Money Matters
hoffse
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
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Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Best financial decision you have made? Worst?
Just curious!
My best - bailing on a house right before we put in an offer this summer. We came so close and ended up cancelling the night before we were to put in an offer with the realtor. The reason it was a good choice: I just didn't feel like we were going to have enough leftover in our savings. We had never needed to touch it, but I just had this feeling... Lo and behold, the following week my car suddenly needed a major repair and then a couple weeks later we found out that H's law school was going to delay student loan disbursement - so we had to pay for things out of our savings during the first month that student loans typically cover. Eventually his loans came through, but not until we had spent a lot of our own savings on tuition, books, etc! If we had sunk most of our savings into that down payment, we would have been SOL and probably would have needed to borrow from our retirement just to have the cash on hand - several of the more expensive things for H required checks and couldn't be charged.
My worst - having a wedding. When H and I got engaged, my parents generously offered to either pay for a wedding/ceremony within a certain budget or else write us a check in lieu of a wedding for its value. My dad was even willing to throw in a "pain and suffering" bonus if we took the check because that meant he wouldn't have to listen to wedding plans for a year and a half. Of course I had a romantic bride moment and decided to have the wedding. Since it was my parents offering, H told me to do whatever I felt was best. The wedding was lovely, and H and I really enjoyed it, but in retrospect that $$ would have been a lot better served in our bank account!
Re: Best financial decision you have made? Worst?
Worst: I haven't really had time to make bad MM choices. I'm only 22 and fortunately have been smart all along. The worst choice I did make was opening a Macy's card. It got me my wedding jewelry for 225 dollars instead of almost 800 but now it is much more tempting to shop.
Love: March 2010 Marriage: July 2013 Debt Free: October 2014 TTC: May 2015
Worst: it pains me to admit this, but based solely on finances, getting a graduate degree in a low paying field that I ended up hating. And actually, I think financially it has evened out, while I ran as quickly as I could from that field when I finally got my head on straight, I do believe just having A masters degree has lead to opportunities, even if not in that field. However it is no fun that we have been delaying TTC until our student loans are paid off, which they would be without that degree.
Best: this is probably lame, and not exciting, but really it's just our day to day spending habits and the refusal to keep up with the Joneses (aka all of our friends). We make very different financial choices than our peers, and they have wondered out loud why we don't buy/do x, y, z, but we are in such better finanical shape than they are, and it's because of the daily habits adding up to big money.
But a better answer, probably buying our house, it needed LOTS of cosmetic work (which we did ourselves), but if we sold it today we'd be able to sell it for way more than we bought it for (though I wouldn't sell any time soon, I love our house). And then refinancing this spring to a 15 year mortgage is saving us a ton of money in the long run.
Worst: Buying a brand new car right out of college, when my perfectly fine (3 year old) car only had $4k left to pay on it (and only 50k miles on it). I still wish I would've just paid off that $4k, and kept the car for a while and had no payment.
Best: Buying our house. It wasn't the best time that we had purchased it (H got laid off 6 months later), but we bought a foreclosure for an amazing price that needed a lot of work. We bought it for $49k, have put about $15-20k into it, and it is now worth $95k. Our mortgage is also only $315/month. So we feel that our house is very affordable, no matter what happens in our lives.
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Worst financial decision: probably buying my first Coach purse, because it definitely wasn't the last and won't be the last. In my defense I buy at the outlet store, but still I know in the back of my mind every time I buy one using my pocket money that the money would probably be better used for something else. I've decided I'm not buying another one until kid(s?) are out of diapers because I won't be using a purse and diaper bag, just a diaper bag so maybe that will help me kick the habit. I know that's really lame, but I have always been pretty fiscally conservative (learned from my parents) and so I don't feel like I"ve made any horrible financial decisions.
Worst: Spending so much on vacations! When I was single I spent way too much on vacations, and DH and I still are doing that until we have kids. It's our choice though, however bad it may be, because we want to travel and see places before kids. But we'd have a lot more in savings if we didn't.
Best: Buying a smaller house. As much as I would love a bigger house and yard, we don't need it. Our mortgage payment is less than what our friends pay for their rent.
Worst: Having a big wedding.
I'm not really sure of the best. We could do better with our daily spending, but we did pay cash for our last 2 cars. It is so nice not having a car payment.
I just thought of a big boo-boo for us/DH. Cliff notes--we learned not to mix family and money.
Here's the story if you're interested. When we were engaged DH and his dad went in to buy a house together. The initial idea was that we would live in the house for a couple of years and then it would become their retirement home. DH signed onto the mortgage so that way they'd get the first time homebuyers credit the government was offering a few years ago. Then DH gets a job across the country so we have to move after 2 years.
In-laws and DH decide to let older brother move in with his GF and their kid (plus their soon to be born twins). We all knew they had a track record of not being smart with money (they'll easily spend a whole paycheck at the bar or on some shiny new toy and then not have enough for food/rent) but they were being kicked out of their apartment and would be homeless so it was definitely an emotional decision (couldn't leave the kids out on the street, right?). Anyways, the agreement is that they'll pay $800/month plus any utilities (minus trash- and HOA fees-FIL payed for that. That's what DH and I payed). Even though that's less than half of what rent would be in an apartment they aren't able to make that with hospital bills and GF being on bed rest. So In-laws lower rent (it eventually gets down to $400) and DH and FIL agree to make up the difference. Eventually that becomes too much for them and on a good month we're all lucky to get $100 every couple of weeks, which leads to DH and FIL paying more and more to cover the mortgage. At this point the house is totally trashed too and are getting HOA non-compliance letters every month. We all understand that having 3 kids isnt cheap or easy especially when you're barely making $12/hr but still.
