What Was Your Biggest Financial Mistake?

Biggest financial mistakes

Are you human? You are? Then congratulations, you’ve probably made your fair share of mistakes! But have you ever made any big mistakes with your money? Most of us have, and it’s usually not much fun.

However, the best thing to do with these kinds of mistakes (as with any difficult circumstance) is to use it as a lesson that you, and others, can benefit from.

That’s what our CEO, Rod Ebrahimi, did today when he agreed to be featured in MSN Money under the headline “Experts Confess Their Money Mistakes”:

He was included among a group of 18 personal finance bloggers and experts who talked about some of their worst financial mistakes. Because, after all, first-hand experience is one of the best teachers! If you want to find out what mistake Rod shared, check out the MSN Money article.

Single Post Advertisement
Ready to pay off debt faster?
We can help you make a free, personalized plan to pay off your debt as quickly as possible. Our free tool shows you which debt to pay off first. Try it now.

Try it out

But keep reading below to see some of our favorite stories shared by our friends in the personal finance community… and to find out how they responded to their mistakes.

Dave Ramsey (the Dave Ramsey Show“)
How he fell down:
More than 20 years ago, my wife, Sharon, and I went broke. We lost everything due to my stupidity in handling money, or not handling it, as the case may be. I was good at real estate, but I was better at borrowing money. We went through financial hell and lost everything over a three-year period of time.

How he got back up:
I came to realize that my money problems, worries and shortages largely began and ended with the person in my mirror. I realized that if I could learn to manage the character I shave with every morning, I could win with money.

Liz Weston (Money Talkand MSN Money)
How she fell down:
I didn’t know very much about investing in my 20s. I signed up for the 401k at the Anchorage Daily News, where I was working as a feature writer, and then got mad at the company when my mutual funds lost value in a downturn. I thought it was the newspaper’s fault somehow.

How she got back up:
I started reading personal finance magazines, which helped me get a little smarter (and stop blaming my employer for market downturns).

Luke Landes (Consumerism Commentary)
How he fell down:
When I was younger my car seemed to attract police, who seemed almost delighted to pull me over for speeding. But I continued to ignore the tickets. For some reason, I thought my life would be better if I stuck my head in the sand and ignored the tickets and fines

How he got back up:
I realized I needed to start taking some advice I had received to heart. I needed to start being actively involved in my life and the day-to-day choices I was making, not just about my finances.

Brad Chaffee (Enemy of Debt)
How he fell down:
For us it was buying into the whole credit score system. We were taught that we had to build our credit so we could have stuff — by our parents and society. In 2007 we decided to reject that way of financial planning and started working to become debt-free.

How he got back up:
We decided that we would no longer borrow money for any reason and that any financial decisions we made would be based on what was good for our family and not because of what our credit score would or wouldn’t do. Today we’re completely debt-free, have no credit cards, couldn’t care less about our credit score and as a result are happier than ever.

Glen Craig (Free From Broke)
How he fell down:
Even though I knew credit cards could get out of hand, I let it happen anyway. It wasn’t quick, though. It was over the course of many years. But in that time I amassed thousands in debt.

How he got back up:
One day I realized it was ridiculous to be paying a good chunk of my small paycheck to various credit card companies every month. What I was paying out in credit was stopping me from using my money in better places, like savings and retirement. I made the decision to pay down my credit cards and get my finances back on track.

Ninja (Punch Debt in the Face)
How he fell down:
Taking on my student loans without educating myself first. The sad truth is, each year I took out the maximum federal student loans I qualified for.
By the end of my senior year, I was $28,000 in debt and only had a few bucks in my checking account. I wish I could blame the bank, my school or someone else for my debt burden, but in reality it was my fault.

How he got back up:
I ran the numbers and realized if I only made minimum payments for the next 20 years, my total repayment would be just shy of $53,000. That’s insane! Instead of wallowing in self-pity, I decided to do something about it. I made a budget, lived within my means and paid that sucker off in just over two years. Sending in that last payment was one of the most liberating things I’ve ever done.

Adam (The Credit Blogger)
How he fell down:
It’s so easy to pull out that credit card and charge something you think you need. It’s worse when you do not make enough money that you have to charge groceries and gas. This happened when I became a father of boy/girl twins at 18 years old and was trying to go to college as well. My wife, now ex-wife, and I struggled for years trying to get by, but we were getting further into debt.

How he got back up:
I read about debt settlement and used it to pay off over $43,000 in six months. I still have over $16,000 in credit card debt but am slowly paying it down and look forward to being debt-free.

Geri Detweiler (Credit.com)
How she fell down:
I’ve made plenty of mistakes. The most expensive was probably investing in residential real estate after we moved to Florida several years ago. We bought before the boom, so we bought low, but the bust here has made that low seem high.

How she got back up:
I’d like to say I have found some brilliant solution to that one, but we’re just riding it out and hoping for the best.

Steve Rhode (Get Out of Debt Guy)
How he fell down:
I started a real estate company. We bought acreage, developed it and started selling it. Not long after, in 1989, the real estate market tanked. I kept thinking the next sale would be the big sale that takes care of all our problems. Pretty soon I started putting a lot of those expenses on credit cards. We declared bankruptcy. It was horrible. After that, we went through the motions day to day, but we had lost who we were.

How he got back up:
I think people who regularly read my site at GetOutOfDebt.org will find that my experience has given me a more holistic approach to dealing with problem debt. Dealing with financial problems is about placing the difficult situation into a larger context that includes financial safety moving forward and not just engaging in a knee-jerk reaction for the perceived problem right in front.

Lynette (AskTheMoneyCoach)
How she fell down:
was dating a guy in college, and it was the holiday season, and we were window shopping. He saw this brown leather coat in a store in a store, and he said, “Oh, this is nice.” He looked at the price tag and put it back real quick. It was four or five hundred bucks. So I went back later and bought it for him. I was a starving college student, living on ramen noodles. And after I bought the coat, I couldn’t afford to pay my car note for two months. So one night I go outside and discovered my car was missing.

How she got back up:
I always talk about the “dreaded d’s”: downsizing, divorce, death in the family, disability or disease. I’ve experienced many of these things myself. I’ve had a divorce. At one point in 2001, I had $100,000 in credit card bills. I was a classic overspender. Fortunately, I was able to pay them all off in three years. Now I treat them all by saying, “This is an issue I struggled with, and I’m just going to write about it, and maybe it can help other people.”

J. Money (Budgets Are Sexy)
How he fell down:
The one biggest mistake we made actually changed my career life forever and brought me to being a full-time blogger today. For us (my wife and I), it was buying our first house five years ago. Not because it was at the peak of the real estate boom (it was), but because we realized that we are not meant for homeownership. I personally enjoy moving every two years, having been brought up in the military, and as you well know, that’s no longer feasible when you “own” a home.

How he got back up:
Because of this crazy decision of ours five years ago, I am now a happily self-employed man following my dreams of blogging and building projects online full time. And not only that, but we have grown our money (and knowledge about money) 100-fold and have a much better understanding of what we hold important in life than we ever did before.

_____

So we wanted to ask you — what’s your biggest money mistake? How did you respond to it? By sharing your experience with others, you can help people avoid the traps or pitfalls that caught you, and in seeing others’ stories you might just learn some valuable tips yourself! So let us know in the comments below, or on Twitter or Facebook… what’s your worst financial mistake?

Have you tried ReadyForZero yet? It's a free online tool for paying off debt.

Try it now

Receive updates:      
You can always unsubscribe by clicking on the link at the bottom of each e-mail.

  • Ross

    I married a woman, period.