This post is by staff writer, Kayla.
Even though I’m a personal finance blogger, I’ve made some financial mistakes. I think we all have and sometimes they are even pretty recent ones.
Sharing them, as my friend Alexa did here, just makes us seem more human to those who read our blog. They know that even though we act like we have our stuff together financially, we still make mistakes from time to time.
In fact, I’m still paying for some of mine. Here are 4 financial mistakes I’ve made in the past and what I learned from them.
Mistake #1: Buying a House Before I Was Ready
I’ve talked on my own blog about the reason I ended up buying a house even though I wasn’t financially ready, but basically it was out necessity since there were no suitable rental options in my hometown.
At the time I bought my house I had barely $100 in my accounts and no money saved up for closing costs or a down-payment. I ended up with a 100% loan on my house and my parents were kind enough to pay for the closing costs.
Even though I love my house, this is still a financial mistake in mind because I wasn’t financially ready to buy a house and all the associated costs of home-ownership that come alongside the monthly mortgage payment.
What I Learned
If I could do it over again I might have still bought a house, but I definitely would have shopped around a little longer to find one with a more affordable house payment and one that wasn’t so big. I definitely bought too much house. After all, what single person needs a 4 bedroom house?
Mistake #2: Coping With Emotions By Shopping
Just a couple of years before my house buying debacle, I went through a divorce. This is something I haven’t talked about too much on the World Wide Web because it was a difficult time in my life. At the time I thought I was just fine and I never really had an emotional meltdown to deal with my feelings. Now when I look back on that time I can see that instead of crying myself to sleep and eating a tub of ice cream (ok, the ice cream thing totally happened), I coped with my feelings by going shopping.
It started off pretty slowly with one new shirt here and a pair of shoes there, but by the time I graduated college I had no money and a credit card balance that kept growing.
What I Learned
Next time, stick to the ice cream! Next time I go through something tough in my life I need to find a healthy way to deal with it instead of creating a financially destructive habit that I’m still paying for today.
Mistake #3: Continuing to Shop When I Had No Money
Shortly after buying my house, I realized I was in trouble. I was putting everything, including groceries and gas, on my credit cards because I had no money in my checking account to pay the bills and to pay for the things I needed.
Even though I knew this and it kept me up at night for days on end, I kept shopping. I kept racking up debt for new clothes and pretty things for my house instead of cracking down and fixing my financial mess.
What I Learned
This one is still a work-in-progress for me. I still struggle with shopping when I don’t really need anything, and I’m still paying off debt from those purchases a few years ago. I’d like to say I’m cured, but really I’m just in remission. I have to remind myself of my financial priorities every day and it’s still hard to avoid shopping sometimes.
Mistake #4: Not Telling My Friends and Family About My Financial Priorities
Sometimes I get frustrated when I’m with friends and family and I see them buying things they don’t need. But it’s especially frustrating when they encourage me to go along with them and buy things I don’t need. I’m working really hard to get out of debt and I definitely don’t need any extra temptations #thankyouverymuch.
At the same time, I can’t really blame my friends and family for encouraging me to buy something that would seemingly bring me joy or be helpful to my life since they have no idea that I’m trying not shop. (Trying is the key word there.)
What I Learned
Even though money is still a taboo topic, I need to do my best to be open with my friends and family about my financial situation. For everyone else, I need to be confident enough to politely tell them “No thanks” or a casual “It’s not in my budget right now”. This is definitely easier said than done.
Have you made any financial mistakes? What did you learn from them?