It’s April Fool’s Day, one of my favorite days of the year at Get Rich Slowly. It’s the day I get to share the story of some foolish thing I’ve done with money in the past.
This year, though, April Fool’s Day falls on a Friday, which is when I traditionally field reader questions. So, I thought it would be fun to mix things up. Instead of me telling you how stupid I can be with my cash, it’s your turn to tell me your tales of financial foolishness.
As a reminder of my own follies, here are the stories I’ve shared in the past:
- 2007: Lifestyles of the Rich and Stupid — Okay, so this one isn’t about me. It’s about how the rich and famous squander their cash. Come to think of it, it may be time to update this article.
- 2008: How to Turn $500 into $7 the Hard Way — In which I buy a $500 encyclopedia set on credit, only to see encyclopedias become obsolete.
- 2009: The $1500 Frisbee — In which I choose a checking account based on a free Frisbee from the bank — and then spend decades paying a monthly service charge because of it.
- 2010: Confessions of a Gadget Junkie — In which I have a history of buying technological gadgets for top dollar (and usually on credit).
There are so many stories of my financial failures that it’s tough to choose a new one every April.
For instance, just last night I was remembering what I did with my end-of-year bonus in 2004. The box factory had a good year, so employees got a Christmas surprise. For me, that meant an extra $5000. Holy cats!
At that time, I was still mired in over $35,000 of consumer debt. Even after taxes, that $5,000 could have made a huge dent in what I owed. But do you think I used the money for good? Of course not! I spent every dime (plus a little more) on comic books. No joke. I went wild buying hard-bound compilations of my favorite series. To make matters worse, I ended up selling many of these same volumes at a loss just a year or two later as I was pulling out all the stops to pay off my debt.
Sometimes I’m an idiot.
Please tell me I’m not alone. Make me feel better by sharing your money blunders below. I promise not to laugh at you — too hard. (I’ll be laughing with you instead.)
This article is about Ask the Readers, Funny Money, Real-Life
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When I was in college my wife and I scraped together enough money to buy an older, but solid two bedroom house. It was only 824 sq ft. After one year in the home we ripped up the dingy worn out carpet in every room except the living room. Somewhere around my jr year of college a Hyla vacuum salesperson stopped by our home because one of our “friends” referred them. After 15 minutes of our time turned into over an hour we watched in awe as the high tech Hyla vacuum sucked sludge looking substances from our seemingly clean carpet. While vacuuming our house was filled with a cinnamon aroma that the sales woman had dropped in the water and we were convinced our life would be better with the vacuum. We dropped (or financed) over $1600 for this magnificent machine. Now we could vacuum our carpet (only about 300 sq ft at this point) with piece of mind and the smell of cinnamon in the air. About six months later we got tired of the carpet in the living room and removed it (the last remaining carpet in our house) too. . . . . .
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I love it! I wonder if the vacuum saleswoman ever tells the story of this couple she met with only a tiny carpet, but she managed to sell them a vacuum!
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Lisa, between Laura in Cancun and Adam P. has mine beat and is a lot funnier! (What happened to the number on the side of the posts?)
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We bought a Miele for $1k w/ tax on sale for our 1/2 hardwood 600 sqft apartment.
And in no way do I think that’s foolish.
Paid cash. And the amount of pet hair and allergen crap it’s erasing from our sarcophagus-like living space is amazing.
Spend money on what has value to you
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I bought a boat once, which was a horrible financial move. Luckily, after about a year I realized that it was a bad move, so I sold it.
Then, about a year later, I bought another boat…
Oops.
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I bought my first brand new car @ 17 years of age (a Ford mustang). The dealership extended me the credit, NO JOKE, on my “income” from donating plasma (was like $60 a week at the time in early 2000)… I did end up getting a full time minimum wage job to pay for the expensive car and insurance AS I WENT TO COLLEGE FULL TIME. This was a very painful process, for which I am actually thankful for now (it taught me serious time management, discipline and the value of hard work). I also learned very early in the process to associate like energy being thrown out the window just for my car…. I ended up paying the car off, selling it and buying a beater for the first year or so out of college.
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When I was younger and still living at home, I decided that it was time to have a girl-wooing entertainment room!
Rather than save the money for my college classes, I bought two big screen televisions, top-of-the-line surround sound, and a mammoth entertainment center to house them. $1,500 later, I had my entertainment room…which mostly housed my friends, and not the girls that I was hoping for…
In retrospect, it probably would have been good to save that money, rather than go $12,000 in debt to pay for those final couple years of schooling…
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Yes, that sounds like a room that young men would like!
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My weakness used to be buying kitchen gadgets on sale thinking they’d somehow change my eating habits. Still haven’t used that slow cooker to make soups and stews, and my blenders (I have regular one and a “magic bullet”) hardly ever get used.
Hmmm. Maybe I should make a soup and whip up some bread crumbs this weekend just so I’ll feel justified keeping them
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Elizabeth I would love to buy your used magic bullet! Seriously, sell that stuff you don’t use. Declutter and put cash in your hand.
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That might be more productive than thinking my habits will change
Thanks for the suggestions!
