Biggest financial mistake you ever made

[GoodSteward]

I (probably) beg to differ. 0% -- technically 3%, but who's counting -- CC transfers were a serious and darned effective weapon in us digging out of $15K on a 24% card.

The key, of course, is to put that 24% card in the back of the sock drawer. (I'd say "never to be used again", but my wife has had that card for 20+ years and doesn't want them to close it from inactivity. So every few months we make an on-line charge with it instead of the regular card.)

My statement was based on money habits being the root cause, not an interest rate. The difference is that you apparently changed money habits (awesome!). I also was able to use the other card to go from several cards ranging from 12%-29% interest to a single fixed 3.99% until paid off card. I put almost 12k$ on it, then decided I "needed" to use the other cards again for other things. Eventually, we owed 24k$. I have also seen, and heard of, many others doing the same thing I have done, but using consolidation loans. If you can stop using debt as a payment method, consolidations can often be a blessing. However, to make sure of it most need to just cut the cards up, and even cancel the accounts if necessary to break the habit. It can be very addictive as a family member of mine should know. "Let me show ya somethan!" (Fire Marshall Bill voice)

I have a close relative where his wife never made alot income over the years. Sub 30k range. She would use the husbands 40k$ salary with hers to keep getting credit cards. She had her bank account, and he had his. They left each other to their own, splitting some of the bills. He racked up some credit card debt, and she racked up even more. Later in life, they handed their oldest a credit card with apparently a very high limit. Told him to make the payments if he wants to use it. Oh he used it. To the tune of 20+k$ over a few years. When he got married, the dad basically picked up the credit card and never made him pay it back. At this same time, he decided to see where they stand together. This is 2 decades of marriage mind you. Altogether they had 120,000$ in credit card debt(including their son) making about 60k$ a year together. They moved in with his mother to help her out as she was getting older ,and it helped them out by losing a rent payment. To this day, he is paying on that debt and has come a long way, however, still so behind he'll likely never be able to save up for retirement now. He only has about 30k his job provided over the years on his behalf into a mutual fund.

Fast forward 10 more years, and he recently found out the wife had started building up a little credit card debt again. He had to put another stop to it before it got out of hand. He basically took all 50-60k of her debt and was paying it for her. She barely gave him anything to help. This is why I say you can't borrow your way out of bad habits. You must change if you expect a change. She thought she no longer had a problem, but the truth was she just wasn't allowed access to a card for years. When she finally got one, it started over. This is why I agree with Dave Ramsey that most people should just stop with cards completely. No rewards, no borrowing to use the cash better elsewhere to invest, none of it. It's simply too dangerous.

Also, the son who never had to take responsibility for his debt continues to make stupid money choices and needs bailing out all the time. One time he literally needed bailing out for a bad check. Ended up getting arrested trying to help a friend get his car out of impound. He had a warrant for the bad check and didn't know it. lol 600$ bail out for a 20$ bounced Domino's check.

[Fishindude77]

Personally, bought some stupid whole life insurance that was touted to be a good investment, leased and borrowed for automobiles, trusted an Edward Jones investment outfit to get me into some mutual funds that were a real dog, etc.

Those personal deals were all pretty minor deals compared to some of the mistakes I've gotten into in business over the last few decades.

[Nutria]

My statement was based on money habits being the root cause, not an interest rate. The difference is that you apparently changed money habits (awesome!).

Still, the undeniable fact is that I borrowed from Peter to pay Paul.

Thus, the real idiom should be, "You can't unchange your habits out of debt."

[LivingAlmostLarge]

Buying a timeshare. young and dumb.

[GoodSteward]

Still, the undeniable fact is that I borrowed from Peter to pay Paul.

Thus, the real idiom should be, "You can't unchange your habits out of debt."

I am not sure what you are responding to since I never said anything against doing what you did to get out of debt. Using a lower interest option is a great way to get out of debt IF you changed the reason you are in debt. My point was that if you have bad habits (aka spending problems) then more money/credit will just make it worse in the end because you will find a reason to charge it up again.

Working with this other company where I got a life insurance license, I also learned about this subject more. They used to offer a consolidation loan to people but stopped because it was just creating more problems for them because they kept going back to cards PLUS having the loan. Credit card debt is rarely due to a one-time deal. It's almost always a series of purchases or even years of purchases that keep building up. This is a bad habit to get into, and even harder to break. Dave Ramsey has seen it thousands of times, and it is why he pushes no cards. The only way out of that mess is to change your spending problems, or whatever bad habits put you there.

You are putting words in my mouth that I didn't say, and no offense but I have read your idiom several times and I just don't get it. haha Sorry.

[GoodSteward]

Buying a timeshare. young and dumb.

I looked into this before. When I realized it was just a week or two that you are buying I immediately rejected the idea. I am amazed at how much money people will spend to buy a WEEK to have a time share. Then you have to help pay for upkeep, storm damage, etc. No thank you! It's like payday lending for real estate to me.

