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My Biggest Financial Mistake

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We learn by doing. Failure can lead to success. My biggest financial mistake was a WHOPPER - figuratively and literally - but I learned a lot from it! Hopefully, you will learn from my past mistakes and those that are still ongoing.

With a pseudonym like FinanceSuperhero, you might think I have always had my finances in order, or even that I do in the present. To be honest, my wife 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 one financial mistake. Some of these are ongoing, waiting to be corrected.

On this site I aim 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.

My Biggest Financial Mistake: A $650 Meal in Europe

Yes, you read that right: $650.

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.

My Biggest Financial Mistake
Playing my trombone in downtown Halle, Germany

When we left for the tour, I was confident I had planned ahead and accounted for all of my needs for the roughly three week adventure. For necessary purchases, I planned to use 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 very important.

On my last afternoon of the tour, while waiting for my return flight to Chicago, I made an innocent yet costly financial mistake: I purchased dinner at the airport Burger King using my debit card.

Fast forward two months later. I got home after working a long shift at the local movie theater back home in Michigan when I realized 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 with my bank. After a filling out a few online forms, I registered my account online and logged in.

Remember, I was a working-poor college student, but 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 find out how this could be possible, as I hadn’t used my debit card since my dinner at the airport Burger King!

BK
A delicious meal, but not worth $650

The bank representative with whom I spoke gently informed me that my most recent transaction –again, Burger King– and the international transaction fee caused an overdraft on my checking account of roughly $2.

I was ticked off – at myself for such a stupid financial mistake, but also at the bank, as I had not received a statement or a phone call about 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 anger was shifted from the bank to the university mail room. After calming myself, I made a phone call to the mail room 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 my eagerness to check out for the summer and prepare for the European tour, I had checked the box 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 fall semester repaying the fees and penalties.

To this day, this fateful meal at Burger King is still the most expensive meal and biggest financial mistake of my life. A small part of me still cries when I smell a flame-grilled Whopper.

Current Mistakes

I have come a long way with 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 my wife, I made even 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.

My wife and I have now been married for six years, and life is good. Don’t let me fool you though. We have some things to take care of even today.

  • Mrs. Superhero and I do not have wills at this time. Granted, we do not yet have children at this time, but making a will is really easy. 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 2 AM 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 financial mistake.
  • When purchasing our home, we 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 great 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!

Related:

There you have it, readers. If you didn’t realize it before, now you know: FinanceSuperhero is a mere personal finance mortal after all.

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Readers, what has been your biggest financial mistake? How much did it cost you?

 

 

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  2. Ahhhhh, FSH. You are still so young and still have so much to learn” (spoken with faux Kung Fu Master accent). So many mistakes to be made and so little time to make them lol.

    I think my best, most recent doozy was about 7 years ago when I had a sales job that paid pretty decent bonuses. Yes, you already know what’s coming next.

    So I got a nice bonus and decided I needed to upgrade my ultra-reliable 10 year old Mazda. Now what does an up an coming financial idiot need? A Mercedes SUV with leather interior etc etc etc. Obviously my bonus wasn’t enough to go new so I found a pretty cool looking used one with tinted windows, mags etc.

    I had it for about 6 months. First the turbo shit itself on a road trip which incurred the extra costs of accommodation, transport home, transport back to pick it up etc. That cost me about $2,500. Then one of the computers shit itself. Another $2,500.

    All fixed!! Beauty……and someone stole it.

    All up, $5,000+ for a car which gave me 6 months of pain in the ass.

    I hope that makes your BK double Whopper with supersize everything pale in comparison. Love the post mate.

    By the way, I’m driving a Mazda again. So reliable hehe

  3. Thanks for laying it all out there! We all make mistakes that hurt financially, it’s all about reducing those as best as possible and learning from them going forward. Thanks for sharing!

  4. That’s one whopper of a mistake. 🙂 Sorry couldn’t resist.

    We all make them, it important to learn from them and correct going forward. We have made several. Overspending for years, never having a plan for our money. We know better now. We continue to improve everyday.

    I’m most excited about teaching my three teenage children these things and see how they do with them early in their financial lives.

  5. I would not necessarily call this a mistake, but this is probably the worst decision I’ve made from a purely financial standpoint.

