We learn more from our money mistakes than we do from our money victories.
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, FemmeCents, JumpStartFromScratch, TheFrugalGene, 99to1Percent, GenYMoney, AtypicalLife, WinningPersonalFinance, ChiefOfficerMom, ForeignBornMD, TheCashDad, and KiwiandKeweenaw.