Budget Bungles, Money Muddles, and Fiscal Flubs

We learn more from our money mistakes than we do from our money victories.

This is exactly what AJourneytoFI and ChroniclesofaFatherwithCents are trying to do with this new chain gang. What money mistakes did you make and how can the rest of us learn from your errors?

A noble endeavor and one to which I can certainly contribute some bone head plays of my own. So many seemingly good ideas turn out less advantageous than we once thought. At the end of the day you just don’t know until you get out there and try.

I wanted to avoid some of the more common mistakes that I am sure we shall see over and over again on a list of this nature. Things like buying a new car, smoking, or not investing enough early on in life. (Although I am guilty of all of those).

For starters, I should not have gone to a PRIVATE law school. I could have gone to a perfectly good state school for 35% of the cost. I ended up paying $20,000/year when the state school equivalent would have run more like $7,000/year.

This blunder cost me $50,000 more in loans over the three years it takes to finish a Juris Doctorate. Especially now that I realize Where you went to school does not matter that much when you are no longer talking about a top tier school.

Next mistake also concerns law school. (Pattern developing?)

I was specifically told NOT TO WORK during my first year of law school. The prevailing logic at the time is that adjusting to law school will be so difficult that you should try to focus on nothing but your studies for at least the first year.

This might be true for some people, but in retrospect, I could have handled working along with my academic duties. I have always had a job since I was 14 and all during undergraduate I was working at multiple jobs. (It’s a poor kid thing.)

Working my third year, making even $10 an hour cut way down on the loans I needed to function. This listening to the wisdom of others cost me another $25,000 worth of loans.

So that is now a whopping $75 g’s that I cost myself without knowing any better. Student loans are the modern yoke of our times.

Another big time gaff was more about unfortunate timing than a bad choice. My wife and I; sold a house, quit our jobs, moved to another state, found new jobs, built a house, and had our first baby, all inside of a 6 month period. It was one wild ride.

We built a house from scratch in late 2005. This missed the absolute peak of the housing market madness by about 18 months. What does that all mean? We probably paid Way Too Much Money.

Had we known better, we could have sat back, rented for 2 years, and then got something for a song once the bottom fell out of the housing market. But who knew? Certainly not me. I was glad to sell my old house for a good chunk more than I had paid for it and just assumed these prices were the new normal.

I think it took 10 years for the appraised value of the house to get back to what we have into it. 10 long years.

Lastly, I will leave you with a story about the price of Gluttony. My wife and I love to eat. Especially to eat out at restaurants because we both work and nobody is really that good at cooking. Plus we lived in Chicago for a decade and the Windy City is an eaters paradise.

Add some kids to the mix and once they were out of the new born phase we resumed our blistering dining out pace. Really, we were on track for some kind of anti-mustachian record. I have set the butcher bill at $6,000 – $10,000 a years for years. You can read about my feeble attempt to justify such spending here.

I have since reigned in this spending as I became more conscious of my FIRE discipline, but much of the fiscal damage had been done. I am left with the legacy of a happy marriage and 30 extra pounds of ‘dad bod’.

Leaving on a happy note, I am halfway back down to my ideal weight and moved far away from that culinary temptress sweet home Chicago.

What money mistakes are you willing to share?

Other bloggers have joined in the shame fest; ThinkSaveRetire, TurningPointMoney, FemmeCentsJumpStartFromScratch, TheFrugalGene, 99to1Percent, GenYMoneyAtypicalLifeWinningPersonalFinance, ChiefOfficerMomForeignBornMD, TheCashDad, and KiwiandKeweenaw.






15 thoughts on “Budget Bungles, Money Muddles, and Fiscal Flubs

  1. Good lessons here. That six-month period sounds like a real wild ride, I don’t know if I would have been capable managing that.
    (Insert confession bear here) My biggest money-sin is half-assing school, thus wasting approximately 5 years of my life and early earning potential alongside other resources. That is family time and money which I will never get back. If I would have been smarter we would be far further financially (and maybe personally too).

  2. That’s the beauty of this initiative, one of the mistakes I didn’t capture on my post was the one you mentioned about working while in college. Thanks for sharing that one. Back home (Venezuela) it was considered “normal” to take summer as a period to cool off and just enjoy time after the hard work during the prior semester. Looking back I totally missed the boat on being able to work to get experience and make money while at it. Sometimes, I feel like we let ourselves be numbed by what others consider as normal instead of doing things that will be beneficial regardless of what everybody else thinks.

  3. Hey this reminded me of one of the mistakes I forgot to mention in my post. When I was looking for a grad school I was pondering to going to my state university where I got my bachelors and took the GMAT(entrance exam to get into grad school) where I had to pay $200 to take it. I failed badly because I wasn’t aware of how to study for it. I didn’t want to retake the exam because of the $200 fee.
    I ended up going to a private university for my grad school(they have their own entrance exam with no fees and I passed) where I had to pay close to $45K in student loans after graduation.
    If I retook the GMAT exam and actually studied by reading prep books I probably would have passed. And going back to my state university would have cost me only $15K.
    Now looking back, paying another $200 to take the GMAT would have only hurt me in the short term because in the long term, it would have been way cheaper than going to the private grad school I ended up going.

    • Those big tests have a way of steering our lives. I took the LSAT on purpose to avoid the math on the GRE, ended up a lawyer instead of ???

  4. There are no mistakes in life…only learning experiences! =) At least that’s what I try to tell myself. Maybe if you went to a state university or worked during law school, you might not have ended up where you are today. Who knows. I went to law school part time in the evening and I’m kind of glad that I did because knowing me…I wasn’t going to get a big law firm job anyway. Having a full time salary definitely reduced the amount of loans I took out. I would have gone to a state school but it wasn’t that close by and I’d have to quit my job. I also work in government.

    • Now that you mention it, I forgot to admit that I met my lovely, high earner wife in that law school, she was a year ahead of me. Maybe on balance, going private wasn’t a mistake. I will have to run the numbers 😉

    • Weather we call them mistakes, opportunities for improvement or something else, as long as there was a lesson learned and some sort of change in your behavior I’d say it’s all good. If you make the same mistake over and over and over again then we may have a problem…. stubbornness?

  5. Lol, dad bod and a happy marriage are totally worth it! I know what you mean about eating well, there are so many great restaurants to enjoy and one can easily become a “Foodie”.

  6. My money mistake is taking out too much in student loans. But we definitely do learn more from our mistakes and failures then from our successes.

  7. My shame from a few years back, was getting suckered into purchasing an extended warranty for a vehicle. I was less financially savvy and more trusting back then. The warranty essentially covered nothing and filing a claim was insanely more difficult than even a health insurance claim. They will fight you on every little thing and blame the issue on a part that is “surprisingly” not covered.

    Might as well just light the $1,600 on fire and get more value from the warmth.

  8. My biggest financial mistake was going back to school to get a PhD that would actually lower my earning potential. It was for a passion that I ultimately liked a lot less at the PhD level (luckily I wised up and quit before sinking 5 years into it). Lots of forgone income but luckily no debt from that decision and it all worked out well in the end.

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