Updated on 03.15.07

The Checkbook Confessional: My Five Worst Financial Moves So Far In 2007

Trent Hamm

This year (so far) has been a strong one financially for me, but I still make some moves that are of questionable financial nature. In terms of saving for the future, here are my five worst moves so far in 2007 and why they were bad ones. By reflecting on my choices, I can strive to continually improve my personal finances.

We conceived a second child. This child is coming in late September. This is a great personal move, but a terrible financial move: another mouth to feed, clothe, house, and insure. That being said, it’s definitely a move I’m happy with considering the overall picture.

I bought my wife a laptop and a copy of Office 2007. She had an old desktop machine that was still (mostly) functional but it was giving her some headaches, especially since it had started spontaneously powering off and rebooting on occasion. So, on Valentine’s Day, she had a gift on the table: a new Sony Vaio laptop (that she had eyed in the past) plus a copy of the latest version of Office (she uses Word, Excel, and PowerPoint in the classroom). It was expensive and probably not wholly necessary, but my wife was so thrilled I’m actually wondering if she loves her laptop more than me.

Cat food and cat littler. I made a huge error buying these in bulk. Less than two days after buying a huge amount of both (that seemed like a good deal), the brands of both we used cut their prices everywhere a bit, plus the place we buy our supplies also had a huge sale on the items in bulk. I overpaid by about 35% on the bulk purchase. I realize it’s hard to know that such things are going to happen, but looking at prices and realizing I could have saved $50 or more by just waiting two days was painful. Even worse, I could have foreseen this price change had I done a bit of research before buying.

I ate out for breakfast and lunch way too much. I’ve been entertaining a lot of guests recently and thus have eaten meals out with them on a very regular basis, depleting my cash more than I would like. I should just invite some of them in for a home-cooked meal, but that also detracts from the conversation potential.

I bought into an index fund too early. I intended to buy into a broad index fund on the way down, but I got excited and it dropped a little more after I bought it. I still got about a 6% deal off of where the market peaked, however.

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  1. Moe says:

    I like your honesty. With that said… why a Sony Vaio? I would have easily gone for a Mac for many reasons. The most important: They last longer than your average pc. Plus, you have alot of useful software (unlike all the bloaware that comes from pc’s). You also don’t have to buy any virus software (at least a $60 yearly savings) and for education, they are considered the best computers.And you can get MS Office for the mac at a cheaper price than MS’s 2007. Even if you wanted to go with PC’s, Sony is the pricier company for anything pc’s.

  2. Chris says:

    @ Moe

    I own a Mac and probably wouldn’t recommend buying one if the majority of stuff used is Office. I spent $1300 on mine and only use Quicken, Firefox, iChat, and a few others. I knew I wouldn’t use it to its full potential, but i’m only 24 and my friends would have dis-owned me if I bought anything else than a Mac (semi-kidding). If the Vaio was over a grand, then yes- a Mac. If under $1000 then it was a solid investment. Speaking of bloatware, 1 gig is wasted on my mac from GarageBand. iCal is a waste, .mac is a waste, not to mention you have to pay for .mac or whatever it’s called.

  3. Karl says:

    I think you are being a bit hard on yourself there on two of your “bad financial decisions”.

    In terms of buying the index fund and the cat food/litter, good luck trying to buy it when it is at the low. Unless you have some sort of psychic ability that the rest of us aren’t aware of, I’m not sure you can really blame yourself. Hindsight is 20/20, nobody’s ability to predict the future is.

    Anyways, keep up the great work on this blog.

  4. Jon says:

    Paying for antivirus software isn’t necessary even on a PC. Try AVG. It’s free and I’ve never had any problem with it.

  5. LNLisa says:

    “…another mouth to feed, clothe, house, and insure.”

    LOL, that reminded me of the first few pages of Peter Pan where Mr. Darling is trying to calculate whether or not they can afford to keep each of their children:

    “For a week or two after Wendy came it was doubtful whether they would be able to keep her, as she was another mouth to feed. Mr. Darling was frightfully proud of her, but he was very honorable, and he sat on the edge of Mrs. Darling’s bed, holding her hand and calculating expenses, while she looked at him imploringly. She wanted to risk it, come what might, but that was not his way; his way was with a pencil and a piece of paper…”

    :D One of my favorite passages from that book.

  6. Why didn’t you consider acquiring a free software, like OpenOffice? It’s fully functional, highly professional, and most people don’t even notice you have changed from Word to another piece of software.

  7. gp says:

    does your wife teach? did you buy the education version of MS Office for about 1/4 the price?

  8. kamikasee says:

    After a significant price drop, a lot of stores will allow you to bring your reciept back in and get a refund for the difference within a certain time period.

