Our 6 Financial Mistakes and 15 Lessons Learned
Hello readers, today, we are going to talk about financial mistakes we have made throughout our lives and the lessons we learned from them.
We will start with the financial mistakes made by Ms99to1percent, those made by Mr99to1percent, and then those made together since we started dating.
Ms99to1percent’s financial mistakes
Mistake 1: Not paying off my credit card or at least paying the minimum required amount
Back when I was in college, broke, and barely surviving, some bank made a mistake and gave me a credit card J. I quickly maxed it out buying food and books and couldn’t find money to pay it off.
But not only did I not pay it off, I didn’t bother paying the small minimum monthly payments, because I was too lazy to go to the bank to pay such a small amount. I told myself I was too busy for that.
I also told myself, the bank should not have any problem with it, since they were charging me interests and making money off me. The bank must love me.
And of course later on I found out, I had ruined my credit because of that, but I was able to fix my credit and bring it into the 700’s within a year of finding a full-time job before even graduating.
1) If the banks love you, you are probably doing something wrong.
2) Set up online banking/payments, it will save you time
3) Maxing out your credit cards and not paying at least your minimum monthly payments, will ruin your credit
4) Pay off your credit card every month
Mistake 2: Buying some $7,000 stock market forecasting tool
Another fellow college student and I went to some business presentation for some stock market forecasting tool at a fancy hotel so that we could get some free lunch. (I told you we were broke and had to be resourceful 🙂 ).
But we ended up falling for their tool or should I say scam (won’t name the company), and we borrowed money to buy the tool for $5,000, plus other add-ons and monthly subscriptions and the total came to about $7,000 with my half of the costs being $3,500.
We tried the tool for months, trying to learn how it works, but we never made any money, instead it actually made us lose money but fortunately, for us, we were in the test-mode, since we didn’t have much money to trade live anyway or day trade.
5) There’s no such thing as a free lunch
6) No tool can really predict the stock market. If someone tries to sell you one, they are scamming you.
7) It’s best to put your money in an index fund. Invest in single stocks only with money you can afford to lose.
Mistake 3: Buying a brand new car
After getting frustrated with my first car that somehow always managed to break down every week around payday 🙂 , and also after getting tired of my crooked mechanic; I decided I would aggressively save for a brand new car.
I did a lot of overtime, and finally bought a $30,000 brand new car and of course lost 20% of its value the minute I drove off the lot.
I also made a mistake and continued to go to the dealership to have the car maintained.
Until one day, someone hit my car, and he took it to a decent, smaller, cheaper place to have it fixed for a 1/10 of the dealership quote.
8) Never buy a brand new car.
9) Find a mechanic/shop that you trust. Don’t go to an expensive dealership to have your car maintained or fixed especially if you plan to keep it for a long time.
If you sell the car after 10, 12, 15,…years of driving it, no one is going to care that you took it to a fancy, expensive dealership for maintenance.
Mr99to1percent’s financial mistakes
Mistake 4: Attempt at party promoting
Back when I was in high school, I came up with my first business idea: Party promoting.
I took all my savings, rented a place, printed & distributed flyers, and even bought a radio ad… and a whopping 20 people showed up. Ha! It was a total flop.
The hardest thing was to tell my parents that all my savings were gone. However, to my surprise, I didn’t get in trouble.
They told me it’s ok to try and fail, but it’s no ok to fail to try.
10) it’s ok to try and fail, but it’s no ok to fail to try
11) Take time to research and execute your business plan.
Mistake 5: Using my credit line to buy a luxury car
I bought a used, luxury car for $30,000 and put it on a credit line.
And, on top of that I didn’t try to pay it off fast, instead I spent the next 3 years, making only the $200 monthly interest payment.
After 3 years of only covering interests, the balance had actually increased instead of decreasing due to the credit line insurance premiums that were being added.
Fortunately, after getting married to Ms99to1percent, she convinced me to cancel the credit line insurance and to pay off the balance and to never carry the insurance on the credit line since I should not be using the credit line; and if I was to ever use it again, I should pay off the balance by end of the month.
All in all, the car cost me an additional $10K in interest and credit line insurance premiums, for a total of $40K+.
12) Always buy a car cash
13) Don’t use a credit line for anything, unless it’s for an emergency, and you don’t have an emergency fund.
