Welcome back for another edition of Money Mistakes. This week it’s not all about one big mistake but how little ones can add up too. Remember, the important part is to learn from mistakes, be it your own or someone else’s.
Tell us a little about yourself
My name is Forrest McCall. I’m a millennial and founder of the personal finance website Don’t Work Another Day. My passion for investing and personal finance started a few years after completing college and entering the corporate workforce. I realized that working a typical 9-to-5 job wasn’t what I wanted in life and I needed to shift my focus. I started Don’t Work Another Day with the goal of quitting my corporate job and living life on my own terms. I have made plenty of financial mistakes in my lifetime and have learned something from everyone.
What was your money mistake and when did you make it?
While I don’t necessarily have one large money mistake, I have made plenty of smaller ones throughout the years. Purchasing a new car, a Tempur-Pedic mattress, a home that was slightly over my budget at the time, and numerous small purchases that added up. I made these mistakes a few years out of college before learning about personal finances.
What led you to making the mistake?
I believe these mistakes were made in pure ignorance. At the time, my personal finance knowledge was lacking, making me think that I could afford all of these items when in realty, I should have focused on investing more. Making a decent income in a low cost of living area, I thought I was doing fine.
How did you recover from it?
My recovery started after growing my finance knowledge. I shifted my mindset to avoid spending on things that don’t produce income and instead contributing more to my investing portfolio. I chipped away and started building my investment portfolio over a few years after learning about personal finance.
What would you have done differently?
Instead of spending money on these items, I would have focused this money on investing. Knowing how important time is when it comes to investing, this money could have made me a nice income in compound interest.
How can others avoid the same money mistake?
I think learning about personal finances as early as possible is a great way to prevent money mistakes before they happen. I also think having people around you to help you make wise financial decisions can be extremely beneficial.
Most importantly, what did you learn from your money mistake?
I learned the importance of budgeting and personal finances. At the time I was less focused on the future and more focused on the now. Now, I have been able to focus more on the future and building the life I want.
Anything else you want to say?
One thing that I’ve realized is that as I’ve grown my income, it becomes easier to justify purchases just because I have the income to support it – even though these purchases aren’t wise. I think it’s important to still understand budgeting and discipline when spending money no matter your income level.