When I look back on my financial life, there are a lot of things that I’ve done that I should’ve done differently. I’ve made bad decisions about money, that ended up causing me a lot of financial grief in the long run.
Everyone out there probably has a few of these “shoulda, woulda, coulda” finance moments of their own, and today I’m going to list a few of mine. Maybe it can help someone else to not make the same mistakes.
Here Are My 5 Biggest Money Mistakes
- Not starting to contribute to my 401k sooner: When I first entered the work force the company I was working for offered a 401k plan that allowed your contributions to be deducted pre-tax from your paycheck. I didn’t do this at the time because I would rather spend the money on things like going to the bar, hanging out with friends, etc. If I had instead invested that money in my 401k, I would be thousands of dollars ahead today. I eventually wised up to this and started contributing to my 401k, but I wasted a lot of money that could have been compounding interest.
- Getting a credit card in college… and using it: While I was in college I gave in to the temptation to get a credit card. They were giving out these great t-shirts at my college when you applied, so how could I refuse!Now buiding your credit isn’t necessarily a bad thing, except that I decided to use the credit card for things I didn’t need. I used it for trips, nights on the town and for buying CDs through Columbia House (we didn’t have MP3s back then kids). Luckily I didn’t get so in over my head that I wasn’t able to pay it off, but again there were thousands of dollars spent there that could have gone to savings.
- Getting more student loans than I needed, and spending the money on frivolous things: I paid for my college experience through grants and student loans. My only regret is that I probably got more student loans that I needed. After paying for my classes and room and board expenses, I found I had quite a bit of money left over. Instead of saving it or using it to pay off other debts I used it to have a good time. I bought a new computer, video games and a new stereo VCR! If I could do it all over I would have applied for less in loans, and not have spent the money on all the junk.
- Buying too many expensive gadgets: I have a weakness for expensive gadgets, whether it is the newest gaming system to the hottest new widescreen HDTV. When I was single I was indulging in these purchases a lot more than I am now, and it probably kept me from saving a lot more than I could have.
- Eating out all the time. I mean ALL the time: This is one that I struggle with even today. Just last month my wife and I spent $600 eating out while on vacation for 5 days! Obviously that money could have been much better spent. (For the record, we were in San Francisco, and it was very expensive to eat out there.) My wife and I are getting better with this, bringing our lunches to work, and trying to eat healthier fresh foods at home.
Those are a few of the mistakes I’ve made in my financial life, that I wish I hadn’t. Some of the mistakes we’re still trying to fix.
So now it’s your turn. What are your top 5 money mistakes? (If you post your own five on your blog, let me know and I’ll post an update here on my blog linking to your piece.)
Other People’s 5 Biggest Money Mistakes
(Seems a lot of people thought of this before I did. And here I thought I was original).
- The Wisdom Journal – 5 Massive Money Mistakes I’ve Made
- Bankrate.com – 5 Money Mistakes Even Smart People Make
- Fire Finance – Top 5 Money Mistakes
- 5 Money Mistakes Women in Couples Should Avoid
- Top Five Money Mistakes Made by College Students
- The Top 5 Money Mistakes & How to Fix Them
- Six Money Mistakes of Newlyweds
Last Edited: 26th February 2011