I took a look back at the last ten years of my life and documented my biggest money mistakes. Many of these were due to simple laziness or ignorance on my part. I share them with you today. Do any apply to you?
1. Paying too much for my home mortgage loan
My home mortgage interest rate was 5.2% per year. Had I refinanced earlier, I could have saved a lot. But my parents had an even better idea. They were looking for a safe place to put their retirement money, and proposed the idea of loaning the money to me. So instead of paying a bank, I paid my parents. I get a great interest rate, and they get way better interest rate than any bank can give. If only we had thought of this years ago! Total loss = $10,000
Many of my friends are paying way too much for student loans. We just re-financed my wife’s student loans with an amazing 1.95% APR, saving $1000 month in interest payments!
2. Not planning the family estate
I had no clue about estate planning or why it was important until my Dad passed away. I found out that he was on the title to my condo, and it was done in a way that made it necessary to go into probate. At that time I didn’t even know what that word meant, but now I do. Basically, my property was tied up for a year (not able to sell it for that time; thankfully I didn’t need to), and our family had to pay $10,000 in legal fees to clear it up. This could have been avoided had I had our lawyer look over the title deed to my property before my Dad passed away. Total loss = $10,000.
3. Not investing enough
Its easy to beat yourself up in hindsight about investing. Yes, I do have a diversified portfolio now, but I had way too much money in cash for a long time. During the crash of 2008, I was very thankful for NOT having so much money in the stock market, but now it looks kind of dumb. Even if I had put that money in conservative bonds, I would have made thousands of dollars on it.Total loss = $5000
4. Having an expensive-to-maintain car
Yes, BMW’s are nice and fun to drive, but when it comes to repairs, you’d better have your wallet ready. I had my cooling system konk out on the freeway, costing a fortune. I had a nagging engine oil leak. I have James Bond-esque runflat tires that cost $200 each to replace. I figure I paid five grand more in car repair costs than what a more reasonable car would have cost. I could have had a kickass vacation to Bavaria for that much money. Total loss = $5000
5. Using COBRA instead of private health insurance
When I quit my corporate job, I went on to COBRA health insurance without looking at private insurance costs. COBRA was supposed to be a benefit, right? I actually dreaded the day when COBRA would run out.
But after it ran out, I was forced to shop for private insurance. I found out that COBRA was actually really expensive, over $200 more than private insurance! Total loss = $3900.
6. Not shopping for car insurance
I find shopping for insurance to be about as exciting as watching paint dry, so I never did it. Only after I moved to a different city and was forced to get new car insurance did I realize how much I was overpaying. Doh! Total loss = $3000
7. Not buying generic items at the grocery store
I don’t buy many groceries, or else this figure would be much higher. Out of simple laziness, I would always buy my favorite name brands at the grocery store, when the generic is often the exact same thing. Total loss = $700
8. Having cable TV for too long
My cable TV bill was pretty reasonable for a while, after I moved to the East Coast, my cable TV bill went up big time. I tolerated it for a year, but then when they raised it over 10%, I said “enough is enough” and experimented with free broadcast TV. After I did that, I realized I should have dumped cable a long time ago. Total loss = $1100
9. Having a land line for too long
Of course, I got rid of my land line a while ago, but I probably had it for a few years longer than I needed to. It was only $20 per month. I kept it “just in case”, and because I was too lazy to cancel it. But the only people who called me on it were telemarketers. Total loss = $480
10. Buying crap I didn’t need
I am pretty good about not spending money on frivolous stuff, but I could always do better. I think we could all benefit by asking “do I really need this badly?” before buying things. My biggest culprits were sports/exercise equipment, clothing, and music equipment. I recently cleaned out my closet and found several expensive items that I had never worn, not even once!! Total loss = hundreds or thousands of dollars