Your Biggest Money Mistake
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All of us have made mistakes. I’ll hazard a guess that most of us have made some money mistakes.
Whether it’s a lack of budgeting (been there), spending more than one makes (been there, too) or poor investments (ahem), you’re probably not alone in having had some red on your ledger.
FishBoy13 asked me about the stock market crash today. That led to a conversation about investments and speculative financing. Of course, the topic of our rental house came up. It probably ranks very near the top, if not the pinnacle of financial mistakes we’ve made over the years. And we’ve made plenty of them. It’s the one that continues to hound us.
While I would advise most people against investing in rental property, there are probably plenty of people who do really well in that business. More power to you!
That has not been our experience. There have been a series of tenants over the years who have flaked on paying rent, trashed the house, stolen the appliances, and otherwise left us with thousands of dollars in clean up and repairs. When the court won’t enforce a ruling, there’s really nothing you can do. Especially when said person skips town.
If you rent, I recommend that you not assume your landlord is sitting pretty. That certainly has not been the case for us. We have lost money on this property every year since we bought it in 2005. If it wasn’t a bad tenant, it was something breaking or a roof that needed to be repaired. Currently, we owe more than the house is worth. Once the market and our mortgage match up, we’re selling as soon as you can say, “How much?”
That said, I’m thankful that we have (mostly) gotten our finances in order. God has been very gracious. We only invested in one measly rental property, instead of the dozen that we once dreamed of. One headache, not twelve. I’m sooooooo very thankful for that.
I can manage this, as much as it stinks. I can do this. We have a good management company, our personal finances are in order, and we’ve got a plan to fix this mistake as soon as possible. It still stinks, but it’s doable.
Have you got a money mistake to share?
No judging allowed. Just a chance to know you’re not alone. Tell us your biggest money mistake. If you solved it in a great way, share that with us, too. We can always use a good redemption story!
This is Frugal Friday. In an effort to make these weekly financial discussions more interactive, I’m no longer posting a link-up. Feel free to leave a link in the comments. But better yet, chat with us on today’s topic.
Not saving more when I was single or newly married without kids! We didn’t over spend, but we didn’t save seriously either. Now, with kids aged 16 – 21, we are very frugal, which makes us realize we could have saved much more for their college educations and our retirement!
I hear ya. If only I knew then…. right?
I’m so glad you posted about this. We are in the same situation with a rental property, and trying to sell it while tenants are in place.
I think my biggest money mistakes are always related to men. I had a long-term (co-hab) boyfriend many years ago who didn’t pay for a single thing, and when we split, I was left paying for 6 months of rent, and $10K of debt I accrued while with him. I also did it with my ex-husband…ended up walking away paying for everything, when he was the one with the job. But like you said, a court order doesn’t actually make the money land in your lap. My take-away is never invest too much of yourself (or your money) into any relationship, LOL!
AGREED. I didn’t post about my personal relationship-financial failings…. but I was also in two relationship where afterwards I was left with a big pile of debt to crawl out from under. It took me working 2-3 jobs while in college and eventually sitting out of school a few semesters to pay it off. I’m sooo sorry that it happened to you
From that I learned to ALWAYS have separate checking accounts. The husband and I each have a personal one and we have one joint one that all bills get paid out of. It took me four years to get to this point, but we both have the others information for the personal account in case of some weird emergency, but we would (hopefully) never spend each others money….
Yes…Hubby and I have had separate accounts since day 1. He can squeeze a penny & I was quite the spender. We each have certain responsibilities and when necessary will float the other. Might sound odd but its really worked well for us AND showed me how to be fiscally responsible … my upbringing was paycheck to paycheck and spend spend spend. We moved every year most likely for nonpayment of rent. Yes my parents were “those” tenants 🙁
I have a ‘young adult’ and a current one for you
When I lived in Manhattan many moons ago, I had to take my basset hound to the vet. In case you couldn’t guess, most cabs are unhappy to take a wet basset hound in their car [it was raining] so I grabbed a bunch of cash and tied him to a stop sign while I hailed a cab. They cannot reject you once you open the door, so I opened the door and went to untie my dog while the driver complained.
I was stressed already and counted out money for the ride – I had my big wad of cash in one hand and cab fare in the other . . . and mixed them up when I left the cab without checking, distracted by rain and basset. I must have paid 300 for that 10 dollar cab ride.! AUGH!
But as a real adult – yes, similarly a rental is our biggest mistake and money hole – DH invested some money and signed a mortgage with a friend and the friend’s friend . . . and it has required us to pay in every single year to cover the mortgage – I budget for it – but it drives me nuts, no one will buy it [who would?] and we’re stuck – fortunately it’s not too big a hit considering how our income has grown – but it’s still aggravating.
