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With a pseudonym like FinanceSuperhero, you might think I have always had my finances in order, or even that I do in the present. In truth, Mrs. Superhero and I are on a long and winding journey with money, just like each and every other person we know. That journey has seen its share of triumphs and more than its fair share of blunders. Worse yet, some of these errors are ongoing, waiting to be corrected.
In today’s post, I am aiming to be transparent about my past and present financial mistakes. I hope that in doing so others will be spared from making similar mistakes and that greater accountability (and maybe even some self-embarrassment) will drive me to corrective action.
A $650 Meal in Europe
As a college freshman, I was fortunate to have the opportunity to tour Germany, Austria, and Hungary as a member of my university concert band. While I was not terribly excited about the tour at the time, I look back on the experience today and recall fond memories of staying with host families, experiencing the true culture of three unique countries, sharing the gift of music, and performing service projects.
When I embarked upon the tour, I felt secure that I had planned ahead and accounted for all of my needs for the roughly three week adventure. For necessary purchases, I planned to utilize a balance of cash, my debit card, and my credit card. Like most college students, I was poor and on a limited budget, so keeping close tabs on all purchases was of paramount importance.
On my last afternoon of the tour, while waiting for my return flight to Chicago, I made an innocent yet costly mistake: I purchased dinner at the airport Burger King using my debit card.
Fast forward two months later. I had just arrived home after working a long shift at the local movie theater back home in Michigan, when it occurred to me that I had not received a checking statement in the mail in quite some time. Keep in mind, internet banking was in its infancy at this time, so I had not yet enrolled via my financial institution. After a filling out a few online forms, I registered my account online and logged in.
Though I was a working-poor college student, I prided myself on always maintaining a small buffer in my checking account. When I clicked on my account details, I was horrified to discover that my account was overdrawn by nearly $1,000! As you can imagine, I frantically called my bank to inquire as to how this could be possible, as I hadn’t used my debit card since my dinner at the airport Burger King.
The bank representative with whom I spoke gently informed me that my most recent transaction –again, Burger King– and the accompanying international transaction fee caused an overdraft on my checking account of roughly $2. Naturally, I was irate: at myself for my carelessness, but also at the bank, as I had not received a statement or a phone call regarding the overdraft.
The kind gentleman, who had already taken a verbal lashing from me at this point, explained that my statements had been mailed twice, along with multiple First Class letters informing me of the overdraft. The problem? The statements and letters had been sent to my university mailbox, over 200 miles from home.
My focus of my ire quickly shifted from the bank to the university mailroom. After calming myself, I made a phone call to the mailroom to question why I hadn’t been receiving forwarded mail. The clerk I spoke to promptly checked my records and revealed that I had made an error: in the midst of my haste and eagerness to check out for the summer and prepare for the European tour, I had checked the box associated with the prompt to leave my mailbox open during the summer instead of the box associated with mail forwarding. I sheepishly thanked the clerk for her help and phoned the bank an additional time in a list ditch effort to recoup some of my losses.
To make a long story short, I placed a long series of phone calls and was able to sweet talk my way out of approximately $350 in overdraft fees, leaving me with a $650 bill. Much of my summer earnings had already been committed to purchasing textbooks, so I spent my work study earnings during the first two months of the subsequent fall semester repaying the fees and penalties.
To date, this fateful meal at Burger King remains the most expensive meal of my life, and a small part of me still cries when I smell a flame-grilled Whopper.
Fortunately, I have come a long way with regard to handling my finances since college. As a junior, I began meticulously tracking my transactions and maintaining a rough budget. Shortly after graduating from college and before securing my first job, I was introduced to the teachings of Dave Ramsey and became a Dave super fan overnight; I read The Total Money Makeover in one day, began listening to The Dave Ramsey show podcasts during workouts, and even bought a Dave Ramsey show t-shirt. I was drinking the koolaid!
Prior to marrying Mrs. Superhero, I made some wise financial decisions. Rather than buying a new car like many of my friends, I continued to drive my 2000 Ford Taurus. While many friends rented their own apartments, I rented a room from a friend-of-a-friend for $400 per month. I lived on a tight budget, to say the least.
Mrs. Superhero and I have now been married for six years, and life is good. Don’t let me fool you, however; I have made some careless financial mistakes!
- Mrs. Superhero and I do not have wills at this time. Granted, we do not yet have children at this time, but with the prevalence of online will services, I really have no valid excuse for this.
- Two years ago, Mrs. Superhero and I got the itch to pursue quotes for finishing our basement. Despite receiving an alarmingly-high end quote from an unnamed company, we submitted a deposit and signed a contract to have a portion of the basement finished. That night, I awoke at 2AM in a cold sweat and realized our mistake. I called the next morning and cancelled, and because we did so within a specified window, our deposit was returned in full. While there was no harm done, this was a potentially-dangerous, stupid decision.
- When purchasing our home, Mrs. Superhero and I took out a 30 year mortgage. At this point, many of you are surely thinking, “So? What’s the big deal?” While our mortgage is well within an affordable range (less than 25% of our monthly income), we would obviously be much better served by saving significant interest with a 15 year mortgage. Fortunately, we have a fine interest rate, which makes refinancing unnecessary as long as we begin paying the mortgage at an accelerated payoff rate in the near future.
- My kryptonite is food, but you already knew that from the aforementioned Burger King fiasco. I enjoy dining out at restaurants more than the average person, which often leads to inflated restaurant spending. Worse yet, I don’t even feel bad about it some months!
There you have it, readers. If you didn’t realize it before, now you know: FinanceSuperhero is a mere personal finance mortal after all.
Readers, what has been your biggest financial mistake? How much did it cost you?