Comments on: The Single Biggest Money Mistake I’ve Ever Made

By: Ro

Ro — Thu, 29 Apr 2010 23:15:50 +0000

I grew up in a home without any money because my father racked up credit card bills before it was a way of life. I remembered how it felt to be that broke. As a result I have rarely carried a credit card balance because I don’t ever want to live that way again – so broke.

By: Tina

Tina — Tue, 28 Jul 2009 16:34:47 +0000

I am a new reader and I’m really enjoying reading your current and past posts.
I had a similar experience in college, but I took the opposite route and decided NOT to make the purchase. Now I think of that as one of the best decisions I ever made.
Thanks for all the helpful information!

By: Lily

Lily — Mon, 27 Jul 2009 04:51:46 +0000

30 years ago I was in the military. I married a man 15 years my senior and we’ve been happily married for 28 years. I lived in the barracks, no plastic. My only two monthly bills were for a modest car and the insurance. I lived well within my means and sent money to my parents to help them out.

My new husband was used to juggling finances so I trusted him to take my money and pool it with his when we married. He had plastic, bills, rent, utilities, etc.

My “Golden Eye 077″ moment came when my husband and I discussed buying a house. In 1982 at 21 years old the thought of buying a $100,000 house in Southern California seemed impossible. But he did the number-crunching and described how it would work. Still not convinced, I asked, “What about saving money for a rainy day?” His response….. “We have enough credit for a rainy day.”

For decades later we struggled to make ends meet, living from paycheck to paycheck. Horrified once when I was fired from a job.

Recently, I resolved to get a handle on my finances. It was high time to grow up and take responsibility for my finances.

My husband could not be happier as he was under considerable stress doing it all. Now, he may not have the $ to run out and buy some impulsive “treat.” But he says it’s a small price to pay to have me share in the finances.

The most profound influence in helping to turn my financial status around has been the information dished out relentlessly by Trent on TheSimpleDollar.com.

Trent, your blog has transform the way I look at money. Reading your daily emails have been an inspiration. I have a looooooong way to go to become financial “healthy.” But you’ve empowered me with knowledge and motivation to stay on track. Slowly I’ve managed to get my husband on board. I’m now 48 and he’s 63. And it’s high time we get our finances in order so that we can enjoy the rest of our lives living out our dreams and not having to worry about running out of money.

Your blog has taught us how to make the most out of what we have. And how we were making very bad, choices.

I am now optimistic about our financial future and I have you to thank.

Thanks Trent!

By: michael bash

michael bash — Sun, 26 Jul 2009 20:14:07 +0000

I was born in 1944, my brother in 1947, our parents in 1915 & 1916. We learned this frugal economic stuff growing up. My Dad was a university prof. by the way. From what Trent says somewhere along the line the “frugal economic stuff” stopped being taught/learned. That’s the problem, e.g. the house of cards housing problem. The song says, “I want it all, and I want it now!” I think we’re in big trouble.

By: Amy

Amy — Mon, 29 Dec 2008 22:55:01 +0000

Great entry! You should send it to the federal government…oops, too late.

By: Johan Idstam

Johan Idstam — Sat, 02 Aug 2008 18:08:22 +0000

Hmmm, Google served me an ad for an American Express Gold Card when I read this post in Bloglines.

Ironic.

/johan/

By: Brad

Brad — Wed, 30 Jul 2008 16:49:45 +0000

I grew up in a frugal house. I could go on but most people who know what that means can guess. When I started working at 16 I was cocky because I made 10x what my friends did. I was making about 3k a month as a programmer. Then I moved to the USA and I currently make 72k a year. I am 24. For the last 5 years I have overspent, not saved a penny and regretted every second of it. I had debt, upsidedown (twice over) new cars and live in a 2k a month apartment.

I have a 5 year plan to get out of debt, own a house and get my family started. You live and learn. But when I think about what I could have done with the extra 2k a month I had for 5 years and I try to figure out what I did with it, it makes me pretty sick. I BLEW IT ALL.

It felt great when I did it.
It feels terrible every day now.

By: Brandon

Brandon — Wed, 30 Jul 2008 15:56:03 +0000

Growing up fairly poor and witnessing my mother make money mistake after money mistake I was really timid of getting a credit card. I made it through undergrad, law school, and my MBA without ever getting a credit card. I was “cash only”.. When it came time for me to graduate and buy my 1st home, guess what? my credit score sucked.

I have a little sister who is going to college in a few weeks. I picked out a student credit card for her and told her (and our parents) that she should use it for food only, and only at a grocery store (more cash back). Credit cards are great tools, and there are lots of perks if used properly.

By: Christine

Christine — Wed, 30 Jul 2008 10:34:31 +0000

I really think this depends on your own personal level of self-control. My husband and I have a card that we use to go to concerts in the summer months. We are avid about it, and see any performer we like, mostly regardless of cost. Onto the low-interest card it goes. At the end of the concert season, we divide by nine and make large payments each month sept-may (we live in PA, and the weather is not good for concerts during the colder months). Next season, we go out again. It all depends on how you use it, or if it uses you.

