Over the course of our lives we make a lot of financial decisions. Most of them for the better hopefully and some others for the worst. Looking back at my financial decisions I’ve made, especially the ones within the last ten or so years, I can definitely attest to making some really poor decisions and some good ones as well. Overall I am happy with the decisions I’ve made, yet wish at times that I did not make some of those negative financial decisions. I suppose one can say, that’s part of life and the learning curve it comes with.
I can certainly say that I do not regret any negative decisions I’ve made. In fact I’m glad some of them did happen, because they taught me the value of the dollar. Even looking back a year or so ago and now, I’m in a pretty good place, primarily due to making the necessary changes in my life financially and learning to live within my means.
Looking back at the choices, some of my worst financial decisions have been:
1. Not Marrying a Millionaire
Should have, could have, would have are all just excuses. Fortunately enough though I am still young enough and in full hunt for Mrs. Millionaire. Seriously though, I am happy with my life through and through. At the end of the day it’s just money, it comes and goes, here today and gone tomorrow.
2. Financing a car at 29% interest rate
That’s right I purchased my second car, 1999 Saab 93 for $6,500 and financed it at a horrid rate of 29%. It all happened quickly though. My other car broke down, needed a car for work and asked my dad to borrow the money. After a tough argument with my father, I got fed up and decided to go on my own for financing. I walked in to CITI Financial, they gladly cut a check for me for the amount of $6,500 two hours later. I think I did it out of spite more than anything. I knew it was a bad rate, but my bank wouldn’t give me one and I needed a car. I wanted to show my father I could do without him.
To make a long story short I made my payments regularly for a few months. Finally my mother discovered my interest rate, nearly had a nervous break down (well not really) and gave lent me $6,000 to pay CITI off. I did as suggested and paid the loan back to her in 2 years at a much more impressive rate of 4.5%. I sure lived and learned and let me be a lesson to all of you to never make a financial decision out of spite. NEVER! :)
3. Getting into Credit Card Debt 1st Time
Yeah I got into credit card debt about 8 years ago. I was young and dumb essentially. I maxed my credit card out because I did not budget at all. I was living pay check to pay check. Long and behold I was $3,000 in credit card debt and a maxed out credit card. Eventually I got it paid off within three years.
4. Getting into Credit Card Debt # 2
Much like with my first credit card scenario I was irresponsible. This time around I simply could not pay back what I purchased. Made some fairly big purchases and the credit card debt snowballed into $3,500 worth of debt. I made my regular monthly payments, chipped away at it slowly, but I still was in debt. Then Finance Fox was born and ever since I’ve been snowballing monthly payments and eliminating the credit card debt.
5. Not paying my self first early on
I never bothered to pay my self first. Hang on! I did actually, but did it in the wrong way. I would pay all the bills and creditors and save some leftovers, which was nearly not enough. I had a few thousand dollars kicking around, but I felt it was never enough.
My Best Financial Decisions:
1. Borrowing $5K in RRSPs in 2007
I knew I needed to start saving and more importantly saving for the future. I borrowed $5K in RRSPs from my local bank in 2007 just prior to tax season. Just 6 months into my new and fairly secure job, I felt confident enough I could pay it back. Eventually I paid it back within two years. It was forced savings, but I’m glad I went through the experience.
2. Buying my First Home
From the money saved and the Canadian government introducing the “Home Buyers Plan” I decided to withdraw my saved RRSP money and used it as a down payment in my first home. I’m glad I did buy at the time I did. Housing market was on a down and still feeling the effects of a recession.
3. Paying for post-secondary Education in Cash
I paid my three years of college in Cash. Essentially it was a split between cash and grants. I got the opportunity to work full-time during the summer in my mother’s factory. All the money I earned would go towards school tuition.
I’m a huge supporter of eduction, even if it means borrowing to fund your eduction, the rewards are immense. So, whatever kind of degree you’re looking to get into, be it a science degree or finance degree, do what’s right and get your eduction first and worry about the financing later.
4. Getting my First Car & Learning Responsibility
I was fortunate enough, with the help of my parents to be able to purchase my first car at the ripe age of 16. There was a catch though. I would have to pay my own insurance. And indeed I did. It was tough being young and paying $225/month in insurance, while working a part-time job. That being said, it taught me on important lesson: Responsibility.
5. Finally Learning to Pay my Self First
I finally learned this art as I call it. I truly got serious about eliminating debt and saving money for the future, such as retirement and investing. I wish I learned this earlier on in life, but I suppose it’s better late than never. Today, I save roughly 7 % of my pay-check automatically. I setup an account with ING Direct and they do two monthly (bi-weekly)withdrawls which go directly into this savings only account.
6. On the verge of Eliminating Credit Card Debt AGAIN
That’s right! I am on the verge of eliminating my credit card debt, the whole $3,500. I started this journey less than a year ago, at the same time I started Finance Fox. Am I proud of my self? You better believe it. I’ll keep you guys posted on it, as I will write about it soon.