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Before I buy a kitchen gadget I see what it would replace in my current cooking habits. For example, I would get a blender if I currently spend a lot of time chopping by hand, and even then I might go for the food processor as that does what I want even better (blenders are more for liquids).
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@ David I bought the slow cooker thinking it might be easier than my big pot when making soup (I make a lot of soup!) I didn’t really think it through though — my big pot is lighter and easier to manage than my slower cooker!
The magic bullet worked far better than a food processor or blend for the very small jobs I require of it. I seem to use it more in the summer, so either it gets used this season or it goes up for sale!
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When I lived in NYC, I found a great gym near work & home. When I was speaking with them, they mentioned that there was a substantial discount if you paid a yearly fee, so I decided to pay right then and there for a whole year–$887. Of course I bought this membership right as I was in the midst of managing a huge project at work *and* getting married out of state. Before I knew it, three months had gone by and I’d never set foot in the gym. Instead of vowing to get my money’s worth, I avoided the gym out of embarrassment. Two months after that, I moved out of the city. I paid almost a thousand dollars for the privilege of being able to spend a year doing what I already had been doing for free–avoiding a gym like the plague!
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In a misguided attempt to “encourage” my husband to work out more, I convinced his father that, for a birthday present, my FIL should buy my DH a ($500) rock climbing membership.
That was in August and now it’s April and my DH has yet to go, even once.
Gym memberships are hard – you want to feel like there’s a reason to go, but sometimes the money isn’t enough. Hence why I won’t join a gym
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Ugh. This is EXACTLY my own story, except that my membership cost about half as much. I’m pretty sure I feel like just as much of an idiot, though!
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When I was in college I had an unusually high-paying job. It made me arrogant. At one point I was with a group of friends bragging a bit about how much extra cash I had – even going so far as to pull out my wallet and show off $80 I had on hand and “didn’t even need.”
One of them taught me the greatest lesson I’ve learned in quite some time. She said she’d be happy to use it, if I didn’t need it. To save face, I handed it over. She kept it.
It stung. I was just trying to show off, and I paid for it. Quite a lot – for someone who was living on the high end of college poverty.
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Ah. Much as I hate to even think about it, my husband and I dropped $2500 at TotalHome some years ago: a membership that would allow us to buy all sorts of home improvement supplies, furniture, etc at a steep discount. THAT was for a year’s membership, during which we bought — are you ready for this? — a set of stainless flatware. We did not renew (which would have “only” been $1500). We’re not sure what we were thinking but since it was one of those sales pitches at the location where you sign up that night or never….well, we NEVER EVER go to time share pitches, no matter what reward they offer for “just attending.”
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My stupid blunder lasted for a few years. I repeatedly loaned (burned, threw away) money to my significant other, who is not exactly the most financially responsible individual. I’m pretty sure that if I had kept my own money to myself, I would not have had to finance my car. Anyways, I finally realized that my “help” was really hurting him and enabling his bad habits so I cut him off. NEVER AGAIN!! It was pretty stupid to keep lending him money without receiving payments for previous loans.
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My inlaws decided that we don’t take enough vacations, so one year for Christmas they bought a timeshare for us. Not wanting to make waves, I signed the paperwork for the title transfer and they promised that every Christmas they would pay the annual fee for our Christmas present. 3 years later, they never paid any of the fees (we paid $700 a year) for a place we never went to – we hate to travel. Plus, the timeshare was in CO – we lived there for a year and hated it enough we moved back to MA. Why would we want to go back to CO? We couldn’t sell it, couldn’t donate it (no one wanted it!) and ended up paying someone $3000 to take it from us.
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I moved to CO 5 months ago.. I hate it aswell, I’m moving back to MA toward the end of the month.. luckily I liked the drive out, so I’m confident I will also like the drive back.. The skiing is good though..
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What an awful position you were in! What you described wasn’t so much a blunder on your part as on your in-laws’. Perhaps they meant well, but that was a pretty awful “gift.”
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I was laid off from my job a couple years ago. With the layoff, I was awarded my vacation pay and some small compensation. A week later, I was at a sale with my brother and a high-end clothing store in town was selling top-drawer suits at deep discounts. So, thinking a suit would help me get another job, I dropped $1600 on the suit and some shoes. At the time, this would have easily covered a month’s worth of living expenses for me. Turned out I needed to have the suit tailored–something I couldn’t afford anymore. I had thought better of it 6 hours after I bought it, but because it was a blowout sale, there were no returns.To this day, it hangs in my closet, waiting to be made to fit. I really ought to do that someday.
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I was a poor grad student who needed a new car. The used one I bought from my parents had run out of time. They came up to visit one weekend and were worried about my safety, and offered to pay a percentage of a new car. We ran around from dealer to dealer looking for a good car. There was a great used Kia for around 12000. We went to the Hyundai dealer and found a car I liked for 17000. I bought the 17000 car. The kicker is the Kia and the Hyundai are the same exact car. I’m not kidding. Everything is the same in the interior and build of the car…except I didn’t like the color of the cheaper car.
I kick myself every month when I send in my car payment. The cheaper car would have been paid off a year ago, but I just HAD to have a black car!
So stupid!!
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I’ve told this story before in the forums, but here’s the short version of how I paid $40,000 for a Volkswagen Jetta, and it didn’t even have leather seats.
