Guest Post Note
Normally I am very leary of guest posts (especially unsolicited ones), but Roger sent me a note asking if he could make my life simpler by writing a post for me, I gave him a topic, and he has done a good honest job of dealing with a very touchy subject for many of us. Roger’s vital info is at the end of the post. Some interesting points made in this post, but the content is solely Roger’s (and may not reflect my point of view), I have not altered it (except for this annoying header).
10 Personal Mistakes as Confessed by a Financially Inept Person
The following list gathers ten of my favorite personal finance mistakes. I look back on these mistakes with a mixture of horror, shame, and humor. I like to think I’ve improved since committing these mistakes. I hope these are both funny and helpful to you. Whatever you do, don’t be like me!
1. The $38 Mocha Latte
I remember this morning well. I was on my way to teach my classes and decided to treat myself to a coffee. I had stayed up quite late the night before grading papers, so I wanted a better-than-average pick me up, something delicious and full of caffeine. I paid the $3 with my debit card because I had no cash, enjoyed my coffee, taught my classes, and then later discovered an overdraft fee on my statement. I now make sure to balance my register every week and leave a cushion in my account. I haven’t over-drafted since.
2. Drunk eBay!
In college, I had a few too many drinks one night and decided that I wanted a motorcycle. I bid on six different auctions, passed out, and awoke to six emails from the sellers congratulating me. They gave me a list of ways they would gladly accept payment. Of course I couldn’t pay the money, so I ignored their emails and eBay shutdown my user account. I no longer shop online after a few drinks, nor do I impulse-buy.
3. No Research, No Title
When I was seventeen, I purchased my first vehicle, a ’92 Ford Explorer, from a man out in the country. He had placed an ad in the paper and was selling cheap. I was so excited by the prospect of owning my own vehicle that I bought it immediately. I paid cash and didn’t get any paper work. I had done no research at all as to what was required in order to buy and license a vehicle, so when it came time to make it legally mine, I was stuck. The truck sat in my parents’ garage for a few years until my father sold it off as a farm truck.
4. No Emergency Budget
I have finally started an emergency budget, a separate savings account that I deposit a certain percentage of my income into each month. I started this because I recently spilled water on my laptop. Of course, I’ll have to replace it now, so the emergency budget won’t help me in that regard. But I figured that had I set aside some money beforehand, I wouldn’t be scrambling to find the money. My error, then, was not being financially ready to deal with emergencies.
5. No Insurance / Protection Plans
I used to turn down options to buy insurance or protection plans. When buying a computer or a phone, I turned down coverage. For my vehicle, I have basic legal coverage. My reasoning was to minimize my expenses upfront. All of that changed when I had to ship a rental violin back to a music store; I had forgotten to return it before I moved. A few days later, the store called to say that the violin was broken and that I would have to pay for a new one. Had I bought a protection plan, I could have avoided this expense.
6. No Haggling
Remember that ’92 Explorer? Well, when I went to pay for it, I handed the guy all my cash at once for the price he had listed it in the paper. He looked down at the cash and said, “Well, okay, but in the future, you should at least make an offer below the price.” This was a revolutionary idea to me, so I said, “Okay, well how about this much?” and he said, “No.” I paid full price on that one. Now I make sure to offer an amount I’m willing to pay, instead of buying a big purchase at advertised value.
7. Poor Record-keeping
When I first began working as a freelance writer, I used to save all of my business correspondence in my email account. This worked for a few jobs, but as I became busier, I began to lose clients because I failed to respond to them in a timely manner. Now I use an invoicing system that reminds me when things are due and what I quoted for the job. In short, my mistake was to not keep my finances, especially my sources of income, organized.
8. Too Many Credit Cards
I went through a stage when I had far too many credit cards. I had five at once, and in my mind I was organized in how I would use them. I thought that by separating my purchases into categories, I could better manage my finances. In fact, this just made everything all the more confusing, which caused me to miss a few payments. Now I only have a debit card and one credit card.
9. I Spent Against Money I Didn’t Have
I have too often succumbed to the temptation to spend against money I don’t have. When finishing a particularly big writing project, I would sometimes treat myself and spend money despite not having received payment yet. Once a client suddenly collapsed financially, couldn’t pay me as much, and because I had already spent against some of that income, I had to take out a loan from my parents in order to get through the month.
10. Delayed Investment
I regret, perhaps most of all, my having not invested any money when I was younger. I was hesitant to do so because I was unsure of how to invest correctly, and I was also more interested in spending my income than putting it away. I always thought that I could start later. Now that I’ve moved back in with my parents, I have a chance to start investing properly. Of course, I’m still relatively young, but I recognize already how much financial damage this delay has caused me.
This guest post is contributed by Roger Elmore, who writes on the topics of hospitality management degree. He welcomes your comments at his email Id: rogerelmore24 @gmail.com.