    Mr. Beach Life and I met right around the time when leases get renewed in our college town. When we decided that we wanted to live together, we each still had 9 months left on our respective leases. Instead of waiting 9 months, or moving into my apartment (he has a kid and we thought the transition would be easier if it was a fresh start) we signed a lease on a house before we had found anyone to sublet our respective apartments. I ended up paying two months rent on the old apartment and then bought out the remainder of my lease. It probably cost me about $2500 to stop living in a place.

    BUT Mr. Beach Life and I have built a great life together and now live in a house we bought so we don’t have to worry about leases anymore.

  6. Holy cow, that’s one expensive Whopper! I think a 30 year mortgage is perfectly fine. It gives you more flexibility. You can always pay extra and reduce the interest that way. I like having a little more cash to invest in the stock market.
    My biggest mistake? Probably quitting my job before I could get a separation package… I could have waited about 8 months and receive some kind of package. It worked out so I can’t complain too much.

    • When I saw that you had commented, I thought you might cite that story as your biggest mistake, Joe. In the end, it is funny how our mistakes have a way of working out OK in the end.

  7. I had a similar problem when I studied abroad. I thought I had paid off my CC in full before leaving, but was a few dollars short. I was gone for five months. My parents said they were checking my important mail for me & I would check in with them. I was shocked to get home and see that the $3 overage had happened and catapulted to the card being closed by the time I was home. I was so frustrated.

    • That makes three of us (you, Allan, and me) who have been damaged by trips abroad, ZJ. I don’t feel so stupid anymore.

    • I, too, know the pain of student loans, Michael. But it is such an exhilarating feeling to be rid of them when that time comes.

  10. When I first travel back to the Philippines to visit, I used my credit card like I would do here in the US. I didn’t know that there was foreign transaction fee and the exchange rate conversion was bad. When I got back to the US, I saw that my total credit card charges were too high. Figure, it was the foreign transaction and the peso-to-dollar conversion. So, every time I go back to the Philippines, I either bring some dollar to exchange or borrow some money from my sister there who has peso and just give her dollars.

    • I feel your pain, Allan. It’s nice to know I’m not the only one who has been victimized by foreign travel.

  11. Oh mistakes, mistakes, too many to mention!
    I got my first car when I got my first job. My bank balance was low and every paycheck counted. My car was due for its M.O.T. (an annual required safely check for cars in the UK) and I foolishly took it along to a local mechanic without checking in with anyone for recommendations. I COMPLETELY fell for the ruse when they called me at work to tell me the list of terrible things that was wrong with my little car and needed fixing. Of course, they rattled the list off very quickly with no explanations. Then The price. Oh my! I agreed to it all too and paid! Arrgh! I still feel foolish thinking about it!

    • Ugh… I’ve been there, Mrs. Pie. Mrs. Superhero and I sunk around $1,500 into a 13 year-old vehicle shortly after getting married. It was a big risk, and I don’t count it as a mistake simply because it worked out well – we were able to drive the car for three more years without any significant repairs. Car repairs are the worst!

  12. I spent years just putting things on my credit card and letting it add up. Sometimes we can go on so long before we realize what a catastrophe it is. My kryptonite is taking my kids to the bookstore (which of course also sells toys) for fun. Never get out of that unscathed.

    • Linda, I can’t imagine the pressures of having kids and wanting to provide for them while also sticking to a responsible budget.

  13. Sounds like your current mistakes aren’t too bad. We all make them. The trick is not making the same ones twice.

    We didn’t have a will either until we had kids. Actually, our financial planner at the time told us she wouldn’t help us with our investments until we got the will established – tough love!

  14. You already know my investing mistakes so will save you that story again! One of my biggest mistakes was buying Oakley shades, from the Oakley store as a sophomore. I spent 25% of my entire account on them and had no income coming in. The shades are awesome but man were they way too expensive!

    • Been there, Stefan. I did a similar thing with a pair of Jordans in college – I probably should have included that in my post!

  15. That’s a rough lesson!

    I don’t even remember how we got by without internet banking, it makes everything so much more convenient.

    My biggest mistake is using student loans to pay for things besides class and books

  17. The mister and I also regret not getting the 15 year mortgage. We’ve been in this house 11 years, longer than we expected, and that mortgage could be 100% gone in 4 years if only we had stretched just a little bit more. D’oh!

    • I imagine I will share in your frustration when that time comes for us, provided that we don’t refinance, Jen. Our effective interest rate is good enough due to a first time home buyer tax credit that we will probably just end up making additional principal payments to accelerate payoff.

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