I finished university in January of 1999 and started my career in the world of high-tech (remember 1999, fellow techies? Good times!). By June, I couldn’t resist any longer, and decided to buy a car.
I wanted a brand-new car (’cause you just can’t trust used cars). VW had just come out with a new iteration of their models, and the Jetta seemed like a good, responsible choice. And starting at just $23,000, it was in my price range. So we visited the dealership (that’s right – just one).
It came standard with a 4 cylinder engine. I wanted the VR6. That’s an extra $1,000. I wanted a manual transmission, but they hadn’t yet figured out how to mate that to the VR6 engine. So I had to get the automatic. Another $1,000. I wanted the sunroof. That’s only in the GLS package (along with alloy rims). Another $1,000. I could wait 6 weeks to have my exact car shipped from wherever, but as luck would have it, they found one in the next city over to my exact specifications, except it also had heated seats. Did I want to wait, or just pay the extra $1,000 for the heated seats and pick up my car that weekend? Of course, I took the faster option.
For those of you keeping track, my $23,000 car was now $27,000. Plus metallic paint, undercoating, Scotchguarding, gas-guzzler surtax (love that VR6 engine!), A/C tax, delivery, admin fee, dealer prep fee, and whatever else, we were up to $29,000. Now add federal and provincial sales taxes (7% and 8% at the time), and we were up to $33,350. I put $1,000 down (out of my line of credit, of course), and financed the rest at 7.9% for 5 years. My monthly payments were $656.
Add it up. $656 monthly for 60 months is $39,360. Plus my $1,000 down payment, that car cost me $40,360.
It was rear-ended and totaled in March of 2004, with 3 payments left. Insurance paid out $12,000.
And it didn’t even have leather seats.
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Ouch! I just paid off my car, and, thanks to the knowledge I have accumulated over the last however many years, I have zero desire to buy a new one. I’ll never understand the allure of always having a car payment!
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Love it, thanks for sharing.
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in early 2008 I had just read a Random Walk down Wall st. (great book) which was all about investing mistakes people make. I focused on ‘buying and holding’ thinking that was the be all and end all mistake people made (they are trading too much trying to time the market!). I was pretty sure now I knew everything about investing because I had read this book.
I saw the financial markets were struggling and I said “oh, well I can buy low now and hold for the long term because i’m a buy and hold guy!”. So I gobbled up a bunch of shares of Wachovia and some Washington Mutual Bonds.
I completely failed to absorb the part of the book that was about actually learning about the securities you buy, and the warning that ‘speculation on stocks on your gut feeling is the same as gambling’.
Wachovia got bought out by Wells Fargo and the shares were converted in at a much lower value. Washington Mutual went into receivership, the unsecured bond holders (me) got wiped out.
It’s even worse because the bonds were in my Roth IRA where I couldn’t even take advantage of tax loss harvesting (not that I knew what that was then). Nor can I ever replace that few thousand dollars that was wiped out! (since it’s limited contributions each year).
I guess it’s good my big mistakes were made early? The bogleheads guide to investing helped straighten me out!
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I also did exactly the same mistake but in different time-zone. I live in New Delhi, India.
I invested around 2.2 million rupees equivalent to around 50,000 dollars in the share market and still holding those stocks. Now the networth of my share market investments is 10,000 dollars.
I made a big mistake.
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When I first started working, I used to rush out on payday to buy the latest DVD and video game releases. It was finding a DVD that was still shrink-wrapped a year after purchase that eventually made me realize that I was just buying stuff for the sake of it. At that stage I wasn’t just spending my own money but was racking up credit card debt as well.
When I look back at all the money I wasted I still cringe. If there’s a game or DVD that I really want now then I put it on a wishlist so if a family member is ever looking for a gift for me then they can get it for me.
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I used to do that same exact thing. There was a Target and a Best Buy between my job and my apartment, so every Tuesday when the new releases came out I would dash out and buy a few new movies. Eventually I had about 300. Who has time to watch them all?! That realization plus a Netflix membership ended that buying habit for me. But I still have lots of shrink-wrapped DVDs in the closet…
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I have well over 1,000 DVDs and we’ve probably watched about 20% of them. :-/
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Traded in my beloved ’02 Chevy Impala with 68K miles for a brand new Mustang 5 years later. Never got attached to the Mustang like I did to the Impala. It was uncomfortable over long distances, gas mileage was bad, and the V6 engine was just as powerful in my old Impala. It looked good though!
I think I’m done buying brand new cars.
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Soon after we bought our rural house with a half-mile long gravel driveway, my husband and his co-worker Howard decided we could all save money by purchasing a used dump truck to haul all the crushed rock we needed to fix our driveways. The two families jointly bought a truck, and Howard began hauling rock. He finished his driveway, and then got sick when his cancer resurfaced. After laying down about two loads of rock on our driveway, the truck broke down with multiple serious issues that made it unsafe to use.
In the end, Howard died, and we spent thousands of dollars fixing the truck enough to re-sell it, spending WAY, WAY more than if we had just paid a local hauler. (And we didn’t have the heart to ask Howard’s widow to pay half of the repairs – we just covered it all ourselves).
