Suburban Genie: My Three Financial Do-Overs

genie All of the credit for this post should go to Adam over at Your Money Relationship for coming up with this Money Genie post idea.

Basically the idea boils down to what three things about your financial past would you change given the chance.  While I certainly wish there were a Robin Williams esque Genie to grant me three wishes I feel like the choices we make in life improve our future by teaching us important life lessons. With that thought to the side here are the three major mistakes I think I made from a financial aspect.

1.) Buying a Brand Spanking New Car (3 times)

When I was just a young lad, I was painfully forced by my father to pay cold hard cash for my first car. By the way I was the only child I am aware of in my family who was required to front every penny of their first car. I bought my pride and joy for around $1,000 and it was worth every bit of half of that.  It was my car though and I owned it outright.  Looking back it was one of the best things my parents did for me even if it only lasted 1 year.

At the end of it’s first year of life it was acting up so I took it in to the shop to discover it need around $2,000 worth of work to keep it safely running. Not being a total idiot I saw that sinking more money into this car was really just a waste of time and money so I set out to find something new. I wanted a pickup truck so I started looking around, problem was I didn’t have any cash and I had a credit history equivalent to a chimpanzee. I was able to get a fleece (lease for non Dave Ramsey types) on a brand new Ford Ranger. This was the best thing ever, to a 18 year old, so I rolled with it. I knew I wasn’t going to exceed the miles and I couldn’t get approved for loan because I didn’t have credit. Determined not to rely on anyone I refused to ask for consignors so my only option was the lease, and I took it.

Fast forward and my lease is up, I stayed within the mileage which to me was a win. I had two options at that point and they were 1.) buy my leased car at 14% interest, because I still had no credit, or 2.) buy a new truck at 0% interest because, wait I don’t know why the F&*($ they gave me that. Anyway, so I bought a new truck at 0% interest for 5 years, yay me I now own my second truck, still no real backseat but at least I was starting to build credit.

Enter wife and pregnancy! Well it turns out that driving around with a baby in the front seat is now taboo, even though I used to ride in the bed of a pickup with no car seat or safety belt. This meant there was no question but time for me to buy a new vehicle. Given my exceptional track record I went for yet another new car, $21,000 worth of new car. In hindsight this single purchase was my greatest mistake I could have bought a used car and gotten the same rate, I didn’t get 0% and my credit was like gold. Either way I did it. The damn thing is paid for now and I am going to drive it into the ground. So mistake 1 was buying a NEW car. NEVER EVER EVER do it.

2.) Buying My House with 100% Financing at the Peak of the Boom

Prior to me and my wife getting married, we decided we needed to buy a house. We sat down and figured out what we could afford and started shopping around. We decided on a great three bedroom 1300 sq ft home and I bought it. Yes I bought it, it was in my name and using my credit, she wasn’t even involved. We weren’t married yet so it made great sense. This house was less than 90k and cost us a ridiculously low $700 a month in mortgage payments. It was perfect, or was it? We decided we wanted X sq ft, in X area, with X X and X so we started shopping around. We had no intention of actually buying a house, I mean hell our mortgage was less than rent at our last apartment. Unfortunately the second house we looked at had every single option we wanted, every room, every detail, even the right yard.

Because the market was so hot we couldn’t afford to sit on it and we made an offer on the spot for the exact asking price, plus closing.  This was all well and good but we hadn’t even put our current home up for sale. Luckily it worked out and our old home sold within 6 hours of being listed, yeah now that was easy money for the realtor. We chose to put nothing down on the house and take out an 80/20 mortgage, meaning 80% of the value in a traditional mortgage and 20% in a Home Equity Line. Money was pretty much being given out to monkey’s so it wasn’t hard to get this type of deal. Our mortgage payment subsequently increased from 700 to 1400 and put us both on the line for quite a bit of cash. Since we chose to finance the whole thing I couldn’t even sell the house now, with realtor fees, for what I owe. Go figure! Give me a mulligan Genie!!!!

3.) Taking an Interest in Personal Finance Early in Life

My final do over won’t take quite so many words, I just recently really started taking an interest in my financial well being. I was always complacent to allow others to influence and control my future. Luckily I married the best woman in the world and she had us on a course to freedom from debt, even if we never really were/are on the same page. If I had made the decisions in life to be at the helm of my ship at all times I would have never made it so difficult for me today. I owe everything to my wife for getting me started and everything else to this community of bloggers for keeping me going.

Never be complacent to just paying your bills and staying out of trouble. That is where I was, today I am investing 13% in my 401k, contributing to savings, and have only my student loan left as uncollateralized debt. In the very near future I plan to have the student loan paid off and then I will focus on taking my 20% HELOC down to 0%, on that day I will throw a keg party, when I pay off my mortgage I will throw a week long keg party, so stay tuned to this site if you want an invite. 😉 of course it may be 10 years from now.

If I could rub a lamp and have a funny blue man pop out, I would want him to look back and change these few things I did wrong. This isnt’ to say I regret my decisions because everyone of them has slowly forced me to be who I am today. If I had always been provided for I would never appreciate life and happiness the way I do now, I want everyone to remember that as they raise their children in this world. Just because you can afford to, doesn’t mean you should and in most cases you probably Shouldn’t.

Please check back at Your Money Relationship for any additional posts on this topic. I had a ton of fun writing this post and I hope you enjoyed reading it, let me know what your three wishes would be, and why.

Photo: (Hyku)

{ 4 comments… read them below or add one }

1 Donnie May 27, 2009 at 3:14 pm

Good idea.

1. I would have said “No” to my wife about spending $10k on our wedding. $100 would have suited me just fine, rather than having $8k on credit cards.

2. I wouldn’t have bought a Tempur-pedic for $3k. A $200 store brand would have been fine.

3. Although I loved and got a lot out of my first two years of college, it was extremely expensive for math, social studies, and chemistry courses. I probably would have went to a community college for the first two years, or maybe even taken CC courses in the summer between HS and college and Freshman and Sophomore years to cut my tuition from $200/hour to $60/hour on those Gen Ed courses.

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2 PennySeeds May 29, 2009 at 7:33 am

Buying a new car is one of my regrets too actually. I had the money to buy it outright, and was afraid of purchasing used since I didn’t know much about fixing vehicles. Still it pains me to know that just driving it off the lot slashes the value intolerably..

I will probably purchase my next car used as long as it’s in very good shape.

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3 Matt @ My Financial Recovery May 29, 2009 at 9:20 am

All I can say is OUCH for number 1! I can relate as my first car was worth all of half of what I paid as well!!

Since then I have had 2 other used cars both having payments. My current car should be paid off in August and I am really looking forward to it. I was pressured a bit into getting it but my ex-girlfriend lent me the money at 5% interest so it could be worse.

Thanks for sharing!

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4 SimplyForties May 31, 2009 at 4:25 pm

Great article! My biggest financial mistake was not getting my financial house in order sooner! I may be paying for that mistake forever!

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