Everyone makes financial mistakes. I’ve had my fair share of boo-boos over the years. No, I don’t spend more than I earn. I pay off my credit cards in full. I don’t splurge on expensive things. I haven’t gotten myself fooled into a scam. I’ve never lost a lot of money in the stock market. I work diligently towards financial goals. I do most things money-related right.
But most the financial mistakes I made aren’t found in personal finance books and magazines. And they were made when I was younger, particularly in my 20s. With lots more grey hair, I’ve charged all these to experience. Here are my money mistakes and what you can learn from them:
Mistake #1: Taking up the wrong course
Many college freshmen take up a degree that they don’t really want or end up not using later in their career. In my case, I thought I was good with numbers and all companies need accountants, so I took up an accounting degree. It was only when I started working when I realized I like marketing and communications better. My advice: know what your interests and abilities are early on.
Mistake #2: Job hopping
Typical of Gen Xers, I also underwent my own quarter-life crisis, hopping from one company to another in my 20s, missing out on career momentum and the promotions and fatter paychecks associated with it. My advice: know what your true strengths are and stick to one career path.
Mistake #3: Making hasty decisions
I made two costly mistakes where I lost a lot of money – immediately quitting a job which left me with a big company loan that became suddenly due and putting up a franchise business without doing a more thorough feasibility study. My advice: when a decision involves a potential costly consequence, don’t rush.
Mistake #4: Paying unnecessary fees
If there’s one outright financially irresponsible thing I’ve done is not monitoring my checking account, issuing checks with insufficient funds and getting slapped with hefty bank fees, and occasionally being late with paying my credit card bill. These are expenses that could have been used for my own benefit. My advice: if you’re a little forgetful, set up multiple alerts (on your calendar, mobile phone, your spouse, etc.).
Mistake #5: Investing instead of saving
What’s wrong with investing, you ask? When you should be saving instead, I say. I invested money into stocks and mutual funds (long-term investments) when my short-term goals then (wedding expenses, down payment for a property) required short-term savings, forcing me to liquidate some funds and asking money from my parents (God bless them!). My advice: ask money from your parents. Seriously, match your goals with where you save and invest.
Mistake #6: Not investing regularly
The earlier you start investing, the better. But what I have not done better is investing regularly. Instead of letting my savings sit on bank deposits for long periods of time, I’ve missed out on better returns. My advice: make an investment plan that’s motivating enough to drive you into action.
Mistake #7: Being a nice guy
Nice guys forgive debts. Nice guys let their employer delay their salary. Nice guys are too patient. Mafia gangsters aren’t nice guys and that’s why they make a lot of money. My advice: Call the Sopranos. Kidding aside, it’s okay to give a little leeway at the start but put your foot down when it’s getting out of hand.
Photo by chuttersnap on Unsplash