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The biggest kick myself in the rear deal was NOT buying something, an empty lot adjacent to our house. At the time we bought our house they offered it to us for 35K which was a steal, but I was in the mentality of “a)I can’t afford it, and b)they’ll never build there”. Nope, a big house was put on the lot, the water flows differently, and what I thought was an easement at the back of our yard was actually part of that parcel so the last 10 feet of our yard got cut off. Everytime I think of it it makes me feel stupid.
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$35k is a whole lot of money to drop on a whim. I wouldn’t feel dumb about that if I were you. Sh*t happens.
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I bought an 85 y/o brick bungalow for 131k at the ripe old age of 23, right before the housing bubble burst. I had no money for a down payment, the 40k job I had for my first year out of college didn’t work, and I ended up making minimum wage for about a year after that. I am still in the house (thank goodness for my parents) but I still don’t make enough money to do the much needed repairs on my home (new roof, new electrical, new windows/doors, etc., etc.) I can’t sell the house because my mortgage is under water. I’m stuck for at least the next 4 years. I have definitely learned my lesson and now live a very frugal lifestyle!
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I made the same mistake at age 23. I bought a townhouse in Florida in April 2006 for $175k, and the appraisal said it was worth $185k. Wow, I get to move in and already have equity, I thought. That day was the most equity I would ever have in the home, as it has continued to decline in value since purchase. The local tax assessor now has it listed with a value ~$30,000. Good for my tax bill, horrible for my personal finances. I’m hanging on to it, even though I now live back in Indiana with my parents. I figure it’ll eventually come back in value enough that I’m not underwater, or I stay current on the payments and buy my retirement home first.
Also forgot to mention that I had a break-in that set me back over $10k in electronics, clothing, etc. It was all insured, but the insurance company was awful and replaced less than half, plus my large deductible that I had just raised the previous week!!
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We did pretty much the same thing at 24. Bought a condo outside of DC (fortunately not quite at the top of the market) partly out of panic because real estate was rising far faster than we could save money. Paid $193K for 860 sqft, after being outbid on two other identical places in the same development (they both went for $200K+). 3% down from a grant from the county for first-time homebuyers. It goes on the market on Sunday, and I think we’ll be extremely lucky to get $140K for it when it does sell. We’ll pay all the closing costs out of savings, and I’ll just be happy to not have to write a check to our mortgage company at the closing table.
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My husband and I lived in the Florida Keys for a few years before getting married. We absolutely loved living there, but the rate of pay and cost of living were hardly a match. In an effort to keep living there, I thought I’d found a great way to supplement our income creating internet ads with a work-from-home type deal. Of course, you had to pay $2500 up front for the program and counseling. A week into it, my now husband helped convince me that it was not the correct choice for us. We were past the 48 hour window to cancel, so had to pay off the $2500 we had charged to our credit card with interest, of course.
While I regret the decision I made to get us into the program, I also know how much we learned from my expensive mistake and how much it has taught us both to think before we spend. Now we discuss the pros and cons of purchases together before we decide whether or not to buy. It has saved us a lot of buyer’s remorse and a lot of credit card debt and interest, too.
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My senior year of college I had to take out a personal loan for $5000 in addition to a full load of student loans because I was running short on cash and my course load was too much for me to handle a job. Not to mention moving to a more expensive town (boulder, co from golden, co) and having doubled my rent.
Days after getting the $5000 in my account I went out and bought an electric guitar. I already had an acoustic…hurts to even think about it (although I did just sell it on craigslist for ~75% of what I paid for it)
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I let my first credit card get cancelled because I was too lazy to actually mail out the $8 check. Yup, a balance of $8. I did call them when they closed the account and try to get them to repoen it, but no luck. It was years ago now, but it still makes me feel stupid.
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Sad. This is similar to my first card, except actually not my fault. My dad co-signed on a credit card for me when I was 14 (or maybe it was 16) to help me build credit. I used it responsibly, paid what I owed in full monthly to my dad so that he would make the payments (he also had charges on the card and the bill went to him). Some 8 or 10 years later, the card was cancelled after failure to pay on a $30ish balance for more than 6 months. (By that time, I had my own separate credit card that I used regularly and rarely, if ever, used the one with my dad.) I had no idea until I got my credit report a couple years later to prepare for law school loan consolidation, saw that issue, and wanted to dispute it. I called the card company, they explained what had happened, and I had to tell my dad. He was like, “Oh, yeah, I forgot about that card. Sorry.” So much for helping my credit — it’s my only ding!
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My parents did that too, thankfully they removed me once I moved out and on my own.
However, if your father added you to his card (ie, authorized user), you can have yourself removed from the card and the bad mark will go away. If it was joint though, you’re out of luck for another 7 years.
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Most of my financial blunders involve buying clothes I don’t wear and things (cooking stuff, office stuff) I don’t use. I get them on sale or get on a rush of buying clothes that they sit in my closet. I’m way better than I used to be regarding that (purging my closet is fun now), but I know it’s added up over time.
My boyfriend’s two biggest blunders I have to share. The first is he bought two copies of several Disney movies when they first came out on DVD. It was the “limited edition” thing where they’re only out for a certain amount of time then they go in the Disney vault FOREVER. Well, despite being a film major, it never crossed his mind that new mediums for viewing films would come out (Blu Ray anyone?) so now his two copies of the DVDs were worthless. We were able to get some cash on half.com, but he definitely felt silly.
