What was you stupidest financial mistake?

[MiaVitug]

hmmm not really but I do get buyer's remorse sometimes.. Does that count? lol

[phantom]

When I graduated college, my plan was to pay off most of my student loans and then save up for a car. I was living with my parents and they were letting me use one of their cars to get to work until I could buy my own. I waited until 6 months after I was out of school and the loans started accruing interest and I started owing money to actually make a payment. I looked at my savings and saw I could put about $8000 on my student loans and still have $1000 left over, so that's what I did. About a week later, on the way to work on an icy road, I lost control and slid into a minivan totaling the car. My parents decided they weren't replacing the car and that it was time for me to buy my own. So, I used my remaining $1000 as a down payment and went and got myself a car payment of $350 for the next 6 years.

For many years, I thought my biggest financial mistake was letting my emergency fund drop down to $1000. But, now I think my real mistake was probably either buying such an expensive car or not paying off the car loan early. 8 years later, I still love that car, but I do feel pretty dumb when I think about how much I paid for it.

Okay, now I think that maybe paying off student loans is always a mistake because it has the mysterious ability to cause cars to break. My husband decided that he was tired of having a student loan about a month ago, and I agreed that we could pull $4,000 out of savings and pay it off. A couple of weeks later, he started having engine troubles and air conditioner troubles that are going to be expensive enough to fix that we're better off getting a new car. While buying a new car will take the emergency fund a little lower than I'd like, we still have money to do it, so paying the student loan wasn't really a mistake. But, if I had any student loans left, I'd be very reluctant to pay them off for fear of my car getting hit by lightening.

[vitalogist]

Another stupid mistake that I did was to ignore house repairs. Since I was too stingy to call someone for leaks in the backyard, which in turn was because of the septic tank I figured out that it doesn't really affects the inside so I let it slide for a while. Time passed and our toilets started to clog. Turns out, there's a hole in the tank and it was too late to repair it. I ended up paying twice for a new tank instead of just the repairs that was needed before.

[dh1989]

I made a stupid investment mistake of moving money around too often in the stock market. I ended up buying high and selling low more often than not, although I did get lucky and come out ahead pretty well over time. Now I try to only buy stock I plan to hold at least a year. Set trailing stop orders and forget about it. Well, just check back every month or so, but no more watching it every day.

I will do more short term trading someday - when I have money that I'm not afraid to lose.

[kv968]

I'd say the biggest mistake I've made is the very one I currently rail against some of co-workers for continually doing or thinking of and that's being 100% in company stock in my 401k.

When I first started at my company I had my fair share of knowledge about investing but thought "Hey, this is great, I can actually buy company stock" (and not even at a discount), so I went all in. Of course things couldn't have been better...the stock started surging and splitting and I was making money quite nicely. Then around 2001-02 the bottom fell out (as it pretty much did for the whole market). However if I had been more diversified the loss wouldn't have been nearly as bad. The ironic thing of it all was as it was falling I recall me and some of my co-workers saying, "You know, we should really get out and diversify, but nah we're buying this stock really cheap." Yeah it was cheap all right, it fell and has hovered around the same range for last 10 years.

However that mistake has allowed me to paint a real life picture to some of my new co-workers who are thinking of going "all in" on company stock and why it's a bad idea. I just tell them that even with my continuing contributions, a company match of $0.75 on the dollar for the first 5% contributed and allocating my funds better, it took me almost 7-8 years to get back to that same amount I had when the stock peaked. That usually shows them, in a way they can understand, the risk they're taking in not diversifying.

However, had I pulled my money out at the top this would have been on my smartest financial moves ever

[Nightfly]

Once upon a time - when I was younger and much dumber (I'm slightly less dumb now, I hope) - I got talked into selling "income protection" insurance (this was in the days before Aflac had it's now famous duck). That's bad enough, BUT I did it door-to-door. And, always in very poor neighborhoods. I'm guessing that the company involved figured that our potential targets weren't sophisticated enough to know that they really shouldn't be buying what we were attempting to sell. Yeah, pretty shady. I only did it for about two weeks though. I was around 21 or so, and the lessons I learned regarding shady business practices were invaluable.

[BudgetSurgeon]

I have been very fortunate in that regard. I was raised by extremely budget-disciplined parents, and this has carried over well throughout my adult life. That said, I did make 1 bad financial decision, looking back on things. When I was 24, just out of grad school, and with my 1st job in hand, I went out an bought a brand new Mazda RX-7 in 1985. Although I loved this car, I bought it on credit, and in retrospect, it was a poor financial move, given that cars are depreciating assets. To make matters worse, the car was ultimately stolen, and never retrieved. Sigh.....

