My Biggest Financial Mistake

We left off on my last post in 2005, driving a gas guzzling 2001 Dodge Durango while commuting an hour and gas being $4 a gallon. 😬 Go back and read Part 1 if you haven’t, because there’s lots of entertainment there that I can look back on now and say..what the?! πŸ˜‚

Back to the Durango part of the story..I had just started Financial Peace University and had also just started dating my now husband in 2007. I really wanted to do the debt snowball and keep the Durango and pay it off. But I was young and stubborn..and well..still financially irresponsible and just flat out stupid. πŸ€·β€β™€οΈ

Sooo..long story short..in 2008 I traded that ole Durango in for a gently used 2007 Nissan Altima. I couldn’t qualify for a car loan with under a 16% interest rate on my own, so my boyfriend (now husband) co-signed. Why are y’all out here enabling my bad decisions by co-signing..can we say enablers?! While I am absolutely grateful for the help on the loans, the now wiser older version of me is like..well..that was a sign I shouldn’t be getting a loan..period!!! If I wouldn’t have had that option, then maybe I would have figured out a different solution that didn’t involve another loan and $300 car payment. πŸ™…β€β™€οΈ

With marriage, my husband brought a 2002 Nissan Maxima that was paid for. We ended up deciding in 2015 to trade it in for a 2014 Nissan Pathfinder SUV that we “needed”. So we did make that Maxima last a minute, and we even kept the Altima after we paid it off. (and my husband is still driving it today with over 200k miles) It smells weird and has different sounds, but it runs and that’s what our requirements list looks like for a car these days. 😜

We ended up selling the Pathfinder because it had transmission issues and pissed me off at the wrong time on the wrong day. The Altima was also causing some troubles, so I decided it was no longer safe to commute in. We ended up doing some minor repairs and my little brother used the car for a year or so. Fast forward to 2017 and impulse buying my 2015 Infiniti Q50..cause I need a luxury car that my kids can spill their drinks and empty snacks all over in, and slam the doors into anything that is there when they open them. It’s also important to have premium gas for a commuter like myself. πŸ€¦β€β™€οΈ

Happy ending though..sold the Infiniti and replaced with a paid for in cash 2013 Nissan Altima with 124k miles on it. So we now have NO car payments and two Nissan Altimas to get around in.

I think it’s time to analyze the overall effect this financial mistake of having a car payment for 18 years had on my overall financial wellness. Hopefully this will help prevent it from happening to others in the future. If you take an average of $350 a month over that 18 years, that’s $75,600.

πŸ™„πŸ˜¬πŸ˜­πŸ€’πŸ˜³πŸ€¬πŸ€”πŸ€¦β€β™€οΈ

I could have easily had one or two cars last me through that timeframe for under $10,000. What would life be like had I taken that money and invested it or saved it and used it for down payments on 4-5 rental properties? I could have used the cash flow to pay for a car of my choosing. Also, did having to ensure I could cover that $350 every month make me less of a risk taker on chasing dreams and playing it safe for a steady paycheck? Deep thoughts and questions we will never know the answer to.

What I do know is that I drove myself down a road paved with bad decisions for 18 years, but better late than never to realize it’s time to take a different road. πŸ˜‰

I’m curious..what is your biggest financial mistake and what did you learn from it?

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Giving credit to your credit score

Everyone is always telling us to check our credit scores and there’s so many free resources out there. Even my five year old was on his IPAD and told my husband that he was checking his credit score. πŸ˜‚

Credit scores are now used more than ever and go outside of credit cards and loans, to where now employers can screen your credit in the hiring process, and even your insurance rates can be affected. But does everyone know how you got the score you got and how to improve it if you don’t like the number you see? πŸ‘€

I remember trying to get a car loan in my early twenties, and being surprised when only one lender approved me with a 16% interest rate. I was really embarrassed about my situation and how out of control my finances were that I couldn’t even get a loan with a decent interest rate(which actually ended up being a good thing because it forced me to take a look in the mirror and get my shit together). πŸ’©

At the time, I didn’t understand health insurance and had some medical bills go to collections, along with a few utility bills from when I was a renter and thought roommates had paid. I also had 3 credit cards that were all basically maxed out and a bazillion dollars in student loan debt. Of course the banks didn’t want to lend to me, nor should I have even been looking at buying a gently used car, but there I was. πŸ™„

A few months after this experience, I went through the Dave Ramsey total money makeover, and made several changes, including paying off the $15k of credit card debt and all of my small collections that were around $1,000 in total. My score immediately jumped from the low 600’s to 700’s, and within 3 years, it was mid 700’s when we bought our first home. I have continued to pay off my credit card at the end of the month and pay all bills and keep my DTI under control, which got me above 800 a few years ago. πŸŽ‰

If you don’t know your score, start there with a free report. If you do know it and don’t like it, start working on a s.m.a.r.t. goal to get where you want to be. πŸ’ͺ🏼

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