He also bought $1,000 worth of suits during a Men’s Wearhouse sale. Keep in mind that he doesn’t work a job where he needs a suit and wears one maybe 2-3 times a year. I know for a lot of people, $1,000 is normal for one suit, but for GRS readers, I’m sure they can understand. They’re really nice suits and I’m sure he’ll have them for years to come, but he’s already in debt so it wasn’t the wisest choice.
I will admit that between my buying stuff I don’t wear/use and his suits, we probably break even.
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Our upstairs bedroom for our kids is a converted attic, so has little insulation and gets very hot in the summer (90 or so) and very cold in the winter (in the 50′s). We were having some repairs made to our house and decided to buy a PTAC unit to put up there (A/C and heat). In a rush to get the unit while the workmen were there, we paid $1100+ for a large unit that one guy said would fit. When it arrived, of course, it didn’t fit. It weighed 100+ pounds, and I had it sitting in our storage shed for 2 years taking up space. We spent another $450 on a smaller unit and had it installed for another $800 (running 220 volt wires up there, cutting a hole in the wall, painting, etc).
I finally sold the big one on Craig’s List for $500 two weeks ago. So it cost us $1850 to make my kids room livable. But that $500 cash from selling it was nice to get, although I am most happy to just have it out of my shed!
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Typically, the purchases I regret are not about spending large amounts of money, but are about buying on impulse. There’s an orange shirt in my closet I bought on sale without trying it on – and it fits badly. There’s a self-tanning kit I bought that is now so old – and never used – that I’m going to have to throw it out. Those little purchases chip away at your money and ultimately waste it.
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I once spent $85 on a pair of orange shoes (men’s, size 12) because a friend dared me to. Of course, I never wore them, not even once.
Orange clothing never works unless you’re talking about safety vests!
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Or in prison!
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Or you live in Champaign, Illinois!
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On a dare. That’s one I’ve never heard before! Not trying to pick on you – I just think it’s pretty funny what us humans will do to impress someone else.
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I can still close my eyes and see those shoes 20 years later. What a nightmare!
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I once bought a shirt from a catalog because the ad copy included the words “Cozumel palapa.” I didn’t care for the shirt but was enchanted by the words, which I didn’t bother to look up, either.
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When I read your post, I just had to look it up! A palapa is a thatched-roof, open-sided structure. Cozumel is a Mexican island. I’m not sure how your shirt fits this description, but I totally get being enchanted enough by words to make an impulse buy.
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Sometimes it’s little things, even when they’re not impulses. I was ordering a gift for a family member from the Bath and Body Works website, during one of their ‘Buy X get X free’ promotions. I had intended to buy two items and get the third free. Well, a) I accidentally clicked something twice and ordered four items instead of three, b) the item I ordered twice was the most expensive of the three, and c) the rest of the promotion was buy three get two free, and since I didn’t realize I had actually bought three items, I didn’t get a second free item. It was only $12.50, but the triple oops made me very annoyed for a few days!
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During college I did two things. I took out about $43,000 in student loans. And I saved up about $50,000. I knew that if I paid off my student loans, I’d be missing out on all of those great investment opportunities. So, while in college during the financial crises, I took advantage of all of these “opportunities”. I speculated by buying a lot of companies after they’d already fallen significant amounts. I mean, how far could these companies actually fall? My portfolio read like a who’s who of struggling companies. Circuit City, WaMu, Wachovia, AIG, and Citibank were my largest investments. As the stocks fell, I invested more money in them. Eventually, I ended up with nearly $30,000 in worthless stocks. The worst part is, a lot of these were in my IRA so I wasn’t even able to get the tax benefits of the losses. I still own my circuit city stock because the commission to sell them ($7) is more than all of the stock is worth and I can’t get the benefit of those losses. That taught me a huge lesson about forgoing the paying-off of debt in order to invest.
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Eek! I literally cringed while reading your post. Hope you’ve bounced back.
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My story (a few posts up) is the same as yours! The only reason mine wasn’t a 30k loss like yours is because i didn’t have that much!
I feel your pain!
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In 2007 we moved from a city really hard hit by the housing crash, and had to rent out the home we owned there because it was upside down. At the time, we had some credit still available on a line-of-credit that the bank hadn’t frozen yet, and in our stupidity, we used that as a down payment for a house in our new city, which was also underwater within six months as the market continued to crash. We’ve been lucky that we’ve managed to stay afloat and are even paying down the balances, but I don’t know what we were thinking!
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Before I wised up, I would go out with a large group of friends and always pay for dinner on my credit card and have my friends give me cash for their portion of the bill. The bills easily added up to $200+. Of course I never used the cash to pay the credit card. Instead, I would use that cash for the rest of the night or fun things that I didn’t need and then just pay the minimum on the card. When I think of all the interest I paid on items that have already been digested, well….it gives me a stomach ache!
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Mine was just yesterday! I wrote about our budget progress on my blog yesterday… including the details of my salary and all our expenses. (I guess I feel a close connection with all my blog readers.)
My dad had to send me an e-mail reminding me that’s not a good idea.
