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. Like, some real doosies. Now is the time to divulge. 🙂
And by the way, happy Thanksgiving week! I hope that you’re spending some time with family this week and away from the office. I can still remember the last Thanksgiving I spent at my in-law’s house before calling it quits from full-time work just about a month later.
It was an amazing feeling. But yet, I just couldn’t wait to get to that point of my life where I didn’t work a full-time job. It couldn’t happen soon enough.
I had the opposite problem of Just One More Year syndrome. Instead, I suffered from a sickness called “Why can’t I just quit now?”
In any event, this just feels like a week for more light-hearted material. No discussion of investments or 401ks today.
Behold, below I reveal the 7 dumbest things I’ve said about personal finance. Can anyone out there top this dumb stuff?
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 – or, frankly, the risks involved in homeownership.
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 dough 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.
The problem was I didn’t pay myself first. I was a slave to that stupid budget and found ways to cheat that sucker every step of the way.
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.
I said, “A zero-percent interest loan? I can’t afford NOT to buy this thing.”
I’ve long since sold that car. Now, we only have a single vehicle – a 2012 GMC Sierra 2500HD, to pull our 10,000 Airstream travel trailer.
4. There will always be time to save later
Man, I hate myself for ever uttering such nonsense. It was that kind of stuff that had kept me working as long as I had, always deferring my better judgment for some point in the future. Dumb, Steve…dumb.
This same theory goes for the things that we think that we’ll do after we quit our jobs. Instead of waiting or assuming they will happen “later”, start doing those things now.
Because…if you aren’t doing them now, chances are you won’t do them later, either. Don’t feel bad about that. It’s just human nature.
5. If smart people still go bankrupt, what chance do I have?
Back during the mortgage crisis (which, coincidently, was around the time that I bought that 1,600 square foot depreciating asset called my “house”), 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.
To this day, I still remember plopping down about $230 for a pair of Oakley sunglasses (that I involuntarily donated to the Puerto Vallarta, MX ocean a couple years later). Over $200 bucks for a pair of glasses? Wow…
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?
Steve is a 38-year-old early retiree who writes about the intersection of happiness and financial independence. Steve is a regular contributor to MarketWatch, CNBC, and The Ladders. He lives full-time in his 30′ Airstream Classic and travels the country with his wife Courtney and two rescued dogs.