At a Glance
Some lessons are priceless, some lessons are costly, and some are a bit of both. We all come from different backgrounds and have different family experiences with money growing up. Then, as adults, we start earning and managing our own money, and make our own mistakes in the process. Let the following real-life stories of money failures serve as a reminder that regardless of where you’ve been and where you currently are with your finances, you can always learn and grow – and feel empowered about your financial future.
“I had no money goals or purpose.”
“The biggest financial mistake I made in my life was not having a purpose for my money. The purpose of my money was to pay bills,” shares Mary Ann Stenquist, the founder and creator of the personal finance blog Money Makeunder.
Paying bills was necessary, but it didn’t motivate Stenquist to earn more money or save more. “After years of spending money without a goal of what to save for, I felt unhappy. I felt like there was little purpose to earning money when I couldn’t enjoy what my money was being spent on. I felt deprived.”
That feeling of deprivation turned into impulsive spending. “I spent a lot of money on stuff, and it was stuff I didn’t care about. The stuff I bought was unimportant. It was clutter. It was stuff I would probably donate later. But I still spent it. The mistake I made was wasting that money on stuff I really didn’t care about. When I realized I could change my financial fate by stopping my frivolous spending, it changed my financial future.”
“As soon as I had a focus for where I wanted my money to go, it was easy to say no to impulse purchases,” she adds. “Because of this experience, I now make sure to have a focus for my money and a spending limit. I choose the things I care about so that my money has a purpose. I spend less in the areas I don’t care about so that I can save more for the areas I do.”
“I went to a super expensive college.”
“Even though I did everything right – I worked hard, graduated on time with good grades, got a great job in my field, and went to work – I still found myself unable to afford my monthly loan payments, and the income-based repayment program I enrolled in only made it worse,” she says.
“I wasn’t defaulting on my debt, but the balance just kept on growing even as I threw a huge chunk of my monthly budget at it. I eventually had to move into a cheaper apartment and aggressively consolidate and pay off my debts in order to escape the trap.”
The lesson? Choose your school wisely – and your student loan repayment plan too. Check out this debt consolidation loan calculator to make sure you can afford your monthly payments and avoid drowning in interest fees.
“I didn’t discuss finances before getting married.”
“As my parents combined their finances, we did the same by putting two thirds of our military checks together to pay our bills. We each put aside one third into individual savings accounts that we individually controlled,” she shares.
“With our combined funds, we opened a checking account and both were able to draw funds from it. On our first overseas tour, we started receiving overdraft notes from our bank. Asking my husband if he wanted to be the one to resolve this he indicated he wasn’t interested in dealing with our funds, banking issues, etc. so I took over this.”
It turns out both partners were cashing checks at the same time – Gee’s husband would forget to write down how much he wrote a check for, or forget to tell her he took out cash. As a result, their bank account would often end up in overdraft. Finally, the couple decided that only one of them would write checks, and that they would communicate about taking money out of the account.
“Upon deciding to marry, finances should be a major discussion. The discussion should include whether to combine funds, and who will be responsible for handling the funds. There should also be discussions when purchasing big-ticket items or experiencing other financial issues,” adds Gee.
“I lost all my savings investing in Bitcoin.”
“It was the height of the market at the time and I thought I was being smart by trying to time the investment. The thing is, I really needed that money to cover some bills, so when the investment went belly up, I was in big trouble,” he says.
“It was my biggest financial mistake, and I learned the hard way that you should never invest more money than you can afford to lose. I worked hard at my job for the next few years to cover my losses.”