Felt like an idiot, and I’m just praying nobody in my office happened to look at it.
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I had a huge crush on this guy and he wanted to go away with me for the weekend to go snowmobiling. So of course I was going to go, no matter what. I couldn’t afford to rent a snowmobile for the weekend, so instead I bought one on credit. Even though I had never ridden before, nor did I have any way to transport it or store it. He agreed to let me store it at his house and trailer it for me.
I could barely afford the weekend as it was, what with the trail fees (which I wasn’t aware of) and the lodging, meals, etc.
I only rode it once after that weekend. I ended up selling it for a loss and he turned out to be lousy in bed.
Do I win?
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You get my vote!
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Lisa, wow, if there is a contest you really ought to win it!!!
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Oh wow.
I bought a brand new car at 23 when I was mired in student loan debt and still finishing my Masters degree.
I bought furniture on “don’t pay a cent event” credit and then took two years after that to pay the balance (surely I paid more in interest than on furniture).
I took out thousands more in student loans than I needed and used the excess to go on trips and eat out.
I was studying to be a Chartered Accountant and yet doing stupid things with money and credit left right and sidewise before I graduated and started being responsible!
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My biggest mistake was a blessing in disguise! We bought a house in Seattle in 2003 that needed some work. Our bedroom upstairs could have a view of downtown and mountains if we remodeled the entire top floor…not a tough choice, right?! After paying about $25K to surveyors, geotech engineers, designer/architect, and permits…we learned what the total cost would be. Should we pay another $300K to have an even larger mortgage but have a dream top floor? Luckily we decided not to do it- that was in 2007, about a year later the bank froze all equity lines. Since we’re slow remodelers we would have paid all that money and not been able to finish the work, and still had a giant mortgage! Given what the housing market has done in Seattle, I’m even more glad we didn’t do it! Expensive mistake, but it could have been worse if we didn’t smarten up.
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I am a very large fool with his money. And I’m sure I’m not alone in this scenario.
I was deeply in love, and let myself get convinced to buy my girlfriend, at the time, a brand new car. I didn’t have the money to buy it outright, and barely had the ability to finance it. She traded in her car for the down payment and I was stuck with financing $17,500. With the vehicle solely in my name, after some drinks we went over to the notary public and I signed the car away to her. Alcohol and love led me to agreeing to pay for the car and it was hers to keep.
Not wanting to ruin my credit with not paying or repossession, her dangling the notarized agreement every time I asked for the car back, and her just being very evil I paid the car off just recently a year early. With a 9.9% interest rate, you can see I was very much a fool with my money, and my heart.
On a positive note I straightened up my financial life two years ago, am almost debt free (Only 2k to go) and paid the car off early. I met a very wonderful woman (a fiscal sound one at that), paid cash for my fiancés engagement ring, and am saving up, while paying off debt, for our wedding in 18 months.
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Contract law is very specific about who has the capacity to contract. If you were inebriated at the time, you did not have the capacity to enter a contract, or, likely, sign away the title of a car to another person. If any one else reading this has a similar arrangement going they signed while drunk or on drugs, go see a lawyer!
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A friend of mine did this for a boyfriend. Thankfully, she didn’t sign the car away, but she bought herself and him each new cars, loans only under her name, and added him to her car insurance because “he’s going to pay for it, he just doesn’t have good credit.” Well, he *didn’t* ever pay for anything. Thankfully, her parents learned of the situation when he showed up on their insurance cards (she was still linked to their policies). She eventually realized he was a deadbeat and that she really couldn’t even afford her own new car. She ended up selling both cars for a substantial loss and had to work to pay off the debt for years.
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My family had a good laugh that 15 days after meeting me- my boyfriend bought me a used car. Mine was broken with little hope of getting back and forth to work.
The rest of the story was the ring came five days later. The wedding was six months after that. 12 moves and 29 years have passed. It seems to have been a good investment for him—and me!
Sometime stupid things work out!
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Financing our first home purchase 80%/20% in the hight of 2004 speculative market that I was concerned I was going to get priced out of rather than avoid overpaying for an entry-level house.
My neighbor’s house (not foreclosed) sold just this week for about 50% of what I paid over six years ago. Makes me sick. If my income hadn’t more than doubled since buying, I’d probably be walking away due to the 20% having a 10 yr baloon and really there’s no way in 4 years the housing prices are going to have recovered enough to finance it in… So now I’m spending most of my cash reserves to pay down debt on a house I am to upsdie down on to sell, rent, or upgrade with a growing family. I want to say this was all kinds of stupid but I feel more a victim than a some one who made a poor consumer choice. Oh well, live and learn.
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I purchased a new Honda Civic straight out of college. As soon as I paid it off, I figured I’d save myself some money by dropping all but the very minimum liability coverage. When I was working this out with my insurance agent, I remember him pausing and saying “Scary…” when I told him my plan. But I figured it was just greedy insurance agent talk.
Later on I got the itch for a motorcycle, so I financed a brand new Kawasaki. The apartment complex I was living at had one of those shared carport things, where you could rent a space for your vehicle. I didn’t want the bike getting too weathered, so I rented a space that would fit both the bike and the Civic.
