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.
Just last week I was paying bills online and made a huge mistake. Instead of paying the minimum payment I somehow approved a payment in full (to the tune of $3,800) which was not in my checking account. The payment could not be reversed and we had to scramble to find enough money to cover it and several overdraft charges. Now paying the rest of this month’s bills will be tricky.
Oh my. That would make me sick to my stomach. 🙁 Hang in there!
Leasing a vehicle. Huge, expensive mistake. Never again!
This was a couple of years ago and I took advantage of a “free” makeover at the mall. I ended up spending hundreds of dollars on an entire kit! I mean it was not a huge, huge mistake but it was a lesson on not to let people talk me into things. I ended up not even liking it!
Oh man. We’ve had our share of credit card debt, will be paying off student loans forever, and can’t seem to keep anything substantial in savings.
But, our biggest financial mistake so far is the one we’re living right now. We moved to another state so my husband could accept a job after completing his PhD. We assumed our house would sell no problem, so we rented a comparable house in our new town. 8 months later, we’ve sunk tons of money into it, and it still hasn’t sold. Plus, when it does sell, it will be for less than we owe so we’ll still have to drop more money to get rid of it. And, in order to fund all this, we cashed out my retirement savings. Big sigh.
Our money mistake is getting taken advantage of. Certainly, I’m to trusting and lately its showed alot since we moved to Louisiana 1 1/2 yrs ago. I bought chickens for $25 each. Not knowing what the going rate was i bought 5 & 2 wks later i bought 5 more. Didn’t realize it until 2 months later. Last week , we had electrical work done & realized that a previous repair company we hired over charged us by $1000.00. I have other money mistakes that has happened just since moving to Louisiana but that’s just me complaining more. It’s just sad & i don’t know who i can trust. We have a new housethat needs alot of work done .
Check out Angie’s List – we have found some really awesome contractors from that site. I found a great plumber (only one who was honest enough to tell me that one of the jobs I wanted to have done was something I could do myself and showed me how). I was so impressed by that, I didn’t care that he was slightly more than the others for the one job that did need to get done. I always read the reviews, negative ones too to see if I can spot a trend in what people are complaining about.
We almost made a mistake this week. Our older house has had a lot of updates, but the windows are stil original and quite drafty. A salesman made his pitch and we were very tempted to sign the papers and finance new windows, but, luckily, our willpower to stay out of debt and be more intentional with our money won! I looked up some ways to temporarily fix some of the problems we have and for about $50 we should be able to make them less drafty. I feel much enter about that investment than I did investing in a finance plan!
Good for you! Those sales people are sharks. (No offense to sales people.)
Oooh! I need to do this for our windows too. Our house is awesome, but the windows are drafty and a few of them leak. I figured that we just needed to get them replaced.
Oh jessica ~ dont get me started in 2000 we were going to cash stock to pay our house off but before we followed thru the stock market took a dive we lost all our money and today we still have a mortgage. Then a few years later we decided to buy a cabin in the smokey mountains which we love love love but after the rental company rents it and we pay all the bills from it we still pay about $900 per month. We are trying to sell it but its not worth what we owe on it? UGH. Those are only the big ones!
A few years ago my husband and I decided to move to a new town for his “dream job.” It turned into a string of our biggest financial mistakes. 1) I left my job with just six months to go before I was vested and would have gotten double retirement benefits put into my account. 2) We listened to our realtor and didn’t do our own research and sold our house for a lot less than we could have gotten for it. On a side note, learn from my mistake, realtors just want a quick sale and will try to market your house at the lowest price they can get you to agree to, do your own research and push back if you don’t think what they’re saying is fair. 3) We bought a huge house, in a town we didn’t know b/c we were so excited for how far our money would go. When we decided we had to get out of there (the town and living far away from family was too much) we took a $50K loss on the house (OUCH!!!)
as i read these stories i hear a pattern….’fever’!
car fever, house fever, experience fever. We’ve had our share of fever in our lives. we’re learning to take our time with financial decisions. not easy but the better thing to do.
car loans.
our last ever car loan was rolled into a refinanced mortgage, 2 refinances ago. we eventually got our financial house in order but i hate that we’re still ‘paying’ for that miserably overpriced, bought it used, lemon of a van and its $7,000 in credit card repairs.
we pay cash for vehicles today. and i cringe whenever i hear friends or family complain about not being able to fund college or retirement, because there’s $1,000 in monthly car payments sitting in their driveways.
My biggest mistake was lack of budgeting. My husband and I make good money, but I always wondered why we flew through our money so fast. So, for a couple of months, I tracked every single penny we spent and setup categories, so I could see exactly where all of our money is going. This has helped us tremendously. We have also discovered Dave Ramsey which had made everything so much better! It feels good to finally have control over our finances.
This was us too – we’ve had a nice income for a long time but didn’t really budget until about 4 years ago (we’ve been married for 15!) and discovered Dave Ramsey and did Financial Peace University a year ago. What a difference it has made! We’ve always done “fine” but this was a HUGE change and we are so grateful for that.
Lea