Worst Financial Mistakes

I 100% completely ripped this topic off from Debt Debs, who wrote about it at Frugal Rules.

I used to think of myself as someone who was fairly good about money, considering that I didn’t have much. My credit score is about as high as it could be for someone with no car payment and no mortgage, indicating a stellar history of on-time payments and overall “responsible credit use”…as defined by the credit industry, obviously.

However, recently I’ve come to see that I was not quite as good as I thought I was. I’m not losing sleep over it, exactly, but here are the things I’m going to talk to my godchildren/potential nieces and nephews about, one of these days.

1) My budgeting never included long-term savings. It wasn’t really all that systematic either; I’ve made back of the envelope budgets for my entire adult life, but they only ever projected, at most, a few months out, and I only made them when I had credit card debt to pay off (frequently.) Otherwise I just spent what came in. I knew that I ought to think about retirement savings of course, but that seemed dumb when I had student loans, and until just a few months ago, I’ve always had student loans (although the undergraduate ones were in deferment for quite a while before my parents paid the remainder off with an inheritance they’d received. But by that time I’d racked up some graduate school debt.) I went through periods where I was spending less than I earned, but they were always followed by periods when I ran through everything I’d saved and then some. If I could do it all over again, I’d have figured out IRAs early on and put something, anything, even 5% or 10% of my income, into one.

2) I took out the damn graduate loans. I didn’t really need them; if I was going to go to grad school in the first place, I should have been willing to commit to getting out debt-free, even if that meant living situations I didn’t find thrilling. I think the problem here was that I was valuing immediate gratification and not really thinking about how much clearing a $19,000 debt would impact my first year(s) out of school. I got really lucky in that my first job, even though it only lasted a year, was unusually well-paid. That job saved my a$$, financially, and it was pure dumb luck that I ended up with that and not with any of the much less well paid jobs I’d already been rejected from by the time I got it.

3) Speaking of which, I literally did not research salaries in my field until I was halfway through my graduate program. WTF. This mistake is part of a more general mindset I had through my twenties, namely, “do what you love and as long as you accept that you won’t get rich, don’t worry about the money.” Well, not getting rich is one thing; not being able to afford a basic middle-class lifestyle is another. If I were doing it all over again, I would have invested in some really serious career counseling that would have included budgeting — “ok, teachers make X a month, how do you live on that? accountants make Y, what about that?” — as well as an assessment of my skills and interests. I do, in fact, really like what I do, and I think it is even useful to the world. But maybe I could have chosen a field that would have been something I liked, something useful, *and* not expected me to move halfway across the country at a moment’s notice for a salary that’s less than what most of my students make right after graduation.

4) I didn’t get married to a financially successful person 🙂

Cash is King

For the past several months, I’ve taken out my allotted grocery money in cash at the beginning of the month. It’s a tactic I’ve been trying in support of my quest to spend less money on food, even though I looooooove food.

And I’m ready to call it: it’s working.

Not that I’ve been perfect or anything, but I would say I’m showing noticeably more attention to the prices of what I’m buying, and I’m more likely to either decide not to buy something, or to choose something that’s cheaper (like, given the choice between two kinds of fruit or two kinds of granola.) I am definitely saving money this way, although it’s hard to say how much.

I keep reading that “studies say” that people who use credit cards just tend to spend more, and right now, I believe it. With food, it’s so easy to just grab whatever and stick it in the cart; if you’re limited, like I’ve been limiting myself, you have to be creative about fitting in exactly what you need, and there isn’t a spare $7 left over for sushi or whatever.

So, cash it is, for the time being. The credit card rewards aren’t worth it — I’d get all of $2.50 cash back a month on my grocery money, and I’m absolutely sure I’d spend that and more if I were still using my card at the grocery store. (I still use it for basically everything else, though.)

Making Do and Mending

I was so annoyed this March when I realized that my almost new ankle boots were busted; the zipper had separated from the leather of the boot. Although the boots themselves are pretty well-made, the zippers have been a problem from the start; they’re stiff, and especially once I put my own insoles in, the boots were a little tight, and I was doing a lot of tugging and jerking to get them closed. So I guess it’s not too surprising. But I looked more closely at the gap and realized that nothing was actually broken; the zipper still worked, and the leather didn’t have worn spots. 
Busted!  
When I was in college I learned that not everyone took their busted-but-not-broken shoes to the cobbler; in much of the U.S. there just isn’t a cobbler, so people buy cheap shoes and then toss them. But in the cities I’ve always lived in, there’s always been an old Eastern European or Italian or Greek guy nearby with a little stuffy shop full of shoes in paper bags waiting to be picked up. Once we were old enough that we wore shoes down rather than just outgrowing them, we joined our parents in semi-annual trips to have shoes re-soled (I always wear out the edges of the heels), weatherized, re-stitched…. This time, though, I was in the middle of paying off my student debt and I didn’t want to spend money for the cobbler when I thought I could deal with it myself.
tools of the trade
I didn’t have the time to deal with it right then, though, and it was the end of winter; I was about ready to switch to sandals. So I just packed them up and moved them, but now, with fall coming on, it was time to get the job done.
Mending something like this needs one special tool: a leather needle. You can kind of see in the picture that, unlike a normal needle, which has a more or less round shaft, a leather needle is flat. They’re also razor-sharp. They work brilliantly; unless you’d used one, you wouldn’t believe how easily they slice through leather like it was butter.
I also used the other thing in that photo; it’s beeswax in a plastic container with a groove in it so you can drag your thread through the wax. It gives thread extra strength, and I’m also hoping for a little weather protection. I’d say that’s optional for something like this, but since I already had it, why not?
Anyway, the job itself took something like three minutes. I dunno if it’s exactly as good as new, but I definitely think it’ll hold up. I want at least another year out of these boots, hopefully two, so it had better!
All done.