Even though I am only 34 years old (I know, that is ancient to some but young to others), I feel like I’ve made more than my share of money “mistakes” over the last 10 to 15 years. For whatever reason, I have done many of the things that you always read that you should not do. Here are a few of the highlights (read: low-lights!)
Taking a 401k Loan- About 7 or 8 years ago, I took a 401k loan . Well, 3 months later, I changed jobs, and of course did not have the money to pay the loan back, so I ended up paying a 10% penalty and taxes on the loan proceeds.
Cashing in a 401k- A couple of years ago, after my wife stopped working to become a SAHM, we decided to go ahead and cash her 401k in, as it was not a lot of money. We really didn’t need it at the time, but we did it anyway, and once again paid the 10% penalty as well as taxes on the proceeds.
Taking out a loan for our wedding- My wife and I, who will hit our 5 year anniversary in a couple of weeks, were both previously married. We did not really expect her or my parents to pay for much of the wedding, so we decided to take out a bank loan to pay off some debts and pay for the wedding. Although it joyous occasion, and wasn’t extravagant, we paid for the wedding for the next 30 months.
Financing both of our cars for 60 months- Even though I though I was being thrifty by purchasing our current cars used, one 2 years old and one 3 years old, I financed both of them for 60 months each. While one will be paid off in a few months and the other next year, it was a terrible idea. I do plan on keeping the cars for as long as possible, but I am currently paying 2 car notes, and have so for the last 4 years. The day I no longer have a car note will be a happy one indeed.
Paying the minimum on my credit cards- Up until about 3 or 4 months ago, I did this regularly for the previous 5 or so years. Obviously, I never made any real progress on paying down my debt because of this. It has only been in the past few months that I have begun to make real progress on paying them down.
Not investing in a 401k at my first job- Even though it was a part-time job while I was in school, my company offered a 401k plan. I could have easily invested a small amount on a regular basis, but, being financially unsavvy, I did not even think about it until I graduated college and started my first full-time job.
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i know i was guilty of some of these things too! i would say my biggest mistake was getting mixed up with credit card debt at all. i sometimes wonder what my financial position would be like if i never got into debt. at least we learned these lessons early while we still have time to recover from them!
lpkitten:
I think CC debt has been my biggest problem as well. I think as long as you get to the point that you realize you cannot continue to get into debt, you have time to make a positive change to your situation, so I do believe that I have time to recover. I just wish I had started straightening things out 5 years ago!.