When I was signing the agreement on this space I barely glanced at the section that stated: “Management is not liable for any damage that happens to your vehicle(s) while parked in these spaces.”
One year later, at about 3AM, someone’s car caught fire while parked under the old wooden carport. The fire quickly spread, fed by the dry wood and the surprisingly combustible cars parked below. Over 38 vehicles burned to the bare metal, including both of mine.
The bike had full coverage, which, along with an additional $500 from me, paid off the loan. The car was a complete loss. The lawyer I consulted with said that the zero-liability agreement I signed with the apartment managers was legally binding and not worth the money it would take to fight it.
According to Kelly Blue Book, my car was worth $7,000 at the time it burned, so that’s pretty much the amount I lost. To add insult to injury, I had to PAY someone to come tow the charred Civic away.
To make things worse, I was so desperate for transportation that I hurried out and overpaid a dealership for a used SUV that I had to sell 18 months later, during which time it had lost $6,500 in value.
There are many lessons here, but the ones that have always stuck with me are:
1) Don’t skimp on insurance if you can’t afford to easily pay for a replacement car.
2) No matter how desperate you are for a car, do your homework and proceed with appropriate caution.
3) Cars in general are money pits.
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I have recently reduced my coverage to liability only, but I waited until the savings account exceeded the blue-book value of the car plus what a rental car would cost me for 3 weeks so that I have time to shop around. Its a good tip to add in removal of the old car.
This change saved me $900/yr that I added into what I have been investing in my “Next Car S&P500 Fund”. Now it is 3/4 of the way to being able to buy a new car flat-out, 5 years ahead of the projected life span of my current car.
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When I started college I was unsure of what I was going to do afterwards, so just took basic across-the-board courses for my first year. My parents had a small savings account ready to cover my first year, so I worked part-time to save for my second year. Well, when second year came around I’d blown all my money (concerts, trips, you name it) and had nothing left. I was also too late to apply for financial aid/loans, so I just did what popped into my head first: I loaded 3 credit cards to the max paying for my tuition and books. You can guess what happened next….8 months later I had to quit school, work full-time and get an EXTRA part-time job. It took me 2 years to pay that off completely. Luckily, in that time I figured out what I wanted to do with my life. I got a job as a warehouse person in a diesel engine shop full-time as part of my paying-off strategy. The company I worked for ended up offering me an apprenticeship to become a Journeyman Parts Person, they paid for all my schooling, and I ended up with a fun and highly-paid career! Phew!
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I have a couple…
1. Buying stocks on speculation. In particular Vanguard Financial ETF. It would have been fine, but I bought it when the DJI was 12K. And then sold off at a panic when DJI was at 8K!
2. Lending money and expecting it to be paid back! Putting blind faith and trust on people and their ethics when it comes to money.
3. Not starting my 401k early enough, and foolish to think the company match of 4% is enough.
4. Not have AAA coverage. Now I do
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Re: No. 2 Sing it sister! I guess we have all been there. I have found that people will cancel a friendship rather than pay back $100. So sad.
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That could very well be the best $100 you ever spent. Wise investment to find out the truth about your “friend”
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Yes!! AAA is awesome! We cancelled it for a year to “save money” (we blew it on other junk) and in that year my husband was in an accident that derailed our lives for 3 years!! Not that AAA would have prevented that, but it would have helped with the medical bills.
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Stuff, stuff, and more stuff:
1) Unused kitchen equipment–breadmaker, Cuisinart, yogurt maker, etc.etc.
2) Hundreds of unread books, mainly literary fiction
3) A never-used state-of-the-art snowblower
4) A dehumidifier for a basement that doesn’t need it
5) Clothing that “might fit some day if I lose weight”
6) Self-improvement projects– all 5 levels of Rosetta Stone German, a guitar, a keyboard, and the obligatory exercise bike.
Surprisingly enough, I’m not in debt–but how much more in savings I could have had–oh, well.
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How about buying a cell phone on Ebay for $120, using it for two months, deciding to take it apart to replace the outer casing (had some scratches) and putting it back together to find out it no longer works. The phone in question was the Nokia N82 (R.I.P.) and when I took it apart I did not use any anti-static protection and I saw on a few forums (before I started) that this was a possibility. Not one of my best moments.
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Oh my, oh my. Well, there’s all that money I withdrew from my 401k (at a significant penalty/tax loss) to live on when I was unemployed for a couple of the years … the vintage jewelry ‘business’ I started on a credit card … the clothes-I-never-wore … and then there’s the Leonard Cohen collection. Oh my, oh my.
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Newly married and desperate for cash to make it to the end of the month, my husband and I came up with a “brilliant” plan. We would go to a department store and purchase a small appliance with our store credit card, drive to another location of that same store and return the item for cash (a loan to ourselves! We are so smart – S-M-R-T!). After all, we were newly married, we’d just tell them that we got two of this particular wedding gift and were returning it. We purchased an electric frying pan at the first store for $130, threw the receipt away and drove to the second store. Unfortunately, the store’s policy was that, without a receipt, they would only refund the amount of the lowest sale price of the item in the last so many weeks. This particular frying pan had been on sale a month previous for $69.99, so that is what they gave us…in cash. Then we had to pay 29% on that $130 (plus whatever else we bought on that card in the coming years and only paid the minimum on. Oh and we also ate at their in-store restaurant many times when we had no food in the house and put that on the card too) for however many years that we had the card. Young and stupid.
