Stupid Stuff I Have Done With Money

I write a lot about what you should do with money, but I often neglect what NOT to do.  As Dave Ramsey would say I have a PhD in stupid, and I can prove it.  I can tell you all day about how to optimize you taxes and reach a high savings rate, but if you don’t understand my WHY, then taking action probably isn’t going to happen.  The stuff written bellow is my why.  I did a lot of stupid stuff with money, all during a time when I knew EVERYTHING, because men in their late teens and early 20s are of course the most knowledgeable creatures.  The STUPID below hurt like hell and I learned a lot from it.  Please don’t repeat this stupid.

Stupid Stuff I Have Done With Money: The Big Stuff:

Sold The First Shares I Purchased: My initial stock purchase was when I was 16 in 2002. I had $600 and my dad helped me set up a Roth IRA.  I bought 100 shares of Redhat which was trading at around $6 per share.  Today shares trade at around $120, so my $600 would be worth $12,000. That’s a 22% annualized return!

Withdrew Money From My IRA For A House Down Payment:  If that last one sounded painful, listen to this: I withdrew $3,000 from my Roth IRA in 2006 to go towards our down payment on our first home.  This represented all of the contributions I had made to the account, leaving my account with about $3,000 in gains.  The worst part? What I sold included around $1,000 of Hansen Natural stock, which changed its name to Monster, in favor if its popular energy drink.  Monster has been one of the top stocks of the decade, that $1,000 would be worth around $40,000 today (almost the total value of the house). Doh! Conversely, if instead of buying that house we had rented, and I added $2,000 to that investment I would have $120,000.  Also, by taking a withdrawal from my IRA I disqualified myself from the retirement savers tax credit for a couple years.

Buying An Investment Property When I Wasn’t Ready: Less than a month after my son was born I had this great idea that I was going to become a real estate investor. For the backdrop this was in the fall of 2008, you know when that whole recession/financial crisis was happening.  I bought a $6,000 house at the county tax auction (A house for $6,000, I can’t lose!).  Between the purchase price of the house, the tax bill that was due immediately (another $1,000+) and immediate repairs, I ran out of money…and had no emergency fund left, I was only working a part time job, and our new baby was sick.  I screwed up royally, and I guarantee you Mrs. C. will never let me forget it. This was by far the dumbest thing I have done with money.  Yes, you can lose when you buy a house for less money than a 10 year old car. I still wonder how the hell we got through that year.  Not only did we have this colossal mistake, we also had our lowest earning year, between both of us taking time off for the birth of our child and me having trouble finding enough work. We earned only $22,500 that year. No more investment properties until our home is paid off, we can pay cash, and have enough to make any repairs needed without touching our emergency fund.

Buying A New House When My Last One Hadn’t Sold: I thought for sure our house would sell quickly, which was incorrect.  The “perfect house” came on the market and I couldn’t wait.  It was 4 months after we bought our new house that we got an offer on our old house, which then drug out for 2 months before falling through.  Ultimately we never sold it.  Our cash position dropped to only a couple thousand dollars when we closed and the first year was really rough because we were carrying two house payments. Then our washer and dryer broke, followed by the water heater, then the fridge.  When you do stupid stuff you invite Murphy over.

Not Prioritizing Retirement Savings: Although I established an IRA at 16, I didn’t start putting substantial money into retirement savings until 10 years later.  Even a couple grand a year would have made a world of difference, I feel like I am still playing catch up to my lost decade of investing, which also included the 2008 – 2009 crash when everything was on sale.  If I could go back I would have found a second job, and/or de-prioritized home ownership in favor of investing.


Stupid Stuff I Have Done With Money: The Small Stuff:

This stuff didn’t hurt as bad, but that doesn’t mean there isn’t stupidity involved.  Some of it I still do, so clearly it doesn’t hurt enough lol.

I Bought A $600 Couch On A Credit Card:  To this day this is the most expensive piece of furniture we have ever purchased. It was a sectional on sale (doesn’t furniture always seem to be “on sale”?) This was around the time the feds gave every taxpayer a $300 rebate check to stimulate the economy.  I had asked for a cash discount, but they insisted that they couldn’t budge on price, but did offer 0% financing.  I took the deal and they instantly approved us for over $2,000 on a store credit card.  So right away they start hard selling us to buy some more stuff, thankfully we resisted.  I ended up paying off the couch before any interest was due, but taking on credit card debt for a freaking couch is not a good idea.  Also the credit card had some crazy terms, where if you didn’t pay it off in 12 months they charged retroactive interest of like 30%, Yikes.

