Friday, December 8, 2017
My 7 Worst Money Mistakes
I try to keep it as real as possible with the posts I create. For me, more knowledge was learned from doing things the hard way then was taught to me in a book. Part of why I stay candid was because it is a wish of mine that others don’t go through the tribulations I went through. This week at Budget Boss was all about the mistakes we make with money. To be honest, I don’t know many people that have been worse with their money than I used to be. I was a complete Money Moron, so much so that I am ashamed of many of the choices I made. Some people will say that being a fool is all part of growing up. I don’t think it has to be that bad. I think we can learn from others and limit the mistakes we make. In my post today, I am going to describe the 7 worst Money Mistakes I’ve made. Hopefully, it leads others down an easier path than the one I took to financial security.
1) Not saving up for post-secondary
When I was in high school I had a pretty sweet job. I was making $12 an hour working in a warehouse driving a forklift from grade 10 to grade 12. This was back when the minimum wage was $7 an hour. It was more than enough to afford a car, new clothes and all the things a teenager could want. When I was ready to head off to university I had virtually nothing saved up from working part-time. Given that I was living with minimal expenses, I could have taken a year off and saved up a solid amount of money for university. Instead, I chose to head straight to university with no savings. This required me to borrow money for the essentials including housing and even food. This also caused me to rack up costly debt just for basic living expenses. Looking back, I should have taken a year or two to save as much money as possible and make my life a little easier during university.
2) Not listening to my parents
Do mom and dad know best? Well, it turns out mine did. They wanted me to take a year to save some money. They thought I should have put myself on a budget. They said I spent too much money on nonsense. Turns out most of the things my parents told me were true. I guess they knew what it was like growing up without much and were trying to prepare me for that. Either way, I now know that if I would have followed much of what they said to do I would have been better off. It was as if I could listen to someone else say what they said, just not them. Young people are funny, aren’t they?
9 Tips for Maintaining a Positive Cash Flow – Budget Boss
3) Stacking up personal debt
The student loan was a necessary evil to go off to university. I couldn’t afford to go on my own, so I had to take it out. Looking back, I probably should have limited my borrowing on that front. I definitely could have toned down the personal debt. Credit cards and lines of credit are not good in the hands of a young Money Moron. I had 4 credit cards when I was 20 with a total balance of $3000. Some wise guys thought it would be a great idea to set up a booth and give away a free t-shirt if you sign up for a credit card. I came for the t-shirt, I stayed for the debt. Soon enough I had maxed all 4 out and had no other means of emergency funds. It was a desperate time and I should have spoken to someone about my situation. If I kept it to just the student loan I would have been better off. Student loans have flexible repayment options where the credit card companies were ruthless in how they treated me.
4) Wasting too much money on garbage
This goes back to the last point, I spent a lot of money on junk that didn’t mean anything to me. In my early 20’s I was making decent money waiting tables. I would spend it as fast as I made it, living it up at the bars. I was blowing hundreds of dollars a week when I could have been paying off debt or saving a little bit of money on the side. There is no doubt that I could have saved enough during the school year and the summer to have paid my tuition throughout the year. Instead, I chose to have fun and because of that, my grades suffered as well. Some people say you should do it while you are young. I agree, but only to a point. Starting the habits of bad spending while young makes it harder to break when you are older. If I would have lived in moderation back then, I could have shaved years off repaying debt and had much more saved up now then I do.
Consumed By Our Consumer Society – Huffington Post
5) Not having a cent saved until I was 25
I look back at all the missed opportunity when it comes to saving and it makes me sad. 10 years I could have been saving even a little bit of money every month and it would have amounted to a huge amount by now. Something as small and obtainable as $50 every 2 weeks could have landed me 20K by the time my 20’s was over. I could have easily afforded that and still paid off all my debt. Not only was not saving bad, the mentality of not saving was even worse. When I started saving money it was a constant struggle to put money away. That could have been a lot easier if I had been doing it all along. All I would have had to do was up the amounts a bit more and get aggressive. That’s a lot easier than trying to save from scratch. This is why it’s important to teach our kids about saving when they are young.
6) Not picking the right degree
I chose Political Science as my degree because I loved history and politics. I really should have chosen something that offered better job opportunities at the end of it. I think it is important for people to do what they love but within reason. You must pay your bills and you have to pay off your debt when you are done school. Not getting a job in your field might cause that to be very tough. There is an epidemic of students graduating and then not working in their field or finding gainful employment at all. This is causing the younger generation to be poorer than ever before. I had thought about this while I was preparing for university but thought maybe I was different. I went about my whole university experience the wrong way and focused on the wrong things. I think post-secondary should be taken as job preparation and not as knowledge enlightenment. The days of reading a book in the woods are over and that ended when then made university so unaffordable for students.
Students’ 20 top tips for picking a course – The Guardian
7) Not standing up for myself at work
I have worked for some real gems in my day. I think it is imperative that everyone push for what is deserved in the workplace. For far too long bad employers have gotten away with fear-mongering and scare tactics to keep their employees underpaid and overworked. It is so easy when you are young to fall victim to this. I have been stolen from by employers, had my hours cut, my job threatened for nonsense and been yelled at for no good reason. I think everyone must understand their worth to the world, and if there is someone in your life that doesn’t believe that, you must get rid of them. This most certainly includes employers. When someone is getting in the way of you paying your bills, that to me is a disgrace and must be dealt with. I wish I was stronger when I was younger.
Money mistakes are just that, mistakes. They can be fixed, and they can be overcome. The key is to recognize the problem and take the steps to make it better. Being oblivious is not going to fix it and procrastinating only makes it worse. I know this first hand. Do yourself a favor and correct the wrongs before they become much larger and costlier.
Thanks for tuning into Money Moron week at Budget Boss. Join us next week as we jump into another great topic on personal finance. If you have any questions about your finances, please feel free to contact me at joe@budgetboss.ca. Don’t forget, our “2018 Financial Goal Setting Workshop” is next Tuesday, December 12 at 5 PM from Innovation Works in Downtown London, Ontario. Have a great day Bosses!
“Take chances, make mistakes. That’s how you grow. Pain nourishes your courage. You have to fail in order to practice being brave.” – Mary Tyler Moore
Email – joe@budgetboss.ca
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