for a new home duh). I had a perfectly lovely, beautifully made and comfortable purple sofa that I bought at a garage sale from an artist for 600$. But I fell in love with 2 chaise style knoll fabric designer couches on Craigs List. For 2400!!! Why why why? They don’t fit the space well, they started to show a ton of wear and tear and are no where near as comfortable as my old couch. My old couch ended up at Salvation Army so hopefully someone esle is enjoying it now 🙁

  85. My biggest mistake was spending in college like I already had the job I expected to get when I graduated. Then I decided to change fields to pursue my passion, which is in a much more competitive field with significantly fewer job opportunities. Now I’m saddled with $40k in student loan debt (luckily, $30k of it is at 2.5%) and $13k in credit card debt (luckily at a “reasonable” 12%), which I’m slowly paying down at about $50 over the minimum each month.

    I’m still in school with my loans in forbearance, but I’ve since realized I had my fun, and now is the time to make sacrifices to set myself up for a better future. That $300 credit card payment makes life so much more difficult. Between school and side jobs, I’m pulling 70-hour weeks. It’s frustrating seeing my peers spend frivolously, making the mistakes I made 5 years ago, but I’m smart enough now to know that nothing is guaranteed. I’m better off living as cheaply as possible now and in the future when my income increases until my consumer debt is down to manageable levels.

  86. My biggest money mistake was getting sold on a timeshare vacation. Yikes! It never saved me any money as it promised.

  87. I’ve made some really bad money decisions. Here’s a short list:

    1. When I was 19, I had a fantastic summer job that paid me a few thousand dollars. I didn’t know what to do with the money so I went to the bank and asked for advice. They told me about mutual funds and tried to get me into a fund that had a 5% front load. I said, “No way!” and instead I spent all that money on dinner, movies and dates.

    2. When I was in graduate school, I always picked up the tab at bars and restaurants when my friends went out in a group. People put in cash to cover their share of the meal or drinks, but somehow the cash ALWAYS was only about 75% of the total bill. Whatever — I signed the check — and then promptly spent the cash on something else.

  88. I didn’t buy any particular thing. I just spend money that I didn’t have on nights out, gadgets, books, travels etc.
    Late in my studies I realized that those loans needed to be paid back when I graduated, and I could feel that I had very little control over my spending habits. So I purchased (and still use religiously) YNAB and read a lot about money on the Internet and in books. Now I’m almost done with the master’s thesis and I have a much better grip on money. The loan still needs to be paid back but I have already started repaying and I know that I am equipped to live my future life without collecting more debt.

  89. Among the dumb things I’ve done, right up at the top of the list would be the way I behaved my first year out of grad school. I had a salary coming (but it didn’t start till September), so that summer before I lived partly on my credit card. Then I let my then-boyfriend talk me into taking a vacation together before I moved — not extravagant, but the $1500 or so was money I did not have. Then I moved into a new apartment and bought furniture — not a lot, but a sofa, a DR table, a rug — on credit. Then at the end of the year I took a wonderful three-week trip to Spain, also paying for it with credit. The whole time I was thinking, “Well, I’ve got a salary now, I can afford this. I’ll be able to pay it off.”

    When I got back and took a deep breath and opened up the envelopes and totaled up everything I owed, I had run up more than $8K in one year — more than I could pay off by selling the few stocks I’d been holding since childhood. I had negative net worth. Boy, did I feel stupid.

    At that point I learned about budgeting and the envelope system. Paid the debt off in 18 months and have learned to save ahead for regular expenses, put money aside for special purchases, etc. I still remember how proud I felt when I bought a new mattress with cash (in contrast to my earlier furniture purchases on credit). I felt good about myself every time I walked into my bedroom — and I slept soundly!

  90. Need or Want, i ask myself this question myself many a times before i buy and i do not try to keep up with joneses.

  91. Hey JD.

    Don’t feel so bad. Sure you just mentioned a pretty bad move with the cash advance mutual fund purchase and subsequent divestment for a Mac Classic II, but remember. Failure isn’t the making of the mistake. It’s not learning from the mistake. I know you’re much better at implementing tips on budgeting, and thank God, very good at sharing them.

    I’m thankful to hear that I’m not the only one who’s make the unwise purchases.

    I know you’re doing really well now, and I’m glad to see that there is a light at the end of the tunnel even for people like us who make mistakes.

    cheers,

  92. I was 20 and out of school so I was no longer on my mother’s health insurance plan. Because I started a job that didn’t give benefits for the first 90 days, I was without insurance for a bit (didn’t qualify for a private plan). Long story short, I got sick and when the bill came, I put it on a credit card instead of working out a payment plan with the medical billing company. HUGE mistake!

  93. See, this is what I don’t get — you’ve seen the past mistakes, you acknowledge that the iPad may very well be a mistake, but you’re still buying it because you have the cash saved. It’s better than buying it on credit, but not better than trying to break the must-have-the-cool-new-thing-now-now-now habit. People buy expensive stuff all the time just because they can, and GRS readers do plenty of finger-pointing about that. How is this not the same thing?

  94. Hey there I am a 20-y.o. student and investor and must say I really enjoy reading articles on your site. I have worked for the past 2 years trying to save up and avoid debt (my parents are still in debt and I realized I don’t ever want to be financially insecure). I am happy to say I am debt free and ~$17k in my brokerage account, $3500 (so far) in my Roth IRA (I opened it 6 months ago), $2000 rainy day savings, and a $1000 car that gets me from point A to point B. While my income is low (less than $10k a year), I have made some money from investments as well as personal business income. I have always been a saver, but the iPhone has been one device that has been a “must have” for me, that outweighs my desire to keep the cash. I of course buy these devices with cash and I am truly tempted to get the new iPad too. I’d say my biggest blunder was speculative investing when I first opened my brokerage account in 2010. I have been in a few “penny stocks” that have gone way up and way down and was lucky to get out of these trades with only minor losses. I decided speculating wasn’t for me and sold these positions before I got into real trouble. While I didn’t have major losses from these stocks, really all they did was hold my money up from good, worthwhile investments that could have easily netted me respectable gains over the last few years. My goal is to have a net worth of at least $100k by 25, and be a millionaire by 30. I think my goals are ambitious but possible. I hope to retire and be able to live off dividends by then. Do you have any advice for someone my age to reach their financial goals?