Dumb things. We all say them from time to time, but I was especially prone to some real stupid stuff before I finally got serious about personal finance. Now is the time to divulge. 🙂
And by the way, my wife and I will be taking a vacation (yes, PTO!) to the upper altitudes of Colorado this week and spilling into next. I have articles lined up, so fear not! Your semi-daily dose of weird stuff from TSR will continue to flow.
And now, behold, below I reveal the 7 dumbest things I’ve said about personal finance.
1. I need to buy a house to build equity
This was entirely stupid because I had no idea what “building equity” actually meant. I just knew that equity was good, and homes seem to be associated with that “good”. I put two and two together and, over the next eight or so years, lost about $100,000 owning my own place.
How’s THAT for some equity?
2. I have extra in my budget, so let’s buy something
In a previous life, I completely sucked at budgeting. I had a budget, but it wasn’t doing me much good because it didn’t constrain my spending. In fact, it enabled it. Whenever I began accumulating more money in certain budget categories than I was spending, my solution wasn’t to save it. Instead, I spent it, knowing it wouldn’t collapse my budget for the following month.
I cheated my budget. I also cheated my future self.
3. New car with a zero interest loan? Sign me up!
In 2010, I did the dumbest thing ever (short of buying a house): I bought a brand new Cadillac CTS. A zero interest loan baited me into it, and let’s be honest, I liked the idea of struttin’ around in a Cadillac.
4. There will always be time to save later
Man, I hate myself for ever uttering such nonsense. It’s THIS kind of crap that has kept me working as long as I have, always deferring my better judgment for some point in the future. Dumb, Steve…dumb.
5. If smart people still go bankrupt, what chance do I have?
Back during the mortgage crisis, I recognized how many people – truly smart people – were still struggling to make ends meet and get ahead. And there I was, barely 30 years old, wondering what chance I had. If smart people can fail, where does that leave me? Why even bother? Ugh.
6. If my neighbor can afford that car, so can I
This keeping up with the Jonses crap hit me hard. I knew that I had a good job, relatively high paying and fairly stable. I assumed I earned at least as much money as my neighbors. If they can afford that new car, or pool, or renovation, or whatever…then so can I, damn it.
Cocky, Steve. Way too cocky.
7. I need these things to build my career
I was a kick-ass rationalizer. I convinced myself that a lot of what I was buying I “needed” to benefit my career. I had to “look the part”, so the Cadillac fit there. And I can’t come into work wearing the same worn out clothes every week, so I needed wardrobe refreshes. Expensive glasses (before my Lasik surgery) were a natural finishing touch.
And weekly happy hours with my co-workers to, you know…”network”.
Be honest, what are some of the dumbest things you’ve said about personal finance in your past? Do any of those things make you cringe today?