My Biggest Money Mistake
I'll be the first one to admit that I had my fair share of financial mistakes. Everyone in one point in their lives will go through a financial hardship, but the most important part of this process is to learn from your mistakes so you never follow the same path again.
No matter what kind of financial difficulty you're going through; just remember that there are other people who are in your shoes as well.
Here are some of my worst financial decisions that I've encountered.
Applying for Credit in College
I still vividly remember when I first signed up for my Citi credit card. There were representatives on campus giving away free t-shirts to anyone who applied for a credit card regardless of whether they got approved or not. Looking back, this was a genius idea.
If you think about it, college students do NOT have an established credit report. This means that the likelihood that they have delinquent accounts on their credit cards is slim to none. Plus, you can only apply for a credit card once you've turned 18 years old.
I didn't understand how credit cards worked. All I knew is that I had a minimum payment I was supposed to pay, and I should be debt free. I loved the idea of "borrowing" thousands of dollars and only paying $40-$50/month. I mean, who wouldn't take this deal right?
Needless to say, I did end up racking up and maxing out my credit cards. To be exact....$5,000 in one semester! How I got out of debt is a whole another story we can get into later.
Buying my First Condo
When I first bought my condo a year after I graduated, I was ecstatic. It's everyone's dream to become a homeowner. I had this idea of turning it into the ultimate bachelor's pad and a place where all my friends could hang out. However, we all know there's a huge price to pay when it comes to homeownership. Admittedly, I was naive and didn't really take the time to see what other hidden expenses come with this huge price tag.
A year later, I got my first property tax notice. I was in shock and thought to myself, "This can't be right!" I was paying right under $6,000/year on property taxes. Property taxes typically increase every year, and I had no idea what I got myself into.
I was lucky enough that the property value didn't decline as much as other properties have across the nation, but it did decrease about 10%. In society, we're typically told that buying is better than renting because you're actually building equity. About 5 years ago, I think most people could probably agree with this statement.
Times have changed. Is buying a property necessarily better than renting? If I could go back in time, I would probably have not bought the property because of all the miscellaneous costs involved with it: furniture, property taxes, insurance.
So What Next?
It would be nice if we could all build a time machine to undo our mistakes, but unfortunately there isn't. Learning from your mistakes can yield greater rewards than you can imagine. As they say, some of the most successful people have failed over and over again before they were successful.
Authior Bio: Kevin is one of the founders of SpringCoin and a writer for Huffington Post. He is a certified credit counselor with the NACCC and runs the SpringCoin Blog.
Thanks Kevin for swapping blogs with me today! I think we can all learn from each other's mistakes and it's great to hear everyone's different experiences.
What was your worst money mistake? If you're a homeowner, do you regret buying your property?