1 What Was Your Big Mistake? | The Billfold

What Was Your Big Mistake?

Two-thirds of middle class Americans (67%) said that, in the past, they had made at least one “really bad financial decision,” and nearly half of those questioned (47%) acknowledged that they had made more than one bad decision. The typical (median) cost of these bad decisions was $5,000, but the average cost was $23,000.

According to this survey by the Consumer Federation of America, a majority of people who admit to making “a really bad financial decision” also believe their ability to make sound financial decisions is “good,” or “excellent.” Fair enough. I can’t argue with that, because I also believe that I’m capable of making sound financial decisions, and I’ve also made financial mistakes.

Here’s my big mistake: In college, I decided to take out a $3,000 student loan so I could travel and do an unpaid internship with a major news organization (course credit!). I convinced myself the experience would be worth more than that, but I should have probably done an internship that wouldn’t have required me to borrow money. I know better now, and will advise against doing this.

Got any mistakes to share?


48 Comments / Post A Comment

Weasley (#1,419)

Would it be a financial mistake to buy a car without having a drivers license? I haven’t done this but I might.

LizF (#1,399)

@Weasley I bought a car in high school with my learner’s permit but without my driver’s license.

It was an inexpensive car and I did get some use out of it but I don’t really advocate doing it if you aren’t 16.

Weasley (#1,419)


Oh, I’m 22 and I have my permit but not a drivers license. The car in question is $1000 and I’m tempted. So tempted.

stinapag (#2,144)

@Weasley I bought a car with a standard transmission without knowing how to drive stick. It was $6000 less than the same model with automatic transmission, and I figured it was worth $6000 to learn to drive stick. Had the car from May 1999 to April 2011, when it saved my life in a rollover accident.

Jellybish (#560)

Spending too much to improve my house. The house now looks great, but we definitely will not recover those costs when we sell this year or next year.

sockhopbop (#764)

I bet the $23K mistakes are grad school!

WaityKatie (#1,696)

@sockhopbop I read this and was amazed at how low the amounts of people’s biggest financial mistakes were. I guess nobody went to law school!

r&rkd (#1,657)

Didn’t at least apply to the University of Iowa? That’s my biggest mistake re: law school.

MargaretMead (#2,229)

I cosigned on my exes student loans for grad school! And then I got dumped a year later, and then he defaulted. Honestly what was I thinking.

honey cowl (#1,510)

@MargaretMead Oh my god. That is a serious mistake.

Weasley (#1,419)


Oooooh noooooo

MuffyStJohn (#280)

@MargaretMead I think you win/lose. And also someone get this girl a drink and/or an ice cream sundae.

MargaretMead (#2,229)

He was in a situation where it was private loan, or not have enough money to finish the final year. His parents were not creditworthy, and he could not have been able to get the loan on his own. We were planning our lives together, and I wanted to help him get ahead.He is making regular payments now, and it’s the only blemish on my credit report.I did consult a lawyer at the time, there is no way to get my name off the loan, it just has to be paid off. I could sue him for breach of verbal contract, but it’s not really worth it.

I definitely don’t recommend doing this. That’s for sure.

I’ll take a Whiskey now thanks.

r&rkd (#1,657)

Oooh, I wonder if I know you? But there are probably too many people who have made this particular mistake, enough for me to know one and still meet more.

CubeRootOfPi (#1,098)

Being cheap and not spending on quality.

honey cowl (#1,510)

I feel like I am too broke to make any serious financial mistakes. They have all been to the tune of $250 or less!

charmcity (#1,091)

Is “law school” too broad, or…?

MuffyStJohn (#280)

@charmcity I think if you look up Big Financial Mistake in a dictionary, there is a picture of a JD sitting next to it.

jfruh (#161)

Here’s my big mistake: in late 2008, as the stock market cratered, the money in my SEP-IRA, which was invested in a date-targeted mutual fund, went down with it. And even though I knew that as a 34-year-old that fund was invested in riskier assets and I needed to think about the long term, etc., I couldn’t handle seeing the total go down every day in Quicken, and come December I pulled it out of that fund and parked it in a money market fund instead, taking a $6,000 loss (about a quarter of what I had put into retirement so far at that point). Of course, that was when the stock market bottomed out. I didn’t move the money back into the date-targeted fund until way after I should have. It’s not like a lost a lot more than I would have otherwise, but I’d have been better off if I just left well enough alone and kept putting more money into the fund as it neared bottom, which is why you shouldn’t obsessively track the value of investments for which you have long-range plans rather than short-range plans.

