Shoestring Cottage

Money Environment Home & Health

  • Home
  • New to Shoestring Cottage? Start here
  • About Me: My best life on a shoestring
  • Fifty Ways to Save Money Now
  • Favourite Frugal & Healthy Recipes
  • My Frugal Bookshelf
  • Work with Me: Shoestring Cottage Media Pack
  • PRIVACY POLICY

Ten embarrassing money mistakes I have made

18th August 2019 by shoestringjane@outlook.com 11 Comments

Share on Facebook Share
0
Share on TwitterTweet
Share on Pinterest Share
0

money mistakes

Mistakes, I’ve made a few…. and I do regret a lot of them! I started on my financial education very late in life. But there is no point in dwelling on them and feeling annoyed with myself.  The only way to resolve money mistakes is to become aware of them, learn how to do things better and just get on with it.

However, you probably could avoid some of my money mistakes. Here is my list of monumental errors and what I would do differently.

My most embarrassing money mistakes

1# Mortgages and second mortgages

When I was married to my first husband, I was unbelievably naive and uninterested when it came finance. We both were actually! We took out a mortgage when house prices were hugely inflated in the late 80s, just before the crash.

Fortunately for us, we had a tiny and very modest house. Although house prices plummeted, by the time we sold it 7 years later our price band had recovered and we made a tiny profit.

money mistakes

I also thought we should keep moving to buy bigger houses. This works for some I know, but I wish now that we had stayed in our second house, which was a modest semi on a quiet street, and over paid the mortgage rather than constantly stretching ourselves with bigger properties that we couldn’t really afford.

We also thought absolutely nothing of taking out a second mortgage for home improvements and did it a few times. Each time, when we moved house, we paid off the second mortgage with some of the equity. Although the home improvements did improve the value of the house a bit, it wasn’t by much. This meant that when we got divorced, we had hardly any equity left in our home and came away with much less than we should have.

If we had stayed in the first or even the second house rather than moving several times and spending each time on home improvements we would have been quids in.

What I would do now: I would have bought a modest house that didn’t need big renovations and focused on paying off the mortgage as soon as humanly possible. I certainly wouldn’t have taken a second mortgage out.

2# Not saving

money mistakes

I only started saving money in my fifties. Previously I never had more than a couple of hundred pounds in savings, which in theory were for Christmas but in practice often got spent on something else.

I can’t help but look back in frustration at how much money I wasted on takeaways, nights out, clothes, furniture and evenings in the pub, especially before I had kids. At that point I actually had spare income after all the bills had been paid, which I just frittered away without a thought.

What I would do now: If I had started a savings plan – perhaps 10% of my income – in my twenties I would be laughing all the way to the bank at this point. I keep urging my children to do this!

3# Not having an emergency fund

This is another biggie and the reason my Christmas fund often got looted. If you have no emergency fund – a pot of money to help when the boiler needs replacing, or the car dies or you lose your job suddenly – then you are in for a lot of stress and risk getting into serious debt.

What I do now: I read Dave Ramsay and realised the error of my ways. We started saving for a crisis fund and haven never looked back.  This post explains in more details why everyone needs an emergency fund.

4# Not over paying the mortgage

It would no doubt have been a struggle on occasion, especially once my daughters came along, but there is no doubt in my mind that at certain points in my life I could have over paid the mortgage.

For many people, their mortgage is one of their biggest monthly expenses. Getting rid of this burden as soon as possible gives you more options about how to live your  life. There is a whole financial independence movement among young people now, aiming for FIRE (Financial Independence Retire Early), where paying off the mortgage is the foundation stone to achieving this.

What I would do now: If I had my time over, I would have focused my energy on over paying the mortgage whenever possible, after saving my emergency fund and putting money into a savings plan.

5# Not investing

money mistakes

Once you have an emergency fund in place and have started building some savings, you can start to grow your money by investing.

I thought investing was just for crusty old men in suits. It never occurred to me that it would be something I could consider. I wish I had started saving and investing years ago. Another of my huge money mistakes.

What I do now: Better late than never. After reading several posts from other money bloggers, including this interesting one from Faith at Much More With Less, I have started investing a small amount each month. I will give you more information in a future post when I can say how well my investment is doing!

6# Paying for Christmas on my credit cards

Many people do this…. Paying for Christmas on your credit card means a miserable start to the new year, in my experience. I did it once, then spent a lot of the following year paying it off. Never again.

It is much better to save in advance for Christmas and other occasions like birthdays and holidays. It takes the stress out of the occasion when you have set a budget in advance and saved the money rather than getting into debt.

What I do now: A regular amount goes into an account each month for Christmas, birthdays and holidays.

7# Taking out loans for purchases rather than saving for them

When I was younger, I suffered badly from ‘I want it now syndrome’. I would frequently buy items on credit, because I wanted them that minute rather than saving for 6 months or so.

