Unfortunately, people are not born financial geniuses. Growing up I hardly learned much in school about certain things such as credit card debt. I made quite a few financial mistakes in my early to mid-twenties. I’m glad I finally wised up a bit. Below are six mistakes that I’ve made over the years. I share them with you so that you won’t have to go through them.
1. Using my credit card for leisure when I didn’t have the cash on me.
Everyone makes mistakes when they are young. This has to be one of the dumbest things that I have done. I can remember numerous times using my credit card to buy drinks at the bar for my friends and me. At the time I thought it was fun and cool, but now I realize that it was stupid. I intended my credit card to be for emergencies. Getting drunk with my friends was not an emergency.
2. Buying a used car without having a mechanic look at it first.
I knew nothing about cars when I purchased my first one in the summer of 2007. I went to a used car dealer in Savannah (I was still a student at the time.) and saw a 2000 Chevy Malibu for $5800. It only had 84,000 miles on it at the time. I had a friend at the dealership with me, but he didn’t know much about cars either. We took the car for a test drive. Everything seemed fine. I put some money down and made the purchase.
About a week later I went to Atlanta to show the car to my family. I was driving on one of the highways when it died on me. The car had a bad fuel pump. I was extremely pissed. I ended up having to take the Greyhound bus back to school. My aunt had the car towed to a mechanic. They said it would cost over $700 to fix. I did get lucky, though. The used car dealership actually paid for it to get fixed. That usually never happens especially when you buy the car as is. I definitely learned my lesson. When my Malibu finally died on me for good last year, I purchased my next car from a mechanic.
3. Sallie Mae
Sallie Mae is hands down the worst lender to get a student loan with. They don’t care if you are having an economic hardship or anything after you graduate. They just want their money. Unfortunately, I made the mistake of borrowing from them in school. Having to deal with multiple phone calls a day where people are asking you to pay is not fun. I wouldn’t wish that on anybody. If you’re still in school, please STAY AWAY from Sallie Mae.
4. Not paying off small loans quicker.
I had a couple of small loans where I took about a year and a half to pay off. After I had received my final statement from the companies I saw that I paid over $100 in interest for both loans. If you have small loans, just pay them. Interest is not a joke.
5. Not always knowing what’s in my checking account.
I didn’t always use my check register to balance my account. A few years ago I used to estimate what I had in my account. Then I would try not to go over that amount. That clearly was not smart. I would forget purchases and check my account to see overdraft fees. All that could have been avoided if I had just buckled down and balanced my books. After a while, you will get tired of paying those fees. I know I was. I am happy to say I haven’t had an overdraft fee in almost three years.
6. Not facing my debt earlier.
I knew I was in debt the moment I was out of college. It really didn’t hit me how much until I got that first statement from Sallie Mae in November 2008. Instead of actively coming up with a plan to pay it off, I just paid when I felt like it or just a small amount. Please learn from my mistake and make a plan to pay that sh!t off. You might have to sacrifice some things now, but it will be well worth it.
These are six financial mistakes that I don’t want you to make. If you’ve already made them realize that your world is not over. You can fix them by taking control right now and coming up with a plan.
What financial mistakes did you make when you were younger? Did you learn from them?