[sv2007]

I have made numerous financial mistakes over the years.

The biggest one I can think of is when I consolidated my student loans. I was young, just out of college in the 90's and interest rates were through the roof, at over 9%. I had two different student loans. I don't remember the specifics, but I consolidated them to get a better interest rate. I was able to lower the rate down to 7%. I thought I was getting a good deal. Then I later found out that the rate was irrevocable. I was infuriated. I bled money in interest for a long time. I tried to get the rate changed/lowered, but was denied again and again. I even considered taking out a bank loan to get a lower rate. Once I started making more money I paid the loans off furiously until they were done. That's a big pile of money I lost out on over the years with student loans because of bad decision I made.

With that said I was hoping to hear from you. Maybe you received a bad deal on a house or car you purchased, or you invested in something that didn't work out. Maybe you were somehow ripped off or you ran up a credit card(s). Maybe you bought something that you couldn't afford. We can all learn from each other here from our own mistakes.

What if the interest rates went up ? Would you then be writing love letters to your lender? : ) Nobody knows which way it'll go; so one must make financial decisions without getting "infuriated".

Let's see, our worst move was probably the time when we wanted to save a bit of tax and lost $1m instead. That's taught me somethings which probably paid itself off over the years.

[msomnipotent]

I have made a metric butt ton of money mistakes. Every one of them stung, but I haven't made the same mistake three times. Yeah, sometimes it takes more than once, especially when you trust people.

I would say my biggest mistake was a toss-up between trusting my husband to make the decisions and not forcibly taking the reins sooner. I'm edging towards taking the reins.

My second largest mistake involves a time share, but I am legally obligated to not say anything bad about Silverleaf.

[dawnwes]

I have made a metric butt ton of money mistakes. Every one of them stung, but I haven't made the same mistake three times. Yeah, sometimes it takes more than once, especially when you trust people.

I would say my biggest mistake was a toss-up between trusting my husband to make the decisions and not forcibly taking the reins sooner. I'm edging towards taking the reins.

My second largest mistake involves a time share, but I am legally obligated to not say anything bad about Silverleaf.

That made me LOL.

[dawnwes]

I haven't made a huge one. I have made a lot of small ones. Still do on occasion.

[GoodSteward]

What if the interest rates went up ? Would you then be writing love letters to your lender? : ) Nobody knows which way it'll go; so one must make financial decisions without getting "infuriated".

Let's see, our worst move was probably the time when we wanted to save a bit of tax and lost $1m instead. That's taught me somethings which probably paid itself off over the years.

1 Million?!! What do you do for a living?

[GoodSteward]

My biggest financial mistake was allowing myself to believe the garbage about finances my family was spewing out, even though they didn't mean to teach it that way. Credit cards are a way of life, the only savings I knew of was from coupons, everything is bought on payments, don't worry about retirement God and the SS got your back!, and investments consisted of buying stuff a little better than the lowest so it lasted longer and was sorta fancy. I had no idea about life insurance until many years after marriage. lol

I do not blame them for my choices, but I am aggravated that to this day I am the only one among them who really cares about this stuff.

[sv2007]

1 Million?!! What do you do for a living?

It was the biggest mistake we made. It involved some company options and a time limit on their exercise; it taught us a few things that's worked out well in the later years. So, I guess it can be call tuition.

We are very ordinary people with ordinary jobs; never extremely lucky but slow and steady wins the race.

Frankly, I'm a bit surprised at the small financial costs of the mistakes listed here. Even among my friends, I'd bet there are many > $1m, just during the tech boom, so many had multiple millions in paper value.

I think there is a slight disconnect in that it seems most forum members don't make/save too much money, but there must be a few who's gone thru the tech boom of 2000? Where money was like free and life was good with 6.75% mortgage; where today's "old" techs were stock splitting almost every year (i.e. pretty much your $ doubles each year). During those times, mistakes can be high $ but may not hurt as much.

[Nutria]

I think there is a slight disconnect in that it seems most forum members don't make/save too much money, but there must be a few who's gone thru the tech boom of 2000? Where money was like free and life was good with 6.75% mortgage; where today's "old" techs were stock splitting almost every year (i.e. pretty much your $ doubles each year). During those times, mistakes can be high $ but may not hurt as much.

I didn't have much to invest back then, and being in the tech industry, I knew that it was an irrationally exuberant bubble that I didn't want to gamble in.

[disneysteve]

Even among my friends, I'd bet there are many > $1m, just during the tech boom, so many had multiple millions in paper value.

I think there are very few forum members who have that kind of money. There a number of folks here with net worths of $1 million or more but very, very few multi-millionaires. I don't know that there's anyone rich enough to be making mistakes that cost them over a million.