Lily Rowan (#70)

@jfruh That actually kind of made me gasp. But also, I am assiduous about not looking at my retirement fund statements.

I would say my mistake was grad school, but I effing loved going to grad school full-time AND I got a job that paid $20K more afterward. So I’m still paying it off, but wouldn’t really call it a mistake.

sony_b (#225)

@Lily Rowan The best advice I ever got was to not look at the 401k more than a couple times a year. I have a vague idea of what is in mine, and I do check just to make sure that the money is going in at the rate I expect and everything looks kosher once or twice a year, but that’s it.

Grad school still really depends. I went back in my 30s for a masters in computer science and I owe about 43k (down from 47k), but like you it increased my asking salary by 20k per year (and also gave me a lot more flexibility career-wise) and I had hit the glass ceiling in my career before I went back to school. I don’t think it has quite balanced out (with the lost income while I was in school), but definitely a good choice for me. People paying for law school, MBAs, and liberal arts graduate degrees are hurting so badly that I’d advise them not to do it now though.

Lily Rowan (#70)

@sony_b Yeah, I went to grad school at 30, which was the earliest I’d suggest going back really — I knew what I was doing, career-wise. I also ended up at $45K in debt, but am proud of myself for sticking to the 10-year repayment plan, unlike when I got out of undergrad (but then I really had no money and now I do, so).

wearitcounts (#772)

using my credit card, ever.

@wearitcounts Yes, this.

alex_geedee (#2,230)

There was this one time when I had just finished university and was kind of “lost” (like, in an existential sense, not like, physically) and I was unemployed and depressed about being unemployed. I started shopping a lot with my more financially stable friend who could afford to buy all the clothes, and even though I COULD NOT afford all the clothes, I was jealous of her wardrobe, so I bought way too many dresses I didn’t actually need, and then all of a sudden I was $3,000 in credit card debt and it took a reeeeaaaally long time to pay it off because even when I did get a job, I was a lowly intern. WOMP.

MuffyStJohn (#280)

@ardnaxela But do you at least have an awesome wardrobe to show for it? Never underestimate the value of a great closet.

alex_geedee (#2,230)

@MuffyStJohn I did get a lot of good pieces out of it, and it was nice to actually have semi-professional clothes when I finally did get a job. I’ve since put myself in shopping rehab and now only allow myself to shop when I really need something or there is a for serious sale.

DON (#706)


WaityKatie (#1,696)

@DON That’s a mistake, but also kind of a solution?

sony_b (#225)

In retrospect I made two huge ones, but I researched the hell out of them, and the information to deter me was just not available at the time I made these decisions. I cannot think of a piece of information I had access to at the time that I ignored or failed to turn up.

1. Purchased a condo for $215k in the bay area in 2003. I knew there was a bubble. I seriously thought I was buying close to the top, but I had the income, could use the tax break, and I was buying the smallest place (studio) in the best neighborhood (at the beach, adjacent to a huge park, walk to a zillion good restaurants and bus service to SF or BART within two blocks). I could well afford it at the time.

In 2009 I met my boyfriend and we decided to move in together. But we both work at home and we each have a cat. That wasn’t going to happen in 510 square feet. The value had dropped to about $180k and I called BofA to talk about short sales. They told me a made too much money and hung up on me after I spent about six hours on hold over several days trying to talk to a human being. I rented it out at a loss of about $150 per month.

It is now worth $89k. My tenant is moving out. Rents have dropped in the neighborhood, and the HOA isn’t taking care of the property (graffiti in the elevators, bad gates, trash, it’s really sad). I stopped paying the mortgage last month.

We timed it well and bought a new place we’ll be happy with in a few years, but my credit has just gone from 750ish to 300ish and will be there for a few years.

