I haven't had perfect timing or the best of luck when it comes to many of my key financial decisions. I purchased stocks during bull markets when stocks were already overbought. We bought a house during the housing bubble. Despite my missteps, I have been able to turn around many of my financial mistakes. When I look back on my life when I'm retired 30 years from now, I am hoping I will have few financial regrets.
Buying a home at the wrong time
We purchased our home in 2005 when housing prices were at an all-time high. Our $183,000 house is only worth $130,000. Instead of lamenting that we should have rented instead of buying, I figured out how to turn our situation into a positive one. We refinanced our mortgage to 2.75 percent. By taking advantage of the low interest rates, we made up for our higher purchase price. In fact, the total amount of money we will spend on purchasing our single-family home is less than what I would have paid if I had stayed in my $104,000 townhome with a higher interest rate.
Investing money in dead-end fund
I spent an entire decade investing money into a 401(k) that offered me a limited number of investment choices. Even though I barely saw a return on my money, my employer-sponsored retirement vehicle motivated me to save. I was recently able to rollover my money into an IRA account, which offers me greater flexibility. If it weren't for the 401(k), I probably would not have been disciplined enough to save the money that I now control in an IRA.
Marrying a spender
Even though my husband was a spender when I first married him, he was willing to stick to a budget. He also agreed to pay off our credit card bills in full every month. After experiencing the freedom of being debt free and the thrill of paying cash for major purchases, my husband turned into a big-time saver. He still spends money on his hobbies and travels, but doesn't go into debt like he did before we married. Because we both save money for retirement, we have built up a stronger nest egg for the future.
Getting into credit card debt
I never thought of getting into credit card debt as a decision as much as something that just happened to me. I recovered from my poor financial decision by recognizing that I had control over the situation. I am actually glad I had credit card debt because it taught me how to budget and how to live below my means. Having credit card debt motivated me to work harder at my career. After I got out of debt, I had the extra money to save and invest.
Everyone makes poor financial decisions at one time or another. I am not as intimidated by my personal finances anymore because I know it's possible to recover from bad financial decisions.
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