  9. kellie says:

    Did you go to the store you bought the Cat litter at and ask them match the current price? Most stores will match a price if it changes from what you paid within 30 days. It’s worth a shot.

  10. Garrett says:

    Don’t throw the old pc away, the random powering off/rebooting can be fixed easily with a new power supply.

  11. 3bean says:

    I’m curious why you think entertaining at home deadens the conversation? I find the opposite to be true– that people seem more relaxed and speak with more candor at home (be it their own home or someone else’s). That bring said, I don’t have kids, so maybe having little ones around changes the conversation– or maybe you are entertaining business clients.

  12. RG says:

    It may be a small thing – but make your own baby wipes (use a paper towel)or use a damp washcloth. I happily save $5-10 a month doing this.

    My worst mistake – purchasing plane tickets for $250 each ($1K total) and then seeing the same tickets a week before our departure for $100.00 each. I could have cried – actually I did cry.

  13. TiP says:

    gotta second the OpenOffice suggestion. There’s really no reason to pay good $$ for Microsoft Office anymore.

  14. Jodi says:

    Congrats on your wife’s pregnancy! My husband and I are expecting in early september. Again, not the most financially sound decision, but who in their right mind would become a parent? You have to be a little crazy to undertake it. But very very worth it.

  15. Moe says:

    I wouldn’t call Garageband boatware. Its part of the iLife applications. If you don’t use it, get rid of the sample songs. Oh, and .mac is not even part of the hardware. So I’m not sure where you are coming from. You can use any pop3 or imap free email set up for Apple’s mail. In any event, you could have ran both windows and OSX on a mac with a full functional Office suite. I also agree that it would have been better to go with a free open source office alternative.

    As long as you are happy with your purchase is all that matters. Sometimes you get what you pay for. And when it comes to computers, the expensive route is better than the cheap route. At least we don’t pay what they used to be (back in 1994 I paid 2.5K for a pc tower with memory that can’t even hold an iTunes playlist).

  16. Greg says:

    Children are the best place your money can go! Forget the bean counting, the payback is beyond anything money can measure!

  17. Kevin says:

    I find it simply awesome that one of your biggest financial mistakes was related to cat litter. Fantastic.

  18. Debbie says:

    If these are your five worst financial moves so far, you are amazing. I define a bad financial move as paying for something that you didn’t really want or that you didn’t want as much as other things you could have bought or that you could have paid less for with a reasonable amount of research.

    The way I see it, #1 and #2 are well loved and thus well worth the money and thus not bad financial moves. Unless you could have figured out a way to save on #2 without undue time and trouble.

    For #3 and #5, you could have guessed better in playing the market or you could have guessed worse. Sounds like you did fine to me.

    For #4, again you feel you are getting good value. But like another commenter, I am wondering why you think people talk more when out. Is it because you would be busy cooking at home? Maybe you can think up a way to make cooking at home work better for you.

  19. reulte says:

    Having a 2nd child within a relatively short time is certainly less financially sound than having them “in bulk” (i.e. multiples of twins, triplets) but certainly more financially rewarding than waiting until after you’ve already gotten rid of all the baby things and sent the first one off to college.

    More seriously though,
    (1) “another mouth to feed”? Wife might want to breast-feed; I did it for 18 months while working full-time; definately worthwhile both financially and personnally for this single mom. Also, kids really don’t eat a lot on their own unless told to ‘clean their plates’. On the other hand, cleaning supplies bills will go up. Toddlers don’t actually eat, they absorb nutrients via osmosis through their skin.
    (2) “clothe”? Nah – skip the cutsie outfits or let grandma buy them, My boy is 5 years old and all I have purchased for him is underwear, 1 swimwuit, and socks. Ok, ok – he’s the only grandbaby and grandma loves to buy his clothes; however, we always go to GoodWill shops or yard sales. In your case, there will be handmedowns which kids don’t mind wearing (particularly if they hero-worship their older sib) until they are much older. Semi-nudity is perfectly acceptable to young children at home. In fact, even if they start dressed they end up wearing only a diaper, 1 sock, and maybe a t-shirt. Babies are easier, cheaper, and much more fun to clean than clothes.
    (3) “house”? What?! You’re getting a second house just for the baby? Trust me, s/he won’t like living alone for about 14 years. Actually, any additional housing costs incurred by the presence of more than one person are incrementally smaller. Unless one sleeps with the window open and the other turns the heating full up.
    (4) “insure”? Same principle as for housing, most health insurance increase only slightly for additionally people. My insurance, for instances, has a ‘single person’ rate and a ‘family’ rate — no matter how large the family. Makes me think about adopting just to get my money’s worth.

    All-in-all . . . Congratulations.

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