My 5 Biggest Money Mistakes
I made plenty of idiotic decisions in my youth, and I also made some bad calls with money.
At one point, my life was a financial mess.
I lived in my overdraft, carried credit card debt, had two car loans, and I was quickly racking up student loans.
I was 20. In two years of officially being an adult, I had got myself into the red – majorly!
I remember feeling incredibly stressed and anxious about money.
I wanted to pay back what I owed, but at stupid as it sounds, I didn’t know how.
I had ZERO financial education.
Proving my point; when I got paid, I’d blow the lot on designer clothes and boozy nights out instead of paying back debt.
My hangovers were made worse as they were accompanied by a crippling fear of checking my (already negative) bank balance.
My older, wiser self regrets the money I wasted in my youth. But at the same time, I’m grateful for the learning experience. And let’s not be kidded, I also had a blast.
But if I were to do it all again, here are the money mistakes I wish I avoided.
1. Buying Cars On Finance
Saving to buy a decent car can take months or even years. Most people don’t have the readies for such a large outlay and purchasing a vehicle on finance is common.
But, there’s a smart and dumb way of doing it.
I went for the latter option.
Instead of arranging a low 3% APR personal loan to buy a car, I opted for the dealership finance at 9%.
And then I chose a sleek, gunmetal hatchback complete with big rims, a spoiler and an earth-shattering subwoofer. The salesman enthusiastically agreed that this car was cool-as-fuck, and we should sign the loan agreement quickly before someone else snaps it up.
Less than a year later, I ended up writing that car off.
Instead of using the little savings I had to buy cheap, replacement wheels, I headed straight back to the dealership and got another loan on a sporty little number.
It took me years to pay off both car loans.
In hindsight, I wish I scoured Gumtree or the local Buy and Sell for a beat-up, old banger. It would have saved me thousands and achieved the same purpose – getting me to and from my work.
2. Carrying A Credit Card Balance
To get my first credit card, I had to meet with an advisor at my local bank. I dressed smartly, spoke with the Queen’s English, and sensibly explained how I would use the credit.
The maturity I displayed ended as soon as the card dropped through my letterbox.
I had it maxed out within days. I can’t remember what I went into debt for, but I’m sure it was worthless tat.
I carried a balance for years, and I only ever made the minimum payment.
I would probably cry if I tallied up the amount I’ve paid in interest over the years.
3. Keeping Up With The Joneses
Keeping up with the Joneses is not only for the well-established middle class. In my experience, teenagers and young adults are much more likely to display this jealous, copycat behaviour.
Case in point; when I was younger, I would talk, act, and dress like my mates. We were carbon copies of each other, sporting the same naff hairdos.
Everyone behaves like this in some way or another to fit in with a group. Humans need to feel a sense of belonging.
But being a sheep and following the herd really hurt my bank balance.
I would drop £100 on a Lacoste polo shirt just to look the dogs bollocks. I would go on nights out that I couldn’t afford because of FOMO.
If one of us got a 32″ LCD TV, then it wouldn’t be long until we all had one hanging from our walls.
I was living a life I couldn’t afford – none of us could – to impress my peer group.
Now, I couldn’t care less about what my mates think of me. True friends stick with you no matter what you do for a living, where you live, or what car you drive. I just wish I learned this lesson sooner.
4. Not Budgeting
“Budgeting apps didn’t exist back in my day.” – he says as he rocks back and forth on his rocking chair sucking on a Werther’s Original.
And back then, I wasn’t the financial nerd that I am now, and would never have tracked my finances on a spreadsheet.
BUT, that’s still not an excuse for burying my head in the sand.
A lot of the financial shit I got myself into in my younger days could have been avoided if I took five minutes to write down my income and outgoings for that month, and planned how I was going to spend my money.
It doesn’t take a math genius to work out that my part-time café worker salary wasn’t going to afford rent, food, bills, and tequila shots for everyone at the bar.
5. Not Learning About Personal Finance Sooner
We all have something we wished we learned or started sooner: Saving? Investing? Golf?
Mine is money management. I was 22 before I finally wised up to personal finance.
I know that’s still young, but if someone handed me Rich Dad Poor Dad when I was 16, I swear I’d be a millionaire by now.
But, then again, I may have been too young to appreciate it.
It was a self-help book that eventually changed my outlook. It came into my life at precisely the right time – I was tired of being skint, over the hangovers, and it felt about time that I got a “real job”.
One book lead to another, and before long, I was deep down the self-development rabbit hole. Somewhere along that journey, I started reading personal finance and wealth creation books.
As cheesy as it sounds, those books changed my life.
It took several years to get my financial house in order, but I’m thankful that I did.
If I continued on the path I was on, I would be buried deep under a mountain of debt today.
Care To Share?
I hope you’ve had a laugh at the money mistakes I’ve made – which are ironic, considering I’m a personal finance blogger that writes about how to be good with money.
But, nobody’s perfect; we all have regrets.
And if you learn from your mistakes, and they lead you to develop into a better version of yourself, then sometimes, they’re worth making.
Now it’s your turn. Are you bold enough to share some of the money mistakes you’ve made (and what you learned) in the comments?
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Hi! I'm Jamie
I’m a 30-something money blogger that writes about saving, frugal living, investing and entrepreneurship.
I achieved financial independence at 30 through hard work, saving and learning to invest.
On this blog, I share everything I've learned about money to help you build a life you love, free from money worries.
If you'd like to achieve financial freedom, escape the 9 til 5 and spend your days however you want, then I know you'd love our weekly newsletter.
When I first got interested in personal finance, I stumbled across a blog called Early Retirement Extreme (ERE). The blogger behind the site, Jacob Lund
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