Distressed People Confess Their Biggest Financial Mistakes
What would you do if you lost your next pay-check, or a full year’s salary, or even your savings or 401k? Believe it or not, thousands of dollars are lost every day by people making simple, financial mistakes. And it’s not just about losing what you have, it’s about missing the opportunities to make more.
From bad bets on the stock market and jumping into a declining industry, to needless spending and simply not planning for the future, these people made common financial mistakes that cost them thousands in earned income and years of savings potential. What did they do and how much did they lose? More importantly, how much could you be losing by making these same mistakes?
The people of Reddit came together to talk about their worst financial decisions so that we could hopefully learn from them. It’s never too late to learn about financial security and every little bit helps. Just remember what they say, “if you mind the pennies, the dollars will follow.”
Don’t forget to check the comment section below the article for more interesting stories!
#25 They Trusted A Professional And Ended Up Paying For It
Buying into the urging of my friends, peers, and realtor to “get into the market before you get priced out,” that “it doesn’t matter if you take out two mortgages, you’ll just refinance in a few years,” and “you can put zero down, the market is just going to go up.”
It was 2008. I spent the next seven years underwater, paying two mortgages, one of them at 11.125% interest. If I had rented throughout that time I would probably own a house outright, or at least be hundreds of thousands of dollars closer to financial independence and early retirement.
#24 They Saved So Much That It Hurt
I didn’t take on enough student debt.
I spent an extra two years getting my degree because I was working for 12 bucks an hour trying to be financially responsible. It lowered my grades, prevented me from getting scholarships, prevented me from taking full advantage of learning opportunities, and exhausted me while limiting my social experiences.
I made $60,000 right out of school and paid off my student loans within two years. It just wasn’t worth it. I should have powered through and paid it off when I made real money instead of working for spare change.
#23 Living Debt-Free Did Not Mean Financial Success For This Person
Wasting my 20s. I took a slow path through college and didn’t graduate until I was 24, then worked jobs that I enjoyed but paid poorly until I was 29. Finally got my stuff together and started taking my career seriously at that point, but for that 5-6 year period, I basically made zero financial progress. I was fortunate to not take on debt, but from 24 to 29 I saved nothing.
I wasn’t into the idea of financial independence then, just kind of figuring out what I wanted to do and having fun. I don’t really regret it on a personal level because I really enjoyed those years, but from a financial perspective, it was definitely a mistake.
#22 His Sister Left Him With The House
Buying such a big first house. At the time it made perfect sense. It was a 4 bedroom split level, my sister would live in the downstairs portion and my dad would pay a small amount of rent for her. Well, my sister moved in with her boyfriend and the rent from dad stopped. So now I’m here by myself in a 4 bedroom house on a 115-year mortgage. I’ve since found a girl and I’m going to marry her. So the house will come in handy when kids come around, but the timing of it is all messed up and I could have been investing the mortgage money elsewhere. I do love being a homeowner though, and in general very much like my home. So I have positive feelings about my situation even if it’s not optimal.
#21 Salesman Of The Year Smells A Sweet Deal
Buying a new Corvette Z06, TWICE. The first one was yellow. Loved it. The tires were bald after the 1st year. Luckily GM was offering 0% on ALL cars, even Corvettes that year. So I went into the dealer and he said, “for the same monthly payment as you have, I can take the old one off your hands and put you in this one with new tires!”.
What a deal…
#20 All These Small Purchases Added Up To A Lot Of Money
During my 3 internships in college, I bought lunch every day. It ranged from $8-15. Some days I bought breakfast too, which added another $5. Every. Day. I’m graduated and working full time now and I meal prep which saves tons of money on food expenses. I’ll occasionally buy lunch on Fridays, but I try to limit it to twice a month.
If I meal prepped earlier, I could have used the savings to pay down credit card debt during college or used it to open a Roth IRA. My other regret is not learning car maintenance/repair sooner. My first car was a beater and I would have saved tons on repair costs.
It’s usually the small things that can eat your money alive.
#19 They Could Have Made Thousands With Just Their Computer
My hacker friend said “Hey, check out Bitcoin, crypto will be a thing” and I nodded and went back to watching Buffy reruns. Later that evening I read about blockchain technology and how to set up a wallet. Never pulled the trigger while it was at $2.50 or so. Now Coinbase is showing $654.
#18 Just When They Thought The Stock Had Hit Rock Bottom
Probably when, in 2008, the stock of the bank I worked for decreased from $42 to $28, so I took advantage of that amazing deal and moved 100% of my 401k into company stock. So when the bank went under I lost both my employment and my 401k. Final share price was $0.001 (that is not a typo).
#17 One Simple Move Changed This Person’s Life
Living in Vancouver for 4 years. Moved there for a $15k salary increase, but with the cost of living, I barely saved a dime. Plus I hated the city anyway. It just never occurred to me that it would be feasible try a different province. Moving to Alberta has been the best thing I ever did.
#16 Your Degree Could Have Cost How Much?
I did so poorly during a few of my semesters at a university that I lost my financial aid which included a full-ride scholarship. Once I became eligible for financial aid again, I was no longer eligible for the scholarship. So my degree ended up costing me $40k instead of $0. Dumb, dumb, dumb.