We were in another state and it got to the point that FIL told older brother that he either starts paying up or they have to move out within 2 months. Older brother and GF get upset threaten to move to Vegas. GF moves out there with kids and older brother stays behind trying to get his job relocated. 2 weeks later GF calls and says "Come pick up the kids, I can't do this anymore", so Older brother drives out there, picks up the kids and comes back....and moves in with his parents because they have rented the house out to someone else (DH's slightly more responsible younger brother who was more than happy to move out of his parents house).
We finally agreed to get DH's name off of the deed so we don't have to deal with it anymore. Youngest brother has been better about paying for everything and the new deal is if he can maintain the house and full payments for another year, in-laws will sell it to him and he can pick up the full mortgage. I hope it all works out, but it's been a mess.
We would be willing to go in on an investment property again with DH's parent's because we trust them and they're good with money, but it would be on the condition that family would not be renting it--it would be purely business.
I agree with Orangehills on hers! But without stealing her answers, ours are:
Best- Taking charge on our money overall (increasing 401K contributions,budgeting, paying extra on mortgage)
Worst- H buying a new car a few years ago even though he owed big in car payments from previous cars. We weren't very MM at the time so the car loan is 6 years (up Jan 2017) and $490/month payments. We are trying to rake up extra money to make payments, but we are saving for other things right now so it's been hard.
Mom987- you can always pay off your loan early by making extra principal payments each month. That is what we did with our house.
WORST: Buying a rug from rugsdirect.com before researching the type and quality of rug it was. That was a $600 mistake. Not life altering but made me feel really stupid. Also, doing a huge Mary Kay product order when I started my business back in 2005 without understanding fully how much work it takes to sell that stuff. It was a $2,400 purchase. I ended up donating a ton of the unopened product to a women's shelter. My now DH paid off the debt when we were engaged.
Mom987- you can always pay off your loan early by making extra principal payments each month. That is what we did with our house.
We are definitely working on it and it's our goal, since thank goodness we have no other debt. The worst part is each month the principal/interest starts over, so it is harder to hit down that principal sooner when the 1st of the month comes and we get paid on the 4th (like this month, for example)! Thank you!! I know the more we throw at it, the faster that'll be. Just thankful that's ALL we have left.
Best decision: Catching MW, she is a saver and bought a house that is roughly 15% of our income. It is old and we need to put a lot of money into it over the next few years, but it is very affordable. We also just refi to a 15 year mortgage which means the house will be paid off prior to our LO being in college.
It's hard to say what our best decision has been. I would probably say that even when we're on a payment plan or something, we always pay more than is asked. Student loans, car payment, credit card, etc. We always pay more than is required. We also haven't gone on a honeymoon yet because we're saving until we can do it without incurring debt or putting it on our credit card. We also bought a car (used, but practically new and from a dealer so not the cheapest option), but it is in great shape and will last us for at least another 10+years.
Our worst decision has probably been choosing more expensive apartments. We could easily live in a cheaper apartment, but we chose location (I can walk to work which saves gas $) and style over price. We're not suffering, but we could have easily chosen a cheaper place and saved a little bit more.
Best: Buying a condo at 22 and being able to sell it 3 years later for $15,000 more than I paid to cover the down payment on our house. Paying off DH's SL ($37,000) in 46 months. Paying off my car ($15,000) in 25 months, DH's car ($17,000) in 29 months. Always savings $ each month- even if it was just $20 back in high school. All of this helped us have our family when we wanted to instead of having to wait.
Worst: Paying $9,000 for a new front porch on the house. The guy didn't do a great job and we already had to do some repairs to it ourselves. We've learned from that mistake!
Worst would be getting into credit card debt, even though it's smaller than some I'm not proud of the $2200 credit card debt I have. I'm hoping after my tax refund I'll have enough to pay it off and put some in savings for an emergency fund. I'd also say not paying off my car and student loans before purchasing a house, but it's too late for that now, so once my credit cards are paid off I'll be snowballing the car and then student loans. My estimate is only 15 months left on my car.
Worst: Buying our condo. Although it was affordable and well within our means it is worthless because of the market and now we are fighting to sell it somehow so we can have enough space for our family to function.
Our current best financial decision (aside from prioritizing retirement savings) is probably being a 1-car family. It definitely means making some sacrifices and doing a lot of coordinating with DH and the kids, but it saves us a lot of money.
Worst: Overall my worst has probably been going into a field that is not particularly lucrative. I'm okay with that since there are non-financial benefits that mean a lot to me, but from a purely financial perspective I left a lot of earning potential behind.
The other bad one was trusting a financial advisor with an insurance settlement I got. I made it very clear that I wanted a fairly risk averse investment since I might need to use the money for further treatment if anything bad happened to my health (I was young and didn't have much savings or experience with investing). He reassured me that he was investing in funds that he had his own money in and trusted implicitly. Needless to say, the fund was very aggressive and lost over half of its value. I should have educated myself more about mutual funds instead of trusting him to do what was in my best interest.
Best: Taking a substantial pay cut to quit my previous long-term job because there was no way I could ever get promoted, and getting my new job that has the potential to become a very successful long-term career. This was the best decision because it was so hard to do; I really wasn't sure if I could manage such a huge cut in pay, but I needed the opportunity to grow. It has been the best decision I ever made, money-wise and job-wise. Three years later, I am making more than I made at my previous job and there are huge opportunities for me to keep advancing.
Worst: Two things that are tied together. First, buying a new car that I didn't really need and in the end wasn't happy with. It doubled my car payment and I was stuck with that car for years. Even worse was that when we refinanced our house, we borrowed extra to pay off this miserable car, so it extended our mortgage payment. I still shake my head at how dumb that was. Can't take it back, but can definitely learn from it!