With all the interest I paid on that loan over the years, if they would have approved that short sale they would have still *made money* on that loan. Not as much as they thought they would originally, but there was profit there. Now, fuck’em.

2. Paid out of pocket for a Lap-Band bariatric surgery in 2002. Insurance wouldn’t cover it, it seemed like a good idea at the time. The thing broke once, thanks to f’ed up medical billing the hospital charged me for the repair surgery as if I had done the same original surgery, and then Allergan refused to pick up the bill for the replacement. A year later the thing nearly killed me. I had it removed last year as an emergency (puking blood) for a $100 copay, the first my insurance would cover. Out of pocket – $70k give or take, including surgeries, lawyers to straight it out, and almost declared bankruptcy.

So many mistakes. So, so many.

1. Taking out about 3 low-balance credit cards (around $600 each) when I was 20 or so. They became $6000 of credit card debt that I am still paying off.

2. Grad School #1: Social work. I was already in about 40k of debt from undergrad, why not just add 20k on, and then drop out?

3. Grad School #2: Master’s in teaching. I already had half of one finished, paid for by a fellowship (and then I moved). Unfortunately, credits don’t transfer for grad school, so I added another 20k on before I had an intense anxiety attack about all my debt and quit before I could finish the rest. BECAUSE A TEACHER CAN’T PAY THAT SHIT BACK!!

I am probably sitting in a big financial mistake currently, and just not knowing it.

MuffyStJohn (#280)

4 years of alcohol and drug addiction. Over the course of a few years I spent roughly $17,000 on drugs and another $20,000 on alcohol (and these are conservative estimates). If we add smoking into that (an additional $24k), I have paid over $60k for the privilege of being obliterated and/or killed.

megsy@twitter (#2,192)

My foray into public accounting and my joining the military are the two biggest financial mistakes I have ever made. I’m 4 years post-Big4 and on my way out of the military with a medical release and now I’m sitting in a random classroom doing a random college program that I have to pay for up front (but will be reimbursed)… while desperately trying to keep my head above water and not tell anyone my secret financial shame.

Megoon (#328)

I could have gone part time my last semester of college and didn’t… because I was too lazy to figure out an off-campus housing situation. WOW was that dumb.

margaretcatwood (#2,236)

law school. private law school that didn’t offer me any scholarships. $200k in the hole. i wanted to be a lawyer, yes, but i also think i’d be a lot happier with a non-law career and no debt.

blueblazes (#1,798)

1. “Emergency” credit cards.
2. Dinner and booze every night for uh, 6 years? (Purchased on “Emergency” CC.)
3. Paying for my own unnecessarily fancy wedding. (With–you guessed it–the emergency CC.)

That’s about $20K in revolving CC debt right there. We’re down to $9700 now, but it never had to be this way. AAAARGH!

I wish I could punch my 22-year-old self in the face right now.

stealthkit (#2,237)

Buying a cute, cheap, sorta fixer-upper Victorian in a high crime city. Please someone buy my house before I get shot. Oh, and spending 25k on a BA in Religious studies.

elizabeast (#629)


So basically, when I was 17, I picked one school and decided it was the only school for me. I applied. I got in. But, the thing is, it’s not like I honed in on Yale and then went to Yale. I honed in on the art school that was good, but cost about $25k a year. So after my degree, I owed upwards of $100k in loans and I didn’t even go to med school!

I’m happy I had an opportunity to go to college, but I really wish someone would have sat me down and explained how much I’d owe and what that number would mean.

Four years later, I’ve still barely made a dent in it.

@elizabeast Hey, I did the same thing! Nobody in my family had gone to college, so they didn’t tell me that kids with no money had no business going to NYU for a fancy degree in “Individualized Study.” I could have DEFINITELY gotten some significant scholarships at a less-expensive school…if only I had known to apply!