#15 What Did This Kid Do With Their Inheritance?
When I was 12 years old I received a $10k inheritance from some great-great aunt or somebody who I had never met. My mom decided it was a great idea to just open a checking account under my name and hand it over.
I spent it all on who-knows-what by the end of high school. I keep thinking if I had the sense to save it (or if I was, you know, parented and taught a thing or two about money) I could have actually gone to University.
There are few things in my childhood that I’m more angry about than that.
I’m 25 now, and it wasn’t until this time last year when I stopped living paycheck to paycheck. Now I’m saving 50% of my income and still trying to get over what could have been a great start in life.
#14 Starting This Sooner Could Have Saved Him Thousands
Not getting into this financial independence game earlier in life. I only just started to care more and that stemmed from having one of my businesses become gainful income. Up until then, it was all about the following:
- Get good at skills, regardless of college costs.
- Get clients, regardless of how much equipment cost.
- Get busy, even if it means taking a hit financially to keep clients happy.
Now I say “forget you, pay me,” and life is better balanced. I needed to get good at accounting and one thing led to another and I learned about financial independence.
In hindsight, I could have probably done everything again smarter. I was out to succeed and believed I’d win in the end, even if it meant taking unnecessary risks. Now, I know its better to take calculated risks and that success isn’t guaranteed. Living with financial independence in mind means it’s an attainable goal and it’s okay if that’s the only success I get in the end.
#13 They Followed Their Dream And Now They Regret It
Buying dream cars. Never again…
Anyone want to buy a Tesla?
#12 This Person Missed A Great Stock Market Opportunity
Several years ago around 2000, I was buying stocks and wanted to buy an internet stock. My family talked me out of buying GOOGLE stock. Reason: waste of money and it will tank once the fad ends.
What did I end up buying? $5,000 Corning stock. Lost every bit of my money.
#11 This Person Might Have Waited Too Long
Waiting until 30 to decide I needed to learn about finances. I have about 10k in credit card debt, 5k left on a car and 24k in student loans. I’m kicking myself hard, but encouraged by the success stories found.
#10 An Attempt To Time The Market Backfires Dramatically
Back in December of 2007, I turned almost my whole portfolio into cash. This was back when I thought I was pretty smart and could time the market. I sat on the cash for a few months and the market mostly went sideways. I was sure the market was going to tank, but it really didn’t. So, in May I bought back in. Well, I was still in when September hit.
I was really close to being a genius, but not quite. Don’t try to time the market.
#9 It Was Too Late To Fix This One, Huge Mistake
Biggest financial mistake was going to graduate school without having worked in the field.
The field isn’t right for me.
#8 Being A Bad Student Cost This Person Thousands
Being a bad student as an undergrad. I simply couldn’t figure out how to be successful and my 4.5 year degree took me 7, so I came out of school with extra debt and a few years of missing wages. And it was an engineering degree, so that was like 150-200k in lifetime wages that I’ll never see.
On the plus side, I stayed in school through the recession since I should have graduated in 2010/11, and I’m starting grad school in the Fall that my employer is paying for.
I also met my wife in those surplus years, and my life would honestly suck without her. So there’s an upside to everything.
#7 They Thought Moving Closer To Work Would Help Save Money
First job right out of school making 60k, and I decide to rent a place right across the street from my office. Rent/utilities/etc ended up being nearly one whole paycheck each month so I was pretty much living paycheck to paycheck for a whole year. I moved out of there and in with my girlfriend (still near the office) and now my savings rate is about 45% but I can’t help thinking about that year that I effectively lost.
#6 This Impulsive Boyfriend Cost More Than Money
I actually did a video on this, but my biggest financial mistake was living with a boyfriend who did not care where his (or my money) went, didn’t care for a budget, and was an extremely impulsive buyer. I didn’t end up in that much debt thankfully but for mental health, it’s the worst thing I’ve done.
#5 Not Watching Expenses Cost This Person Thousands
Not caring in college. School always came easy to me so I did what I needed to get decent grades, didnt care much else beyond that. Wish I picked a major that I liked vs just Business.
Buying a $22,000 used Audi S4 right out of college making $30k, with no savings.
Wasting my 20’s not saving, going out for drinks and meals every weekend, living paycheck to paycheck.
A few random purchases of individual stock for no reason at all.
#4 This Is One Of The Largest Expenses A Family Can Have
Luckily they are totally worth it to me. I just won’t be retiring early.
#3 They Bought A New Car, But Didn’t Look At Their Other Options
#2 She Took On The Wall Street Pros
Actively trading stocks in my early-mid 20’s. What on earth made me think I was smarter than Wall Street people who do this for a living? What on earth made me think I could make better decisions and find value in my spare time better than they could? Total idiocy. I ended up being way more conservative than I should have been during the most consistent bull market in memory (2003-2006) and doing far more selling winners and letting losers “come back to where I bought it.”
#1 This Person Undersold Themselves For Years
Not realizing my own self worth and charging my employer accordingly. I’m 38 and flushed away half my life already with no savings. Trying to change that though. Already at 10k positive net worth and climbing.