The Worst Financial Mistakes You Can Make

YourMoneyToday ^ | February 20, 2023 | YourMoneyToday

[aquila48]

Making Financial Mistakes is a natural part of life. Everyone does it, from young children to experienced adults. There’s no need to feel ashamed or embarrassed when you make a mistake. Instead, view it as an opportunity to learn and grow. After all, making mistakes is how you become better at everything you do.

-Not Saving For Retirement

-Borrowing Money From Your 401k

-Spending More Than You Earn

-Not Having Enough Insurance

-Investing In Risky Stocks Or Schemes

-Not Having An Emergency Fund

-Taking Out Loans You Can’t Afford To Repay

-Marrying The Wrong Person

-Avoid These Financial Mistakes At All Costs!

[vmpolesov]

“Marrying The Wrong Person”

yep

[KevinB]

Spending money on depreciating assets, e.g., cars, tats, big screens, fancy phones is a bad decision.

Spending money on depreciating assets, e.g., cars, tats tits, big screens, fancy phones is a bad decision.

I couldn't resist this corollary to the marrying the wrong woman point. :-)

[plain talk]

Thats incredible. Thats a woman with drive and heart. Wow.

[cpdiii]

Borrowing Money From Your 401k is foolish.

Not really if done properly. I borrowed from my Thrift Fund which is really a government 401k for employees. The interest I paid went directly into my my account. I was borrowing from myself. I bought a house with this. The loan from my 401 K paid for the land and the rest was by conventional loans. The bank was quite happy to lend me what I needed at a low rate as the land secured the loan. The bank could not lose if I defaulted. That borrowing from my 401K plus the bank loan was 150K. I paid it all off early and said same is now worth about 600k. Wise borrowing from a 401k is good. Unwise borrowing from a 401k for just expenses is financial disaster when you retire.

[ladyjane]

Good edit!

[cherry]

while working I did borrow from the 401k...made sense since you pay yourself back a little bit more...better then sky high credit cards etc..

I have taken out of my retirement now that I am actually retired..paid off remaining credit cards, no car loans, no mortgage...much easier to figure out your finances when you don't have alot of debt.

I play slots too much but even in that I've trimmed back a whole bunch and hubby hardly ever goes...

I doubt we have enough life insurance but we have a little til age 80....

[cherry]

oh, and married this yr..50 yrs....some yrs seemed longer then others lol....

it also is good to come from a family with strong values and ethics, not necessarily rich, but hard working.

[Political Junkie Too]

In my case, after college instead of investing the maximum amount in my 401(k), I did what many people say not to do and only invested the minimum amount that qualified me for the company match. The rest of the money (that I could afford to save, but much less than the maximum that could by law have gone into a 401(k)) went into a savings account for a 20% down payment on a home (to avoid PMI).

It took me 14 years before I had enough for a down payment to buy a condo in California. I stayed in that home for 19 years. When I sold it, I got 2.6 times my purchase price, making that saved down payment earn a pretty decent return.

When I sold my condo, I moved to Texas and bought a house that was more than twice the size of my condo. That house has now appreciated by 50%, making the initial savings return even more!

I might have had to borrow from my 401(k), but I chose to go the savings route and wait a little bit longer to purchase my first home.

-PJ

[Fireone]

It’s only an exception, if you lack the temperament, knowledge, skill, & luck to try something. I guess it might be an exception to those who sit on the sidelines. I run with those who like to control their future, not wait for someone else.

[alexander_busek]

My house gets invaded by Hanai nephew and nieces daily

99.8% of all FReepers might not recognize the meaning of the word hānai right off the bat.

Regards,

[rellic]

Unless you lived in Hawaii for 25 years or so
most everyone even knowing the definition
of that word, would not appreciate the culture of it.

[minnesota_bound]

I did well and retired in nov 2021 then the economy went south thanks to congress spending over $2 trillion more in 2021 which caused the massive inflation. Now we have proof on how corrupt the gov’t is with our money.
Many people do well then they find out the 401k money is not worth as much because of the corrupt gov’t.

My stock went down and after 3 years the stock did recover but is down again.
My retirement plan was for it to be at $100. It was $154 when I did retire and it is now at $111+

I am on hold on doing some of the things I want so back to writing the great American novel and selling it for a bundle : )

[fatboy]

“...They forgot the most important financial mistake of all to avoid, being born into a poor family.....”
_________________________

I have 3 sisters and two brothers and we were born into a lower middle-class family. Not in poverty but close. Today, all 3 of my sisters, myself and one of my brothers have a 7-figure net worth. 5 out of 6 is not too bad, no?

[A_perfect_lady]

I am good defensive driver, never had an accident in 64 years of driving in places like Chicago... I made the right decision to buy only required minimum liability insurance.

I've been thinking about this. I paid off my car early (it's a 2020) but kept the full coverage. But it's going up, dramatically, even as the value of my car goes down. I resent this a lot. I'm thinking of dropping my coverage to basic liability. My only fear is hitting a deer. I live in a rural area and the damn things leap out in front of cars like they're on suicide runs. I haven't decided yet.

[Bobbyvotes]

Nothing is 100% sure in life except death and taxes.
A deer hitting your car is less than 0.01% probability.
Do you really want to keep paying collision coverage for such low probability? Your insurance company will be very happy to take your money.

With the money you will save on insurance, you can fix damage to car, if it ever happens.

[packrat35]

Getting married without a prenup if you have any money is by far, the worst thing you can do.

Hell, getting married at all, can be a lifetime drain on your resources, if she divorces you and you have kids...

[HonkyTonkMan]

I recall reading some plans require full repayment if the borrower changes jobs. At that point, they would probably just take out the remaining loan balance from the account.

[HonkyTonkMan]

well done, Cherry! Carrying a debt load into retirement is not a good thing.

I hope you win big at the slots :)

[EBH]

Absolutely agree. And if per chance you do marry the wrong one, realize it early and get the annulment or divorce.

[cgbg]

My tip to young men—if you must get married get married to a woman who has a lot more money than you do.

It solves a lot of issues.

Lol.