By the way, you should really have at least 6 months’ worth of expenses in an emergency fund.
14) Don’t carry a credit line insurance
Our financial mistake as a couple
Mistake 6: Suspended/Delayed lifelong dream
We have a lifelong dream of setting up school(s) for kids, especially underprivileged kids.
We tried to start the project this past spring, but we realized how expensive and time consuming it was, especially dealing with government bylaws and bureaucracies.
We ended up wasting thousands of dollars for nothing, and thus, the project has been suspended until we FIRE and have enough money and time to manage the project.
15) Research, research and do some more research before starting an expensive project
How about you guys? What are the financial mistakes have you made and what lessons have you learned from them? Please share with us. Sharing is caring 🙂 .
On that note, here are a few other personal finance bloggers who have shared their financial mistakes:
- Chronicles of a Father with Cents – My Financial Mistakes
- A Journey to FI – My Financial Mistakes,
- ThinkSaveRetire – Don’t brag about success; tell me your failures
- OthalaFehu – Budget Bungles, Money Muddles, and Fiscal Flubs
- Turning Point Money – My Financial Mistakes
- Femme Cents – 7 lessons I learned from my biggest financial mistake
- Mr. Jumpstart – Recent Financial Blunder
- The Frugal Gene – Top 5 Sorry Ass Financial Mistakes Of My Early 20s
- Gen Y Money – My Tell All: Investing Mistakes in my 20’s
- 99to1percent – Our 6 Financial Mistakes and 15 Lessons Learned
- Winning Personal Finance – My 7 most regrettable financial decisions
- Chief Mom Officer – Overdrawn checking account!
- Foreign Born MD – Biggest mistake: Over a million dollars worth
- Kiwi And Keweenaw – Is An Emergency Fund Necessary with a High Savings Rate
Thanks for reading. Please feel free to comment, share and subscribe! We love ya and wanna get to know ya!
Do you want an easier way to manage/track your finances/investments? The Personal Capital app can help. Do you want to start blogging? Bluehost can get you started. Make sure to also check out other resources that we recommend such as books that have helped us get where we are.
Do you want to learn more about us? If so, you can also read these other posts:
- About us
- How We Increased Our Annual Income From $0 to $160K to $400K+
- How we live on 15% of our income
- Joining the Million Dollar Club/Challenge and So Can You
- How To Pay Off A Mortgage In 5 Years
- Our Biggest Money Fight and 9 Lessons Learned
- Our 6 Financial Mistakes and 15 Lessons Learned
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Thank you for sharing your dirty laundry! It’s good to see how people make mistakes and triumph in spite of them. 🙂
LOL @ dirty laundry.
Yes, it’s good to share not only successes, but also failures so we can all learn from each other
Agreed. That took real guts. I really appreciated the lessons you shared, and I hope your lifelong dream comes to fruition once you hit FI. 🙂
Amen to that!
I fell into the credit card trap in grad school (plus took out student loans I didn’t need.) I ended up paying for both pretty much through my 20s.
I’m not sure I regret buying new cars, as I had a lot of work travel and needed dependable transportation. Having a new under-warranty car meant peace of mind. What I do regret, though, is not maintaining my first car. It’s why I ended up with the credit card debt in first place. Oil changes are much cheaper than engine replacements, tire rotation/balance is much cheaper than new tires.
Yes, maintaining a car and following the manufacturer’s recommended schedule is very important.
Thanks for mentioning my post on Investing Mistake in my 20’s! Thanks for sharing your financial mistakes. Wow, a $7000 course on an investing tool! I went to a ‘learn how to day trade’ free course (I don’t remember if there was a free lunch) and of course it led to a ‘bid’ for a purchase but I thankfully escaped unscathed. They do continue to send me letters to encourage me to buy their course (it’s been 7 years).
hahaha, yes, this people don’t give up. 12 years, there are still sending me emails too.
Thanks for sharing! I’ve had some similar mistakes as well. Namely getting a credit card as a freshman in college and buying a new car that I couldn’t afford.
Your Mistake #2 sounds painful and definitely scam-ish. I always think that if someone knew some magical method to beat the stock market, they wouldn’t be selling it. They would be using it themselves to get rich.
Exactly. If you can sit in your living room and make billions, why would you be traveling around selling your tool, just so you can make a couple of millions?