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Just one? Ha…my DH and I have made plenty…from passing up on 10 acres of land for a steal before the housing boom to buying “toys” that we’ve had to sell to make it through the seasonal unemployment cycle.
I’d say the kicker though is the new (to me) car I HAD to have. My car was paid off and running just fine. I had just had our second child and saw the new car on the lot. Decided not to trade DH’s truck in because they didn’t offer us a good price for the trade in. Got saddled with two car payments plus the higher insurance due to the financing on the cars. His truck was only a year old. The kick in the pants? A week later, my DH got laid off – in the height of the summer season – after we had already signed everything and the financing for the new car. Fortunately we were able to sell the paid off car but we’re still kicking ourselves for not just trading in that truck…especially since we recently sold it. Oh well…live and learn as MC says…
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I once got an internet connection with Compuserve way back in the 90s. Well, Compuserve’s service was terrible, so I switched to a different company. I never canceled the compuserve account for TWO YEARS! I paid $19.99 a month for two years for a service I never used just because I was too lazy to call them. I wasnt wealthy at the time either. I was barely getting by via temp jobs that made $8 to $12 an hour. So really, I was working for Compuserve two hours a month for free.
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Sounds like my Netflix subscription–I had “The English Patient” for 2 years and never watched it–
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Me too! I had Magnolia for months and never could bring myself to watch it.
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I’m really impressed you all know what mistakes you made with money. I recently decided to figure out how much money I have made throughout my working life (I’m only 26). That number is $245,000. Wanna know what I have to show for it? $17,150 in consumer debt (I have paid off $3300 since December though. Yay!) I have no idea where most of that money went.
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My first year out of grad school, experiencing my first serious paycheck after six years of living hand to mouth, I did a lot of things while repeating the mantra, “It’s OK, I have a salary now, I can pay for it”:
-I didn’t ask whether my salary, which officially began in September, could be prorated to begin in July instead when my money ran out. Two months worth of expenses on the credit card.
- Before I had even received my first paycheck, I took a ten-day driving vacation to Maine with my then-boyfriend which cost me $1500.
-I bought department store furniture (couch, dining room table and chairs) on credit
-I went out to dinner, movies, etc. all year long without even looking at the cost
-I didn’t save up in anticipation of family birthday gifts or Christmas travel and gifts
-At the end of the school year I participated in a three-week hike in Spain. Equipment, airfare, travel: about $3000
One year after beginning my job, I had racked up $9000 in credit card debt. I didn’t even want to open the envelopes!!! That was the start of serious budgeting and frugal living for me! (I paid it all off in a couple of years, but still. Lesson learned.)
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My biggest money blunder was to pair a 40% pay cut with a 0% spending cut. And I couldn’t understand why I just couldn’t seem to save for a rainy day.
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Thankfully our biggest financial foolery was a fairly small one.
My husband and I were engaged and invited to a “cooking show” with a “free trip just for coming!” It turned out to be a sales pitch for really, really expensive cookwear. The financing seemed to make sense, and although I was uncomfortable with it, I let my fiancé tell me “Yeah, with these payments, we can totally afford it!” And we walked away with $1200 for three pots, a steamer, an electric skillet, knives, and some utensils. That’s at least 3x more than you should pay, and we definitely couldn’t afford it. We ended up dumping most of our savings to pay it off at once because we were too embarrassed to keep paying monthly payments. Oh, and we never looked into the free trip (that probably wouldn’t have been free).
It was painful, but it really taught us to think before we make big purchases, and not get talked into a sales pitch.
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The most expensive mistake we made was rushing to buy a house before having kids. We were in our mid-twenties, living with 6 people in a two bedroom house. It was crowded, but it worked, we got along, and out rent was only $100 each. We decided it was time to start our family, but we didn’t want to leave our co-habitation situation, so we decided we *needed* to buy a house right away that was big enough for all of us before we got pregnant.
That was in 2008. It wasn’t the peak of the boom (thank goodness) but things have still gone way south from there. Turns out, we can’t get pregnant without IVF, so three years later we are still childless. We SO should have waited to buy!
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I dumped $15k into a 12 year old Ford Mustang (which was worth about $3500) in the form of “upgrades” to make it go faster. Then Ford released the 2003 Cobra edition of the car, which was just as fast as the one I spent all that time and money on. When I realized that building fast cars was really just “the guy with the biggest paycheck wins”, I got a bit disenfranchised with it as a hobby. I don’t know why it took the release of a new model to make me realize that, but I was seeing that anyone with $35k (or decent credit) could go grab a brand new one off the lot that was just as fast as mine, and it wasn’t fun anymore.
I was doing this on a college student’s salary, so of course most of that $15k was debt.
Then my car got stolen and stripped.
I wish I was the guy above who’s biggest financial mistake was breaking a used cell phone.
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Me too.
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Bingo. “Upgrading” cars is a waste of money. Just buy something faster (there’s always something faster).
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Ah reminds me of my husbands comment, “It’s more fun to drive a slow car fast than it is to drive a fast car slow.”
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