How To Avoid My Top Five Mistakes with Money

Over the past 32 years of marriage, my husband and I have made our fair share of mistakes with money. However, you can learn from our example and avoid the same pitfalls.

To hear the stories behind the mistakes in honest (and hilarious) detail, watch the video or keep reading for my candid advice on how you can avoid doing what we did.

Here are our five worst financial mistakes, in order from least offensive to the most egregious.

Mistake #5 – Not Having a Budget

My husband and I wed in June of 1988. By the end of August, our bank statement indicated a balance of $29. Given the fact that the credit union required us to leave at least $25 on deposit to keep the account open, we were (for all intents and purposes) flat broke.

That was our first wake-up call. We began listening Biblical money management advice on Larry Burkett’s program every day on the local Christian radio station and systematically reading every book on finances that I could check out from the public library.

Slowly, we began to build a plan to track our expenses, pay our bills, and save for the future. Living on a budget soon became second nature.

You would think that not budgeting would rank much higher on my list, especially given the fact that we were flat broke just three months after our wedding. But, we’ve actually made greater mistakes than living without a budget.

How You Can Avoid This Mistake

Always have a written budget. And then write down your expenses to insure that you are actually living within your means and making headway on your short, medium, and long-term goals.

Mistake #4 – Listening to Bad Advice

I also call this story, “Never take a loan from a payday lender.”

We were purchasing new windows for our home. We had cash all saved and allocated for the project. Then, a well-meaning family member told us to take the 180 day, zero-percent, same-as-cash offer and leave that six grand in the bank on interest.

Here’s the deal, that’s called OPM (Other People’s Money). That means that we were, in effect, using other people’s money for six months, instead of our own money.

That, my friend, is always a recipe for disaster. The loan came from a well-known pay day lender. If we missed a payment, an astronomical interest rate would immediately be applied to our loan. Additionally, the interest would be backdated to the first day of the contract. That’s right! All zero percent interest rate offers are loans – and 75% of them are not paid back on time.

We made two payments. Then, I marched into that agency, wrote them a check, and ditched that debt at lightening speed. Lesson learned.

How You Can Avoid This Mistake

Be very careful when taking advice from others. If what they say varies vastly from what you’ve been told, take some time, sleep on it, and think it over. Check with others. Get more information. If their advice proves sound, you can always follow it later, rather than acting quickly and regretting it later.

Mistake #3 – Panicking in an Emergency

About twenty-five years ago, my husband was in a minor accident. It wasn’t his fault, but our beloved Chevette was totaled. We decided to take our time finding a replacement. However, the other guy’s insurance stopped paying for a rental car after just a few days.

I was getting rides to and from work with a co-worker and we were feeling the need to find new wheels in a hurry. We panicked and it cost us a great deal of money.

We test drove a station wagon, which actually broke down while we were test driving it. We still bought it! Yes, we make stupid mistakes sometimes.

It wound up being a costly error and within a few months, we ditched the lemon and paid a lot more from our savings than we wanted to for reliable transportation.

How You Can Avoid This Mistake

Don’t panic!

We now follow a five-step plan for emergencies. It involves thinking rationally, getting all the information, and carefully evaluating our options.

Mistake #2 – Not Having Written Goals

After discovering that we were flat broke just three months into our marriage, we began to figure out how to live on a budget. After a few months, we actually had a nest egg. However, instead of allocating that money for future (written) goals, we viewed it as, “One, great, big, glorious, green pile of cash”.

When our van needed replacing, we spent way too much of our savings on a newer van. We spent $17,000 when we should have been looking in the $8000 price range.

If we had been taking note of our savings, and matching those dollars up to specific goals, we would have been far better off and a lot further down the road to reaching those goals.

How You Can Avoid This Mistake

Have a written list of short, medium, and long term goals. Yes, even if you have a less-than-average income, you are not excused from this step. In fact, if anything it’s more important that you follow it. Having written goals and establishing a plan of action for reaching them are your first two steps in realizing your dreams.

Mistake #1 – Not Saving Early for Retirement

Oh, how I wish there was a magic portal that would allow me to go back in time and save even a hundred dollars a month toward retirement beginning at the age of 20. Seriously! All the compound interest would mean that my husband could retire, relieving us of a lot of stress.

But, that exists only in movies and fairy tales.

In the real world, we didn’t begin seriously investing in retirement until my husband was in his mid-forties.

Young people don’t realize that they need to look down the road to age 60 when they are 20. Just like the rearview mirror on your car, objects are a lot closer than they appear. In the same way, retirement is a lot closer than they think.

Under the Median

How You Can Avoid This Mistake

Follow my Five steps to Financial Freedom

  1. Set up a Budget and Save $2000 beginning emergency fund.
  2. Pay off debt.
  3. Save a 3-6 month emergency fund.
  4. Tackle your written short, medium, and long-term goals.
  5. Monitor your progress and continue to save for the future.

6 thoughts on “How To Avoid My Top Five Mistakes with Money”

  1. Great post, and great advice!

    My wife and I created a zero-based budget, which we track every Friday. We have been doing this for about 5 years now. Doing so has allowed us to build up our savings goal of a down payment on building our home for our family of 7 in the area we grew up in.

    Also, saving for retirement early in life has become such a crucial step! I enlisted in the military when I was 20 years old (34 now). I sure am glad I checked the box to opt into the federal version of a 401k (TSP account) while in basic training. I had no idea what it was, but our Recruit Division Commander told us in his “polite” yelling voice that there’s no getting into it later if you were to opt-out now. I was enlisting under a 5-year contract, and this made me a little frightened that I would miss out on something, so I opted in! The TSP didn’t match any contributions, but it was bi-monthly contributions nonetheless. I’m definitely thankful for it now.

    • Great choice on your part to invest in retirement early. Thank you for your service to our country. Not investing early enough really has been our number one mistake. However, raising four boys debt-free on a low income, we did hit the mark in some other areas. We do a zero-based budget every month, too. It really gives peace of mind, knowing that every dollar has a job to do. Like you, we were a single-income, large family. So, I got really good at squeezing nickels and dimes out of our budget. Hey, thanks for stopping by the website. I hope you’ll come back again soon!

  2. Hi Hope, thank you for this article. I always appreciate your practical advice! I do write down my financial goals but still have trouble meeting them. That’s where I have difficulty. I am still a work in progress, but I’m not giving up!

    • The road to financial freedom is never a straight line. Keep plugging away and keep doing what you know to do. It will get easier and you will begin to see that you are making progress toward your goals.


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