BudgetSurgeon

[bumstah]

My stupidest mistake was when I was 18 years old.

I drove a beater 1998 corolla for most of high school and demanded a newly used car from the dealership before entering college. My brother worked at a dealership at the time and told me he can probably give me a good bargain so I went down there. Big mistake.

Instead of taking his advice on cheap affordable cars, I immediately got fixated on a used Honda Civic coupe with 30k miles that was BARELY $1k cheaper than a brand NEW Civic. I ended up financing the car for $17k. So not only did I spend almost the full price for a used car, I also had to pay extra for the insurance because it was a 2-door vehicle. The total bill for the car alone was about $320/month.

I ended up delivering pizza for 3 years to make the payments because my parents refused to pay it (and I didn't expect them to). I barely had the chance to meet my friends because I was going to class on the weekdays and working swing shifts on the weekends. I had no life because I was busy paying off that stupid car.

Then one day I was driving down to California and got in a major accident and ended up wrecking my car. Luckily, I had gap insurance (probably the only thing I did right at the time) and the car was paid off by the bank. A blessing in disguise? Maybe.

[bumstah]

I have been very fortunate in that regard. I was raised by extremely budget-disciplined parents, and this has carried over well throughout my adult life. That said, I did make 1 bad financial decision, looking back on things. When I was 24, just out of grad school, and with my 1st job in hand, I went out an bought a brand new Mazda RX-7 in 1985. Although I loved this car, I bought it on credit, and in retrospect, it was a poor financial move, given that cars are depreciating assets. To make matters worse, the car was ultimately stolen, and never retrieved. Sigh.....

BudgetSurgeon

rx-7?? Man that was totally worth it.

Sorry to hear it was stolen though.

[vitalogist]

Besides wasting money on gambling when I was younger, I'd have to say the biggest mistake was wasting time and money for freshmen year of college slacking off. I think my student loans 12 years ago was around 4500 for three semesters, which shortly I dropped out to work full time. A large part of me still regrets not completing a 4yr degree, for personal reasons, not monetary.

The gambler in me says that gambling is a vice, a personality flaw. It's not a monetary decision. I don't think that blowing a couple of thousand dollars on craps makes any sense either.

[DogDiva]

Mt worst financial decision came shortly after I got married...

Both my husband and myself came into our marriage with debt...and kept our financed separate mostly, which now, 8 years later we are done with and fully "married" money and all...

But we went into more debt getting married, having 3 apartments for a few months in the transition etc, and somehow, we ended up sitting at Wells Fargo and I was able to roll credit card debt...into my car loan that was almost paid off. Sigh.

Stupid because I justified it as a car payment versus credit card debt payment, and did not change my behaviors, but also stupid because when we wanted a new car...we got one...and yep, could not afford to trade the other one in due to the loan...so we ended up with 3 cars, not just 2...and now more credit card debt.

The good news is...down to 2 cars (we ended up trading 2 for one about a year and half ago) and we are changing habits and paying debt down...just wish we would have learned this 5 years ago, instead of now.

But yea...that is one decision I wish I could go back in time and change...

[AccountantSalary]

Getting involved in stock options. I'd sometimes make six figures on a four-figure investment in a couple of minutes, only to lose it all the next day expecting it to do better. Eventually, it become a big money-losing proposition.

[KTP]

Getting involved in stock options. I'd sometimes make six figures on a four-figure investment in a couple of minutes, only to lose it all the next day expecting it to do better. Eventually, it become a big money-losing proposition.

I can agree with this, although man is it tempting.

I bought 20 bank of america April $9 call options in Feb for $0.15 a contract in my IRA (spending a total of $300). Bank of America was trading in the high 7s. I knew I was throwing away money, but couldn't resist the lottery ticket. I was then away from the internet for about 3 weeks in March on a camping trip, coming back to find BAC near $10 a share and my option contracts worth $1.28 each! My $300 had turned into $2560 while I was in the woods. Fortunately I sold them and banked the profit, although in the back of my mind I had the thought of regret if BAC kept climbing to $15 in April (it hasn't).

These type of returns make you forget all of the times you bought calls or puts and they expired worthless, but it is too risky and such a gamble. I now mostly sell options against stock or cash (covered calls and cash secured puts), but it sure is tempting to take a gamble sometimes.

[stazstaz]

On a random impulse after watching a good high class cooking movie, I decided I wanted to cook like the pros and bought the most high end set of pots imaginable for $3000. I'm still paying off the loan I took out to buy them lol

[Bades]

I just had to have the new LG Chocolate when it came out for my freshmen year of college.
250 bones it cost me. Oh yeah and a 256mb card was $25.

I did probably have the coolest phone in the dorms, but it was a stupid purchase!

haha