There are so many to choose from! The biggest one was probably using credit cards when we were first married to buy anything and everything we wanted. I guess we thought we needed to live at our parent’s standard of living even though we were still in college and so very young. We racked up about $20k in credit card debt before we woke up and got a grip. We paid everything off before my daughter was born and then we discovered Dave Ramsey and paid off everything else but the house. Now we are debt free (except our home) and I will NEVER go back in debt again. There is nothing that I want bad enough to borrow money for it. Lesson learned.
This is awesome! Great job Tiffany!
I have made several big mistakes over the years. My biggest one was when I was 17. I lived on my own and I was in college. I had ZERO furniture. I worked a pretty good job, but not great. Instead of buying used furniture, or going on craigslist I went to a rent-to-own place because I HAD to have something new. Ugh. A tv, bed, and sofa cost me “$3500” but really with interest over FOUR YEARS I paid over 8 grand for it!!!! I tried to pay it off early once I had they money, but the penalties and fines in the contract for doing so made it not even worth it….
I learned to ALWAYS read the small print after that. Since then I have probably saved the hubs and I hundreds of dollars by going over EVERY bill and contract so that we don’t get nickled and dimed
My biggest money mistake is taking out student loans. I feel like I will be paying on those for the rest of my life, and I’m a stay at home mom now, so I have never even used my degree. Definately a huge mistake, I definately regret that, and I advise all high school kids, Never get a student loan, it may seem like easy money, but its not worth it in 10 years.
i’m so sorry for your financial reality. i want my daughters to get out of college student loan free so they have options after graduation. it’s very hard work but we’re cashflowing one semester at a time in state schools and community colleges – depending on the kid and their skills.
a few years ago when i was in between part time jobs i sold our toys on ebay, $10 at a time. some fetched upwards of $100 though too.
can you reach out to your friends and offer to sell their stuff on ebay and keep half of the profits? it’s time consuming but being at home full time offers you the flexibility to go as fast or as slow as you need to.
I get you on the loans. I do not want my kids to go that route.
However, I don’t want any mom to think that her education doesn’t have value, especially stay-at-home moms. Your education may not be “used” in a measurable way (I’m a French major, I get this!) but the skills that you acquired and the perseverance you displayed in going to college, those serve you in your day to day, maybe just not directly. I know that my schooling has helped craft my personality and my life as mom. I bet it has for you, too.
So true!!! When I was young and newly married I worked full-time and went to school part-time. I took out student loans every year like I was a full-time student. I used my bachelors degree only one year but because it took me years longer to graduate than the typical student I was burnt out in the profession and quit. I regret those loans every time I think about it.
On a positive note……I’ve started a college fund investment for my 2 kids several years ago. It’s not much but hopefully it will help when the time comes for them to go to college. I never expected (and quite frankly it never crossed my mind) that my folks would pay for my college and with 5 kids it would’ve been impossible. I just don’t want my kids to make the same VERY bad mistake that I did.
Hi Jessica. One of the worst money mistakes I almost made and caught was my math being off in the checkbook by $800. I had always used Microsoft Money as a second resource that double checked our figures. We had a few months that we didn’t have Microsoft Money, as they phased it out, and we were looking for another source to double check our checkbook (basically have an online checkbook) since we don’t trust the bank statements to tell us exactly how much money we truly have in the checking account and how much we have spent. God was gracious to have me find the mistake, but YIKES! Always double check your numbers.
My husband and I foolishly bought a timeshare when we were on our honeymoon. 11 years later, we are still trying to get out of it! We have wasted thousands of dollars on ever-increasing maintenance fees. Yes, we have been able to trade in our week for wonderful vacations at other nice properties but I have heart palpitations each time I have to write a check for another maintenance fee. Hopefully 2014 is the year we can get rid of it! DO NOT BUY A TIMESHARE!
Meagan,
I hope you and your husband are able to sell your timeshare this year!! I know a couple who is trying to sell their timshare as well. I hear it’s a huge headache!
Funny, I *just* posted about a recent stupendously stupid mistake: http://www.chieffamilyofficer.com/2014/01/my-completely-stupid-totally-avoidable-140-mistake-and-how-im-making-sure-i-never-make-the-same-mistake-again/
It’s not my worst mistake ever, but it’s been a few months and I’m *still* so irritated with myself!
My top money mistake was taking out loans for my master’s degree. I will pay off my student loans in under 4 years and I use my degree every day, but it’s definitely not smart to start a career and a marriage in debt.