WaityKatie (#1,696)

@mirror_father_mirror This is the thing that has always mystified me – how do people figure out which college to go to? Because I remember just having this huge pile of unsolicited catalogues on my bedroom floor and just kind of going through them, being like, “this looks nice.” (this was pre-internet). And then sort of randomly choosing about 5 that were kind of nearby and touring some and then just picking one. Plus they never tell you how much financial aid they’re offering until really late in the process. And meanwhile, my dad got his degrees from a state school in the 70′s, so…that wasn’t much helpful financial guidance. I feel like there were probably so many amazing scholarship offers that I missed out on because I didn’t know they existed. And yeah, the debt, that was not “real money” to me at 18, or even 21 when I took out still more of it to go to law school. I now make almost double the most my parents have ever made combined and I still can’t pay that debt off.

I wish I hadn’t stuck it out in a relationship for five years with someone who was horrendously awful with money. I used to take out credit card advances to pay our rent while he spent his money on video games and parts for the Vespa I bought him so that I wouldn’t have to share my car anymore. Ah, young love.

megsy@twitter (#2,192)

@Splendorofmorgan I got out of my relationship like that. He got mad at me for being stressed about money when it was his fault we were having issues… or, rather, I was having issues because he would borrow money from me but waste his on cigarettes and booze. Stupid stupid stupid mistake.

stinapag (#2,144)

Not taking an awesome job in Austin in 2001 because I wanted to stay in the Bay Area an extra year. The firm in Austin got absorbed later that year by a larger firm and I’d have probably tripled my salary by. That firm now pays first years about $50K more than I make now (nearly 15 years into law practice). When I did come back to Texas, it was for a $20K pay cut rather than a $20K increase. It took me six years just to match the firm’s offer. Oh, and two weeks after I turned down the offer, my firm started to self-destruct and the partner I liked took off. It took me a year to get the hell out and back to Texas.

Still, I don’t regret it too much. I wasn’t ready to come back to Texas, and I’ve stayed in the job I eventually did take (ten years now, sheesh) even though it doesn’t pay. I practice the law I like, and I have a lot of time for personal interests too. I certainly wouldn’t have those things in private practice.

My big financial mistake was not inquiring more about the realities of student loan debt when applying to colleges. Thus, I chose a big expensive private liberal arts college, my parents took out 80k in loans in my name, and here I am today. I’ll hopefully make it through the rest of graduate school without having to take out more loans (thanks to a fellowship and TAships) but the interest on those loans alone is enough to make me anxious pretty much all the time.

novembertea (#2,203)

Taking out double the student loans I actually needed – using loans for rent, housing, gas, partially a trip to the UK (I know, I know…) and now I am $45,000 in the hole. My one glimmer of hope is that I probably will qualify for IBR, and all of my loans are gvt loans.


lapgiraffe (#1,336)

Pretending that I could afford a personal trainer, and then continuing with that trainer for way too long because I really liked it. Picture it: late 2009, 25 pounds overweight after two years of grad school followed by a year and a half of unemployment/underemployment, I get a decently salaried position and feel like a rich bitch in charge. Several of my colleagues all have trainers and their stories are great (not to mention they look good) and my old run around the block a few times just isn’t shedding the pounds like it used to. I’m thinking “we all make about the same money, so if they can afford, I should be able to afford it.” So I sign up for a gym, with a good deal, and take the free training session “just to check it out.” They paired me with the best guy, and I loved it!

It started slow, buying the smallest package, promising myself I’d just use it every other week to get fresh ideas and have a little motivation. Wrong. I start going every week, then twice a week, and then I buy the bigger package, and then I buy the even bigger package.

A year goes by, and I’ve got some debt, and I crunch the numbers on what I make monthly versus what I’m spending, and it’s shocking. And YET! I keep going. I keep buying. As the second year approached, I had to quit, and I cried on my trainer that I couldn’t afford him, and if I could I wouldn’t be dumping him, and for him to pray I find a rich husband who’ll let me be one of those wives who spend their days at the gym (jk, mostly, I love working I just need more money for personal trainers!).

All in all, I think I spent 10k on two years of gym time. That includes the gym fee, which of course went up after my fabulous two month special price. I *was* in excellent shape, lost those extra pounds, looked good, felt good. But I was so broke once I quit that I actually had to start working more, my job was awful, I started stress eating and barely exercising, and now I’m fatter than I’m ever been.

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