When you wait and save you won’t have to pay interest on your purchases. Cash always makes everything cheaper, in my experience (and if you buy second hand you won’t have to wait so long).

Because I was oblivous to the ridiculous rates of interest charged, I also once had a store card that charged me 45% interest! Criminal!

What I do now: I don’t have any store cards and never would again. It has also been a long time since we had any kind of loan for things like cars and household appliances. We save up if we need to and buy second hand because it’s so much cheaper. If an urgent purchase is required we always have our emergency fund to fall back on.

I also know that I would rather have an ancient car worth a few hundred quid that a brand new model with a big debt attached.

8# Not setting a budget

I always had an ostrich approach to budgeting. In other words, I never had a budget at all and kept my head firmly in the sand.

money mistakes

I just hoped that we would get to the end of each month without going into the overdraft and began to drastically curb my spending as we approached pay day. Sometimes we did, but mostly we didn’t. This meant starting each month in the red. Not great for your peace of mind.

What I do now: I know exactly how much money we need in the account each month to cover our bills. On top of that, I budget for petrol, food, clothing, outings, etc. It has become even more important to make a budget and stick to it since I took redundancy and moved into self-employment.

9# Not meal planning

money mistakes

I think that meal planning is a big part of keeping track of your finances and sticking to your budget. It is far too easy to find yourself too exhausted after a busy day to cook and, as a consequence, to spend half of your week’s grocery budget on a takeaway. Or to chuck food away because you haven’t planned for it and forgotten it was hiding at the back of the fridge. I have been guilty of both and it wastes so much money.

What I do now:   I plan all of our dinners, and have a rough idea of what we need for breakfasts, lunches and snacks too. We are flexible on this and chop and change as necessary. I also have easy stuff in the  cupboard such as stir in sauces for pasta for those occasions when we are unexpectedly rushed. This post explains the benefits to your wealth and your health too of planning all of your meals each week.

10# Allowing insurance policies to auto renew

You know how it is…you know your car, house, pet, life insurance is coming up for renewal. You know you should do some comparisons to see if you can get it cheaper but you really can’t be bothered. You will do it tomorrow. Before you know it, it has auto renewed.

Even worse, you take out an extended policy on an appliance and forget to cancel it when whatever you bought has died and gone to appliance heaven. I think taking the policies out in the first place is a money mistake most of the time, but forgetting to cancel is bad.

I have done both of these things in the past. The shame!

What I do now:

Fortunately, nowadays insurance companies are obliged to send out reminders when your policies are close to their renewal dates. I have a look on comparison sites and Money Saving Expert to find the best deal, and don’t mind swapping. I also look on TopCashBack and QuidCo to see if I can get some cash back (these are my referral links).

On the plus side…

Woman on the edge….

In case you are thinking that I am a total disaster financially, I did manage some sensible things in my youth.

I always paid my National Insurance stamp.

I also paid into an employer pension scheme before you had to. In fact, in every job I ever had where a pension was offered.

I have borrowed small sums of money in the past, but never had huge, unmanageable debt.

I have always tried to buy second hand when I could. For example, I have never bought a new car. I generally prefer second hand furniture as the older stuff is so much better quality. In addition, I have always loved a charity shop and a boot sale – bargain hunting is in my genes.

So this is the list of my worst embarrassing money mistakes. As I said in the intro, there is no point in wasting time and energy on regrets and guilt. The thing to do is learn from them and move on.

What are your worst money mistakes?

Share this:

  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)
  • Click to email this to a friend (Opens in new window)
  • Click to share on Reddit (Opens in new window)
  • Click to share on Tumblr (Opens in new window)
  • Click to share on Pinterest (Opens in new window)
  • Click to share on WhatsApp (Opens in new window)

Related

Filed Under: MONEY Tagged With: Personal finance

Privacy & Cookies: This site uses cookies. By continuing to use this website, you agree to their use.
To find out more, including how to control cookies, see here: Cookie Policy
« A meal plan using what we have #SlimmingWorldFriendly
Sign up for #SecondhandSeptember »

Comments

  1. Eloise (thisissixty.blog) says

    18th August 2019 at 12:46

    Some great advice, Jane. The first point about staying put and overpaying the mortgage is an interesting one. My second husband and I have done exactly this – clearing our mortgage in 14 years. Our income was such that we could have traded up but we decided paying off the mortgage was the most important thing.
    It seemed that it was right for us but I look at friends who traded up and up instead, and then later were able to downsize and release a load of cash, which of course we can’t. I think the thing is to consider carefully ALL scenarios before making a move.

    Reply
    • shoestringjane@outlook.com says

      18th August 2019 at 14:29

      Good point. It could have worked!