Paying For Cable Bundles: Mrs. C. and I have been paying for cable for about 9 years now.  We have a bundle that includes cable, internet, and home phone.  Yes we still have a home phone and no, we are not over 80 years old.  Having a home phone is convenient and all our friends/family have the number memorized, which can be both a good or bad thing.  We have gotten quite a few calls from jails and hospitals from people who don’t know any other numbers. Our cell phone reception used to be non existent at our current house, but it has gotten better recently.   Not only do we pay for cable, we also pay the $10 a month to rent their router.  Across 9 years, that’s just over $1,000 we’ve paid to rent their router.  We currently pay around $170 per month for our total bill.  We probably could save about half that amount by getting rid of cable and the home phone and having just the internet.

Buying Pre-made PBJ Sandwiches: I cringe every time we go grocery shopping and throw these in the cart.  A pack of 10 sandwiches costs about $7, so the unit cost is 70 cents per sandwich, I’m not going to run the numbers, but I would guess it’s about 3 – 4 times more expensive than making individual sandwiches.  Across 4 kids that’s $14 per week, or $56 per month for PBJ sandwiches.  It makes my wife’s life easier to get them, so it’s worth it.  Bonus:  last week I went to a discount grocery store and bought 2 cases of 72 sandwiches for $18 each, that will help with this cost for the next couple months.

Funding A Diet Mountain Dew Addiction:  I drink 6 cans of dew a day.  That’s 2,190 cans per year.  A 24 pack averages $7, so that’s 29 cents a piece.  I therefor spend $635 per year on pop.  I guess it’s not too bad compared to some coffee drinkers, and no where near a pack a day cigarette habit, but still, not ideal.


Bonus: Ridiculously Frugal Habits I Can’t Shake:

Most of my financial habits came into place when Mrs. C. and I first got together and I was earning around 6 bucks an hour.  Every single dollar, hell, every single dime, was extremely important.  Now that our yearly income is about 4 times what it was back then some of the frugal habits we have learned can and should go away, its just hard to shake them.

1. Never buying checkout candy / Vending Machine pop: I don’t even look at the stuff and my kids NEVER ask for any of it.  On a very rare occasion I will hit up a vending machine while working if I planned improperly and don’t have the adequate amount of Mountain Dew with me, but these occasions are few and far between.  We’re saving damn near half our income, spending an occasional 75 cents on a candy bar isn’t going to derail our plans.

2. Driving a beater: My car is worth roughly $800, and that’s probably on a good day.  It does have new tires, brakes, rotors, and a full tank of gas, so that helps its value.  I don’t like owning depreciating assets, so having an inexpensive car makes sense to me. I could get a $3,000 car that would be a major upgrade and still have a very minimal amount of assets going the wrong way in value.  We bought this car 3 1/2 years ago to get me through at least one outage season.  I told Mrs C. last week that I was hoping to drive it until we pay off the house at the end of 2020…she was not amused.  Most likely I will need to upgrade within a year, we will see.

3. Conversation with Mrs. C. for any purchases above $50: We set this rule back in 2007 that we would discuss any purchases over $50,  with the increases we have had in our incomes perhaps its time to adjust this up.

4. Delaying replacing items as long as possible: Case in point, I own 4 pairs of pants.  Mrs. C. thinks this is too few.  I have 4 pairs of jeans that I wear to work.  My replacement threshold is typically when a knee rips through. And damn, there’s a hole in my sock right now.

5.  Analyzing utility bills: I’ve gotten way better at this and now I only look at these a few times a year instead of monthly.  Up until about 2 years ago I would go out and read our gas and electric meter and would project what our next bill would be, then become the “light nazi” for a few weeks; yes even with LED bulbs.

6. Comparison shopping: Before I buy something I might look it up online at a few different stores, which I think most people do, but I also will physically go to 2 or 3 stores as well to make sure I’m getting the best price. I do this a lot with building materials / home improvement items between Lowes and Home Depot.  More often then not between the gas, time, and hassle factor I’m sure I’d be money ahead by just buying the item at the first store.


The best way to learn about money is to look at other people’s mistakes and NOT repeat them.

So what stupid stuff, big or small have you done with money?

John C. started Action Economics in 2013 as a way to gain more knowledge on personal financial planning and to share that knowledge with others. Action Economics focuses on paying off the house, reducing taxes, and building wealth. John uses the free tool Personal Capital to track his net worth and posts quarterly updates on his finances. Check out the Action Economics archives section for all past posts.

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