Financial Mistakes I Have Made And How to Avoid Them

Everyone has made some kind of financial mistake sometime in their life.  It’s like learning to walk, we have to fall sometimes so that we can learn from our mistakes. Some financial mistakes we make at times can be small or very stupid, however, we tend to repeat this mistake over and over because we don’t see the big dent it causes in our financial life fast enough to learn our lesson.

Some financial mistakes made are huge and we learn right away what kind of mess we got ourselves into. Unfortunately, schools don’t teach financial literacy like they do in algebra which is the main root of the problem. However, one of the biggest financial goals we should have in our life is to not keep making the same mistakes over again.



One of the biggest not to mention, cringe-worthy mistakes I made was that I didn’t even have a basic understanding of my cash flow. I spent money without thinking about the dollars I was putting out or if I even had enough in my checking account to cover what I was charging. Now I budget and know where my money is going with the help of the Mint app.

LESSON: Study your inflow and outflow and always have a budget or learn how to budget. It saves unnecessary spending.


Even though this was a stupid mistake, I do credit this mistake for my financial awakening in life. When I was about 22, I bought a house for about $250k.  I did a “stated income” loan and financed the entire purchase and somehow qualified. My payment was about $2000/month and I was still in college only making about $40k per year.

Even though I didn’t miss a payment and we squeezed by each month, I knew I would never get ahead of the game financially if all my money was going to this house.  Luckily, I was able to rent it out for a couple of years until the market came back up and I sold it.

LESSON:  Don’t buy a house you can’t afford, it will eat you up in so many ways.  By having a mortgage you can afford with ease, you will set yourself up to win financially and be able to pay your house off a lot faster. This cut across – don’t buy what you cannot avoid.


I can’t say I never saved because I did. But my saving was sporadic at best and was often spent just as suddenly and frivolously. I always think of the episode of Friends where Monica is about to ask her parents to borrow money after she loses her job until they confidently assert that surely she must be prepared for her unemployment because they always taught her to save ten percent of every paycheck. Yeah… not true of Monica, or me. Now, I automate savings to my emergency fund and other savings accounts.

LESSON:  10% of monthly saving goes a long way. Take it seriously.


In case you haven’t figured this out yet, I had no willpower to save or be smart about money. I loved — and still love — shopping. Somehow, all the clothes I already owned paled in comparison to the new dress and shoes at the mall. I shudder to imagine what it would have been like if Amazon had existed in my early 20s. Also, friends? Bars? Happy hour? Yes, please! I had no limits. My 30s have taught me that staying home in sweats (or going to a friend’s house) is a real mood, and a bottle of wine goes a lot farther than the $20 vodka soda from the club.

LESSON:  Avoid going to the mall. Make an online purchase and have them delivered to you.


We’ve all made dumb decisions, this one of mine falls under the “what was I thinking category?”  Back when Voyager phones were cool (I had one, so they must have been cool) I bought 10 voyagers phones from what I thought was a reliable guy on

I bought them for $1,000 and figured I could sell them for at least $300 each and make a quick cool profit.  The seller required that I wire the money.  I just thought that was custom since he was international. Needless to say, I never saw the phones and I never saw my $1,000.

I chalk that one up as a stupid lesson I had to learn early in life so I didn’t make a much worse mistake later on in life.

LESSON:  Don’t trust strangers.  Also, if it’s too good to be true, that’s because it is.


Even though I’ve made some dumb financial mistakes, I feel pretty good about the financial mistakes that I’ve avoided in my life.  Here are a few that I feel really good about:

  1. I never took out student loans.
  2. I started investing really young.
  3. I paid off my house really fast.
  4. I pay to tithe and give in other ways.
  5. I budget.
  6. I never pay credit card interest.
  7. I have an emergency fund.
  8. I plan for my latter years.
  9. I buy quality items that last me a long time.
  10. I’ve never co-signed a loan for someone.
  11. My siblings and I work together on our finances.

I feel proud of my accomplishments and what I’ve learned over the years.

Financial mistakes are not always bad, hopefully, they help us learn and not make bad ones.  I know the mistakes I’ve made have helped me tremendously.  So don’t feel bad if you’ve made some stupid financial mistakes.  More than likely, that mistake will help you in your life.

What financial mistakes have you made?

More importantly, what financial mistakes have you made that have actually helped you change for the better? — Flee free to post and let talk about it.

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