I made my share of money mistakes when I was in my 20s. And, to be completely frank, I probably made many more mistakes in my 30s. Time will tell whether I'm digging my financial grave at 40.
As a parent of two college kids, I'm all about putting my cards, including my credit cards, on the table. I hope they can learn from my financial missteps. According to a recent article by Time Business & Money, half of all adult children are under the delusion that their parents made zero money mistakes. Fidelity Investments Intra-Family Generational Finance Study showed that the other half cited their parents' lack of retirement savings.
Swiping my credit cards
One of my biggest mistakes in my 20s was using my credit card to pay for things I wanted instead of waiting until I could afford the items. I knew I was in trouble when I started pulling out the credit card just to pay for day-to-day necessities such as food. I made enough money to survive without credit cards, but I still chose to use credit cards instead of waiting to make major purchases.
Buying during a bubble
Although I was smart to save up 20 percent for my down payment on my home, I made other bad financial moves in my 30s. I made the mistake of buying a home that was overpriced. I didn't listen to the rumors that we were in the middle of a housing bubble. If I had waited it out, I could have purchased my current home for $75,000 less money.
Saving too little, too late
I didn't save any money at all until I was close to 30. One year before I turned 30, a friend told me about the concept of saving 10 percent of any money I received in life. Over time, I could become wealthier by just sticking to the 10-percent savings rule. In my 30s, I stuck with the plan to save a portion of my income. I should have started saving in my 20s. According to some financial experts, I should have between $300,000 and $500,000 saved for retirement at age 40. I don't have even half of that amount saved.
Learning from our eldersWhen I look at the elders in my family as well as senior citizen friends, I can clearly see some of their financial missteps. It's easier to see what other people are doing right or wrong than what we are doing. As far as the Fidelity study, perhaps many adult children don't know the details about their parents' finances so they assume everything is rosier than it really is. Perhaps they don't know their parents still have a mortgage even though they are retired or have less than $50,000 in a retirement savings plan.
I think parents are doing their children a disservice by being secretive about money. I want my children to know about the good and bad decisions I've made with my money. People who are out in the open seem to have less financial stress from what I can tell.
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More from this contributor:
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