      Reply
  2. Alison Butler says

    18th August 2019 at 14:28

    Thank you for your honesty with this. I have let budgeting and meal planning slip a bit over the last couple of months, and need to rein it back in. I am awful at putting my crafts for sale on ebay, not exactly sure why, as have never had any adverse criticism, and many people do very well. Need to simplify the process I think and use phone/tablet rather than camera and laptop.

    Reply
    • shoestringjane@outlook.com says

      18th August 2019 at 14:32

      It is very easy to use the app I find, but I still finish mine off with the advanced tool. List them – could be very lucrative! Christmas is coming… you could also do an Instagram page maybe? People love hand crafted stuff

      Reply
  3. Su says

    18th August 2019 at 18:02

    I am a bad, bad frugaller! I never meal plan before shopping and honestly, can’t see why I would. I much prefer to see what’s cheap or reduced and plan my meals around that. I do set a budget for my shopping and stick to it and I do have a brief list of stuff that i need. Maybe living alone helps, but I can’t see me ever meal planning.

    Reply
    • shoestringjane@outlook.com says

      18th August 2019 at 19:01

      I think if I lived alone I don’t think I would either, to be honest

      Reply
  4. CurlyTop says

    18th August 2019 at 20:11

    Great advice as always Jane. Hindsight is a wonderful thing isn’t it, especially as we enter our older, more sensible years. A lot of what you said, rang true with me, especially the buying side of stuff, only thing is it went from nights out and clothes when single, to things for the house when I moved in with DH. Looking back I wasted a lot on frou frou’ing the place ….and for what, the only people that came to see me were family and they weren’t interested if I had a new vase. As Maya Angelou says, ‘when you know better, you do better’.

    I’m by no means perfect but I now meal plan (and have a spreadsheet going back 10 years that I record my monthly food shop on – that acts as my reality check at times), I’m always looking at a way to save on household bills.

    We’re lucky in that we are comfortable and have some savings but I always worry about money, particularly because I got myself into debt and had a Debt Management Plan for a number of years so I know first hand how hard it can be. We got through it and I won’t go back there. We save for everything now and it feels nicer paying in advance rather than after the event.

    I’m thankful that although I have m.e. and fibromyalgia, I can still hold down a 32 hrs per week job…just. I’ve not felt right for some months and have had a few tests ….me bein me, thought it was my age and being a woman of a certain age but the hospital called me on Friday to inform me I have a moderately blocked artery to my heart so I have to undergo more tests to assess impact. Hey Ho, it never rains but it pours but at least by being sensible in recent years, we should be okay if anything changes in the future.

    Keep sharing your tips; you help keep us all grounded and do a great job

    CurlyTop

    Reply
    • shoestringjane@outlook.com says

      18th August 2019 at 20:15

      Oh no! Sorry to hear that. What can you do? I have fibromyalgia too. That makes you feel ‘ not right’ and I am sure ME is worse, so it’s easy to miss other things. Hope it works out ok

      Reply
  5. Julia says

    19th August 2019 at 11:13

    All good advice. I think being financially sensible is a bit like quitting smoking! When it comes to trying to get our kids to be sensible – as much as we may know what they should be doing, we can urge them until we’re blue in the face but they are the ones who need to be in the right frame of mind to actually do it!

    As much as I am hopeless at maths, I seem to have been the one holding the financial reins all my married life – at least in terms of the household budget, and being a saver and bit of a cheapskate has served us well over the years!
    Having an emergency fund has saved us time and again – and not just from household emergencies. Husband fell victim to a £300 scam last month, but luckily I had the money saved to allow him to be able to cover his credit card when it came in. The peace of mind having one brings cannot be stressed enough.

    Reply
    • shoestringjane@outlook.com says

      19th August 2019 at 11:49

      Totally agree about kids. I think some of the messages are getting through now

      Reply
  6. Faith A. says

    21st August 2019 at 09:12

    Glad my post about investing was hopeful! Hope your investments work out well

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Categories

  • ECO FRIENDLY LIFESTYLE
  • FRUGAL CHRISTMAS
  • FRUGAL FOOD
  • FRUGAL GARDEN
  • FRUGAL HOME
  • FRUGAL LIFESTYLE
  • FUN AND TRAVEL
  • General
  • GENERAL POSTS
  • HEALTH AND WELL BEING
  • MAKING MONEY FROM HOME
  • MONEY
  • SLIMMING WORLD

About Me

Would you like to take control of your finances, pay off your debts and save for the future? At Shoestring Cottage we aim to show you that you can live a good and happy life on less than you think, you can get off the consumer treadmill and you can live more simply and healthily and not feel deprived.
We are also moving toward a less wasteful, more sustainable lifestyle and believe frugality and sustainability go hand in hand. Read More…

Copyright © 2021 · Delightful theme by Restored 316

loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.
This site uses cookies: Find out more.