I still cringe knowing that I bought a brand new car out of college and now I’m actively preaching against doing what I did. It’s crazy how easy it is to fall into thinking that you can “afford” certain things after getting your first “adult” job after graduating. Thanks for the post!
Yes, interesting how as soon as we get our first real job, we start acting like $30K millionaires lol
Haha! I can relate to mistake #2. While studying in the UK, I did attend a similar financial seminar and was so taken by their promise of a “sure-fire” trading strategy and automated software for trading the stock markets, I ended up shelling out over £3,000 for their course and other materials. My disappointment was predictable and I definitely learned my lesson!
hahaha, so I’m not the only one? Well, we live and learn.
Thanks for including other bloggers and our financial mishaps.
I bought a new car too, it was a 2013 Prius and bought in January of 2014 thinking we could get a good deal because the dealership probably wanted last year’s models off the lot so they can bring the current models. But the price we bought the car was only $500 lower than the actual value of the car so it wasn’t much of a bargain. And like you mentioned the value of the car went down 20% once we drove it off the lot.
Next time we car shop, we are definitely going to get it used, it’s not the worth buying it new.
It looks like most of us made the same mistake of buying a new car. Hopefully this is actually the last car we buy. We are looking forward to self-driving taxis/ubers 🙂
Paying off the credit card monthly is key. I really liked this article, thanks for sharing your mistakes. I’m sure there are a lot of people who can benefit from this!
Glad to hear you like it!
I can’t hate but think about how many of us have fallen for the brand new car candy. In my case, it was a Toyota Rav4 that ended up losing ~+40% in value after 5 years. Not gonna happen again for sure. I also made the mistake of paying the minimum on CC even when I was able to pay them in full … please don’t judge 🙂
Hahahaha, no judging here, we all made the same mistake.
Appreciate those who share their mistakes. Too often the blogging community is preaching about their mad skills at saving and “winning”. I’ve made a few of those mistakes in the list. With cars, we’re done and done with ever buying new. In fact, we hope to downsize to one car in the next couple of years.
Us too. We are looking forward to the day we will be a one car family or completely car less. Looking forward to when we will those self-driving taxis/ubers.
I love lessen learned #10. It’s okay fail! Many of us are so fearful of failure that we never try. That is the real risk. Thanks for sharing your mistakes. Lot’s to learn from.
it’s true. If you are not failing, you are not trying hard enough.
Thanks for sharing. Make any more minor mistakes this year?
Hahahaha, will let you know as soon as we do 🙂 . Stay tuned.
I got my first credit during my senior year in college. I promptly went out and bought a $1,000 stereo. I think it took me around 10 years to pay off. Meh. Thanks for sharing your financial mistakes, Mrs99to1. It’s nice to know that even super smart people like yourself make foolish decisions. I don’t feel so bad now.
Super smart? Not even close 😊
You actually just reminded of another mistake. For my first (beat up) car I talked about, I also bought a stereo for it, that cost more than the car itself 😀😀😀
Thanks for honesty 🙂 There’s a lot to learn from other people’s mistakes. I’ve made some too, and looking back how bad with money I was, I think I was just lucky that I didn’t get myself in any big financial troubles 😀
Same here. We are glad we survived the crazy period.
not paying parking and speeding tickets on time. eventually your car will be towed and it will cost you much more, same with license suspension. getting too cute with stock picks cost us some money over the years until we wised up. specifically, chasing yield is not a great idea. we owned a decent chunk of CLMT at one time then the dividend disappeared *poof* and the price reacted accordingly. its good you learned it young and had time to recover.
Oh Oh you just reminded me of another mistake I made. I got a ticket, decided to fight it, but then changed my mind and didnt show up at the court. Ended up with a hefty bigger ticket, plus court fees, plus penalties and interest. Then I forgot to pay by the due date, and my drivers license got suspended and then I had to pay additional fees to activate my license again. All in all a $100 ticket turned into a $1,500 ordeal.
So many stupid mistakes we made while in college huh?
I was about 1 year too slow to refinance my student loans which were sitting at 7.8%. The delay probably costed me >$10,000!
Ouch, that’s an expensive mistake. We live and learn 😊
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Who’s your mechanic? I need someone competent and trustworthy in the GTA.