By: James

James — Tue, 29 Jul 2008 21:15:43 +0000

I developed a similar behavioral pattern my freshman year of college 7 years ago. I got in the habit of going out to eat and recreational shopping and managed to spend most of the $5000 that had been in my savings account. I never looked at my bills or thought of budgeting. Not only did my bad habits destroy my savings, they strained my family and friend relationships too. Only after getting some perspective and taking a hard look at my lifestyle did things start to improve.

Goldeneye was an awesome game though. I was also a fiend on MarioKart 64.

By: Derek Wong

Derek Wong — Mon, 28 Jul 2008 16:42:25 +0000

Loved the Goldeneye on N64, though! :)

I’m definitely glad for the things that I learned while growing up. Things about being frugal, and dealing with money. It’s helped to avoid some of the pitfalls of life (at least for me).

By: liv

liv — Mon, 28 Jul 2008 16:17:41 +0000

I guess i should not have gambled in Vegas this weekend…

By: Tony

Tony — Mon, 28 Jul 2008 12:13:02 +0000

I never intended on a credit card. Then one day the local sub shop had a deal where you got a free sub when you filled out a credit card application. And I was hungry. A year later I had a maxed out credit card at $3,500. One of my worst offenses – regularly buying a keg on credit, charging $5 at the door, and not sending the cash towards the credit card bill.

But I learned from it. I’m glad to have learned the lesson early on. And it did make for a fun final two years of college!

By: randomlife

randomlife — Mon, 28 Jul 2008 04:05:41 +0000

Avoiding debt as much as possible is excellent advice, but I think you’re missing an important point. Sometimes paying extra money in order to get use of something earlier is more desirable than paying less for it later.

My point is that being aware of the extra cost and taking that into consideration should be taken into account in any of these credit decisions.

Let’s say I can’t afford to shell out $2000 for a nice trip to Hawaii next month. But if someone told me that I can either wait until I have saved up $2000 or I can go next month and just pay $40 a month for it, I think I would opt to go as soon as I could. EVEN THOUGH the credit plan would end up costing me say, $4000 total because the payments are spread out over a long period of time with interest, I think I would still do it.

Some people might say, I don’t want to pay twice the cost of something. But to me, that’s the price of getting to do it now instead of waiting years.

In my opinion, debt isn’t “evil”. You just have to look at what it will ultimately cost you and decide whether or not that price is too high.

By: Sisterfunkhaus

Sisterfunkhaus — Mon, 28 Jul 2008 01:52:06 +0000

It’s nice to see you write about this. My husband and I were in the same boat and are now out. It’s crazy how much better it actually feels to buy something and know that it’s yours and that you don’t owe anyone anything. We have far more money now and live better now than when we used credit cards. We have little worry and can save $$$ for emergencies instead of sending it to credit cards.

By: Sentient Meat

Sentient Meat — Sun, 27 Jul 2008 20:35:49 +0000

Yeah, but it was Goldeneye. My friends and I played that heavily in college. It’s not too bad: 1 system and game to be enjoyed by many friends? And today the most recent system I have is a GameCube. I always end up playing Rock Band at someone else’s house so I never have to pay for it. It all comes out in the wash. They got free gaming in the past, I get free gaming now.

By: Ryan @ Smarter Wealth

Ryan @ Smarter Wealth — Sun, 27 Jul 2008 13:32:15 +0000

Wow!
This is a great insight how such a small decision like buying a N64 can lead you down that path of destruction. Thankyou for your insight

By: Stop Getting Cheated

Stop Getting Cheated — Sun, 27 Jul 2008 03:09:37 +0000

Excellent post, Trent. I think the reason your site is so successful is because you are so transparent with your own shortcomings. Your honesty and self-awareness help us on levels far removed from finances.

“Every choice you make today, you have to live with tomorrow.” This might be the most profound statement I’ve read on the Internet in quite awhile. Nice job.

By: spaces

spaces — Sat, 26 Jul 2008 16:44:33 +0000

My biggest money mistake was financing a private law school with debt. The cynics in this business say “Go top 14, go public, or don’t go at all” and I have come to agree with that phrase. I worked my tail off during school, held various jobs, lived cheap and carpooled in, was frugal generally, and graduated at the top of my class into a ‘good job’, but school was horrendeously expensive. I graduated with enough student loan debt that I am forced to choose jobs, cases and clients — truly, to shape my career — based primarily on compensation. And I have been one of the lucky ones in this profession, I have never truly lacked decently-paying work.

Happily, the best decision I made was buying a small fixer-upper home in what became a gentrified neighborhood largely untouched by the current crisis. In a few years, I might be able to sell it at a substantial enough profit to finally pay off my educational debt and start over in another neighborhood.

By: jasz

jasz — Sat, 26 Jul 2008 16:34:51 +0000

Michael,
“Stop using credit” may not seem like exciting advice, but I wouldn’t say it’s easy! Over the last 40 years our society has urged it’s citizens to have everything they want RIGHT NOW.
Paying off (and getting away from) credit has been both the smartest and the most difficult financial move we’ve made. Sometimes the simple answer is the best.